Forced Arbitration and Consumers: Florida Consumers Claims Against Companies Are Getting Harder to Fight

Posted By on August 8, 2013

Alternative dispute resolution – ways to resolve disputes outside of a courtroom – are supposed to be helpful to the Little Guy, the consumer who does not have the resources in time and money to fight the Big Corporation that has harmed him or her in some way. That’s the idea, anyway.

However, Florida laws that protect people against breach of contract and breach of warranty and personal injuries caused by companies and corporations are getting harder and harder to apply in a courtroom because big companies have found arbitration such a great bargain for them.

unbalance scales of justice public domain

Arbitration Replaces the Jury Trial: Companies Like This

Arbitration is a form of alternative dispute resolution where an arbitrator (or panel of arbitrators) decides the controversy, not a jury or a judge. There’s a hearing, there’s some presentation by both sides of their arguments, and there are forms of discovery and evidence collection. However, arbitration is not as formal as the judicial system’s courtroom procedures. Nor is arbitration as protective of the parties.

Today, Florida consumers need legal guidance on any claim that they may have with a corporation, especially a big national corporation, because not only do they have to determine if they have a legal claim, and what their legally recognized damages are under the applicable laws, but they now need to decide if they can even sue the company or if they are going to be forced into an Arbitration by the company.

As previously posted, more and more often Floridians are being forced into arbitration by companies who are inserting arbitration clauses into contracts like cellphone contracts, cable service contracts, and other common consumer contracts. More and more often, Florida lawyers are fighting for clients in conference rooms with arbitrators presiding over the proceedings, instead of courtrooms with judges.

Threat to Courtroom Access for Consumers Growing With Rise of Arbitration Cases

This is already a dangerous threat to due process protections that the federal constitution guarantees everyone. Jury trials aren’t friendly forums for businesses and they love the opportunity to avoid juries with an arbitration clause.

However, things are getting even downright dangerous these days, as court rulings are helping companies even more. Consider last week’s ruling by the United States Supreme Court in a case brought by the owner of an Italian restaurant against American Express Corporation.

Last Week: American Express v. Italian Colors Restaurant – U.S. Supreme Court Opinion

One week ago today, the United States Supreme Court issued its opinion in American Express v. Italian Colors Restaurant, and it’s not good news for consumers who want to fight their case against a company who has harmed them in a full-blown, traditional, courtroom jury trial.

Why?

It’s one more case where the appellate courts have come down in favor of Big Business enforcing arbitration agreements in contracts even though individual fights would be too costly for the plaintiffs and the only way that these plaintiffs could seek judicial relief, from a financial perspective, is through banding together in a class action. Here, the twist is that the High Court isn’t allowing claims to be grouped together in a class action arbitration, much less a class action lawsuit.

In last week’s 5-3 opinion, the U.S. Supreme Court ruled that even when the possible economic recovery for the plaintiff is miniscule when compared to the costs of arbitrating their claims independently, the plaintiffs cannot form a class action in order to arbitrate their claims as a group under the Federal Arbitration Act.

From Justice Antonin Scalia in the majority opinion:

“Respondents argue that requiring them to litigate their claims individually — as they contracted to do — would contravene the policies of the antitrust laws …. [b]ut the antitrust laws do not guarantee an affordable procedural path to the vindication of every claim.”

The case involved a group of retailers – store owners – who were unhappy with American Express’ policy on fees for when their cards were swiped for payment at the stores. The stores could not sue the big credit card company in court because of an arbitration clause in the American Express contract. The American Express contract forced them to opt for arbitration of their claims against American Express.

So the retailers pursued their claims against American Express via arbitration, but argued that the only way that it made sense for them to do so, money-wise, was to join together as a class in fighting the swipe fees charged by American Express. Too bad, so sad, responds the Supreme Court: American Express wins.

Not all the Justices agreed with this decision.

From Justices Elena Kagan (who wrote the dissenting opinion), Ruth Bader Ginsburg, and Stephen G. Breyer, the recognition that here was a David vs Goliath situation where a small Italian restaurant was going up against American Express and arguing that the big (huge) credit card / financial services company was manipulating the arbitration clause in order to maneuver around responsibility for its actions under federal law:

“Here is the nutshell version of this case, unfortunately obscured in the Court’s decision. The owner of a small restaurant (Italian Colors) thinks that American Express(Amex) has used its monopoly power to force merchants to accept a form contract violating the antitrust laws. The restaurateur wants to challenge the allegedly unlawful provision (imposing a tying arrangement), but the same contract’s arbitration clause prevents him from doing so.That term imposes a variety of procedural bars that would make pursuit of the antitrust claim a fool’s errand. So if the arbitration clause is enforceable, Amex has insulated itself from antitrust liability—even if it has in fact violated the law. The monopolist gets to use its monopoly power to insist on a contract effectively depriving its victims of all legal recourse.

And here is the nutshell version of today’s opinion,admirably flaunted rather than camouflaged: Too darn  bad.”

And from Justice Breyer:

the majority opinion allows the company to protect itself “… from liability for its own frauds by deliberately cheating large numbers of consumers out of individually small sums of money.”

You can read this new Supreme Court opinion here.

What Does This Mean for Florida Consumers?

What this cases does is approve Big Corporations in their efforts to circumvent the judicial system along with fairness in alternative dispute resolution by giving them the okay to simply bully the consumer into not only signing the arbitration clause (because without it, the big company won’t do business with the consumer) but to manhandle any complaints that the consumer may have in the future by making arbitration too darn expensive for the Little Guy to pursue and now, now allowing Little Guys to join together to share arbitration costs in a joint claim against the Big Company.

(This isn’t a wacky perspective on things. The same view is essentially expressed by the New York Times, for example.)

Bottom line? If you are a consumer of goods or services in Florida and you have been wronged, then it’s vital that you have your situation assessed by a Florida arbitration lawyer who can help you calculate your damages under the law as well as what venue is available to you in which to assert your legal claims.  And, now, whether it’s worth your time and money to do so.

photo

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

Comments

Leave a Reply

Please note: Comment moderation is currently enabled so there will be a delay between when you post your comment and when it shows up. Patience is a virtue; there is no need to re-submit your comment.

css.php