We live in a nation governed by a form of government and a legal system unprecedented and unrivaled in fairness and equality throughout the known history of our human race. One of this nation’s Founding Fathers, John Adams, said this about our legal system: “Representative government and trial by jury are the heart and lungs of liberty. Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle and fed and clothed like swine and hounds.” He issued this warning in the year 1774.
January 10th, 2012, our United States Supreme Court issued yet another opinion upholding the corporate mandate of “arbitration” over a consumer’s right to a jury trial and having her day in court when harmed by a corporation. The case is CompuCredit Corp v. Greenwood, 10-948. CompuCredit issued credit cards to folks with bad credit and gave them a $300.00 dollar line of credit. However, CompuCredit decided to charge their customers $257.00 dollars in fees for a $300.00 line of credit. Understandably, some angry and misled consumers wanted their day in court.
“No” said the Supreme Court because CompuCredit included an “arbitration clause” in the fine print on the back of the credit “agreement” between the unlucky folks obtaining the credit cards and the company. Therefore, the right to a trial by jury in any dispute arising with the company was waived. These seemingly benign clauses usually state in very fine print that the customer forgoes the right to a trial by jury and “chooses to submit any and all disputes to an arbitration panel governed by the rules of the (FAA) Federal Arbitration Act, blah, blah, blah….”
Sounds perfectly reasonable. Except that the FAA establishes “a liberal federal policy favoring arbitration” and arbitration panels tend to rule against the consumer in the majority of arbitration proceedings.
I argued an arbitration case in front of the U.S. 5th Circuit Court of Appeals: Iberia Credit Bureau, Inc. et al v. Cingular Wireless, et al., 379 F3d 159, (5th Circuit-2004) on behalf of a class action of thousands of consumers in a case brought against multiple cell phone providers for overbilling their customers. In spite of the fact that most customers never saw the “clause” in the fine print and those who did had no understanding of the legal consequences, the Court upheld the validity of the arbitration clause as to Cingular and Sprint. This ruling killed the consumers right to their day in court. The reality was that it would be next to impossible to arbitrate thousands of consumer claims, one at a time. The big consumer corporations KNOW this and this is precisely why they use arbitration clauses as a preemptory strike. A strategy. A tactic. All designed to eliminate corporate accountability by eliminating your RIGHT to a trial by jury.
I am certain John Adams would have a thing or two to say about this dangerous precedent of putting arbitration ahead of our sacrosanct right to a trial by jury. Congress is the only power that can change the laws and change the way the Supreme Court interprets the validity of arbitration clauses in consumer contracts. Too bad none of our current leaders in Congress are taking any action to protect your right to a trial by jury.