Arbitrating Our Rights Away

America is easily one of the most litigious countries in the world. Anyone with a complaint, slight, gripe (perceived or real), injury (emotional or physical) – legitimate or not, can file a lawsuit against the party or parties who’ve wronged them. The goal of tort law is to protect the rights and properties of people in civil actions, to make someone ‘whole’ again after they’ve been injured, harmed or treated unfairly in a business contract or a civil action.

We’ve become a nation of frivolous lawsuits. The civil courts have become a place where the ‘aggrieved’ come to congregate. The courts are backlogged with a series of bogus lawsuits filed by people seeking to make a quick buck from a quick settlement and egged on by second rate lawyers who otherwise have no other source of employment.

People have sued for the most ridiculous reasons, the most notorious was the woman who sued McDonald’s because her coffee was too hot, she put cup in between her thighs, attempted to open the lid to add her cream and sugar, the coffee spilled while the vehicle was moving and in the process she suffered third degree burns. Or the obese teenagers who sued McDonald’s for making them fat (not their lack of self-control). It’s no longer just lung disease or lung cancer patients suing tobacco companies for failing to inform the public about the dangers of smoking. Or residents of a small town suing the town’s chemical processing plant for contaminating their water source and giving them all kinds of illnesses including cancer. Anyone can sue any person or business if they are injured in their place of business (even if it may not be the fault of the other party). People sue when they get their feelings hurt by insensitive comments made or they sue when they are having a bad day and some unfortunate person happens to be in their way on that unfortunate day. People sue for all kinds of stupid reasons.

As a result, companies put warning labels on everything. Don’t use a blowdryer while in a bathtub full of water, you might electrocute yourself. Don’t leave a toaster unattended because if the toast burns it can be a fire hazard. Anything which comes with a electrical plug comes with a warning label. Foreigners must think Americans are some of the dumbest people who ever lived to need such warning labels. The elevator must not reach the top for most Americans. It’s the most obvious conclusion.

It may seem harmless to file frivolous lawsuits to see what you can get out of it, but it’s not. Many people who identify as socialists or lean left believe big corporations are evil anyways, they poison the public, they gouge the public, treat their employees poorly, what’s wrong with filing a few lawsuits against billion dollar corporations and see if you can get them to pony up some money? It’s not like they’ll miss it. This is very skewed thinking based on crooked logic.

Billion dollar corporations notwithstanding, most small businesses cannot afford to fight frivolous lawsuits. Even if the court decides to dismiss the lawsuit or find in favor of the defendant (small business), there are still significant attorney’s fees which a small business has to shell out. The burden of proof is on the defendant to disprove the lawsuit. And it’s money most small and moderate sized businesses can ill afford.  And when people file frivolous lawsuits, it adds to the backlog in court and prevents legitimate lawsuits from being heard in a timely manner. So, the teenagers who thinks it’s harmless to sue McDonald’s for making them fat, they are preventing legitimate lawsuits to come before a judge, they are preventing real victims for getting their justice.

To counter this, big corporations have paid big money to get the best legal brains together and seek a solution. And find one they did, they created the ‘Arbitration Clause’ to be included in all kinds of contracts, service contract, employment contracts, every single contract out there has an arbitration and mediation clause. You want to get cellular service from AT&T, you must sign an arbitration agreement, which bans you from filing a class action lawsuit if they start charging your erroneous fees. If a customer is unsuccessful in getting the fees reversed from their billing department, that customer is banned from filing a class action lawsuit and pooling all the other customers who’ve been charged with the same fee. This is because of the Federal Arbitration Act, which was passed in 1925 and came into effect on January 1, 1926, which states:

[The Federal Arbitration Act] provides for contractually-based compulsory and binding arbitration, resulting in an arbitration award entered by an arbitrator or arbitration panel as opposed to a judgment entered by a court of law. In an arbitration the parties give up the right to an appeal on substantive grounds to a court.

The Federal Arbitration Act requires that where the parties have agreed to arbitrate, they must do so in lieu of going to court.

Once an award is entered by an arbitrator or arbitration panel, it must be “confirmed” in a court of law. Once confirmed, the award is then reduced to an enforceable judgment, which may be enforced by the winning party in court, like any other judgment. Under the Federal Arbitration Act awards must be confirmed within one year; while any objection to an award must be challenged by the losing party within three months. An arbitration agreement may be entered “prospectively”—that is, in advance of any actual dispute; or may be entered into by disputing parties once a dispute has arisen.

Big corporations have added one caveat in Arbitration agreements, if the plaintiff doesn’t agree with the results of the arbitration and decides to bring a lawsuit before the court, and if the plaintiff loses, they are responsible for the attorney fees and costs of the winning party. Most individuals do not have the resources to do this. So, people are left with two choices, accept the arbitration which they deem to be unsatisfactory or abandon the complaint all together.

The guy that comes to steam your carpet makes you sign an arbitration clause in case you are unhappy with his work and decide to sue him. Employers make their employees sign arbitration agreements as a condition of their employment. Doctors make their prospective new patients sign an arbitration agreement to settle any malpractice claims. Hospitals make patients sign arbitration agreements, as they are being wheeled in for life saving surgery, the nurse is having you sign a contract promising you won’t sue them if they remove the wrong organ or limb by mistake.

Because lawyers failed in their fiduciary duty to the justice system and are after a quick buck, they’ve co-opted away the rights of consumers, patients, employees and the average citizen and the small to middle size business owners took advantage of this opportunity.

The proliferation of mediation and arbitration agreements have reached absurd levels. Even religious organizations who offer controversial therapies and treatments are having their parishioners sign arbitration agreements:

“Religious arbitration, at its best, ensures that people can resolve their disputes in accordance with deeply held religious beliefs,” said Michael A. Helfand, an associate professor at Pepperdine University School of Law and an arbitrator in a rabbinical court in New York. “But both religious communities and courts need to make sure that the protections the law has put in place to make it a fair and unbiased process are actually implemented.”

Few courts have intervened, saying the terms of arbitration are detailed in binding contracts signed by both parties. Some judges are also reluctant to risk infringing the First Amendment rights of religious groups, according to a review of court decisions and interviews with lawyers.

In a case of a former Church of Scientology member who ran afoul of this organization and was declared a suppressed person, because of the binding arbitration agreement he signed with the church when he joined, he was forced “to take his claim that the church had defrauded him of tens of thousands of dollars before a panel of Scientologists, instead of going to court.”

In many large class action suits, the main complaint was always the lawyers kept 50% of the settlement and the plaintiffs split the rest of the 50% amongst themselves, which depending on the number of plaintiffs, each plaintiff may not end up with much. Many viewed this system to be unjust. The other side of that argument is lawyers do all the work as class action plaintiffs do not pay attorney fees to file their suit, their lawyers only get paid when there is a settlement and some cases could take years.

Both sides have their valid points, but the main concern here is if the tort action is taken out of the courts and into the private offices of attorneys, there is no judicial oversight. There is no judge to preside over the matter so all parties are operating under the same set of rules. The binding arbitration agreements have privatized a whole section of the legal system and this is denying plaintiffs their due process.

When faced with signing an employment contract which has a binding arbitration clause versus not having a job, this is not a choice. When you wheeled into the ER for an emergency and you are in need of life saving surgery and you or your next of kin is handed a piece of paper which basically signs your life away if the surgery goes wrong, is that really a choice?

When a motion to dismiss class action lawsuits comes before some judges, due to the laws in place, they must dismiss the class action suit with a heavy heart knowing what injustice they’ve inflicted on the plaintiffs, but they must follow the letter of the law:

The class action was brought by a former waiter on behalf of other low-wage employees. The waiter, Charles Walton, said Applebee’s made workers sweep floors, stock silverware, scrub booths and empty trash cans, but did not pay them a fair wage for the extra tasks. The Applebee’s employees, who relied on tips, often ended up making less than minimum wage. Employment lawyers said these practices were widespread in the restaurant industry.

The Rose Group, which owned the restaurants, defended its practices and urged Judge Schiller to dismiss the lawsuit since Mr. Walton signed an employee contract that included “a mutual promise to resolve claims by binding arbitration.”

The request troubled Judge Schiller. “It is just these kinds of cases where it’s important to have a jury,” he said.

Big corporations and big moneyed interests have one-upped the American public again, besides paying low wages, no benefits and job insecurity, now they are unwilling to pay their fare share of damages.


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