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End Mandatory Arbitration

Supreme Court 2009-2010: Pro-Corporate, But Continued Trend Towards Deferral to State Authority

Yesterday, the Supreme Court ended its term with a bang with a ruling in McDonald v. City of Chicago that state gun control regulations can be struck down by federal courts based on the Second Amendment. While the number and scale of blockbuster decisions was not so high this session, the singular impact of the Citizens United case earlier in the term unleashing unregulated corporate money on elections, combined with the dangerous implications of the Rent-A-Center, West v. Jackson arbitration decision, emphasizes the pro-corporate bias the Supreme Court has increasingly exercised in recent years.

Arbitration: "Set up to squeeze small sums of money out of desperately poor people"

The headline above is a quote from former West Virginia Supreme Court Justice Richard Neely, describing what his role was as an arbitrator at the National Arbitration Forum (NAF), a for-profit company hired to enforce mandatory arbitration clauses for credit card consumer loans.  "NAF is nothing more than an arm of the collection industry hiding behind a veneer of impartiality," says Richard Neely.

In a devastating expose by BusinessWeek, Neely and other former arbitrators describe an arbitration system stacked completely against consumers-- a system where creditors win 99.8% of all disputes involving companies ranging from Bank of America to Sears to Citgroup. Arbitration clauses buried in the fine print of credit card offers means consumers lose the right to have disputes decided in an independent court and instead are forced into corporation-selected arbitration firms.

Expanding Access to Justice in the Courts

James Madison, one of the main drafters of the Constitution and the fourth President, wrote that, "Trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." Yet, today, consumers, employees and victims of corporate negligence are increasingly being denied access to justice through the courts.