Hawaii Personal Injury Blog - forced arbitration

Bank of America Stops Forcing Arbitration od Disputes on Customers

Wayne Parsons — Fri, 14 Aug 2009 19:28:08 GMT

The AP (8/13, Freed) reported, "Bank of America Corp. said that as of Thursday it will stop requiring that disputes with its credit card holders and banking and lending customers be settled by binding arbitration, opening the door for class-action and other lawsuits to push up the bank's legal costs." Bank of America spokeswoman Shirley Norton "acknowledged that the bank may face more lawsuits now, but said Bank of America is hoping to work out most disputes directly with customers." David Robertson, "publisher of the Nilson Report, which tracks the credit card industry, said he believes Bank of America's decision was a result of" the recent decisions by the National Arbitration Forum and the American Arbitration Association-two major groups in the field-to stop handling arbitration disputes, as well as by increased "congressional scrutiny."

The Bloomberg News (8/13, Mildenberg) reported, "The change as of today also covers auto, recreational vehicle and marine loans, spokeswoman Betty Riess said. The bank wouldn't disclose how many arbitration cases occur annually, though the number of credit-card disputes handled through arbitration has declined sharply since mid-2008, she said."

The Wall Street Journal (8/14, C3, Sidel) reports that Bank of America's move, which takes effect immediately, is not limited to debt collection, and includes all consumer disputes. Citigroup, which does not typically employ arbitration, said it was monitoring the situation.

Reuters (8/13, Stempel) reported that it is not clear whether other major card issuers would follow Bank of America's lead.

In a blog at the Wall Street Journal (8/13) reports, Dionne Searcey noted that Bank of America still believes arbitration is a fair dispute-resolution technique, but made the change because many of their customers feel differently.

Originally posted at InjuryBoard by Wayne Parsons

Mandatory Binding Arbitration - Forced Arbitration - Is Bad For Consumers And Congress Should Act

Wayne Parsons — Fri, 12 Jun 2009 14:19:14 GMT

This week on National Public Radio (NPR) “All Things Considered” highlights new legislation banning pre-dispute mandatory binding arbitration clauses. A recent article posted on Injury Board is a good resource on the subject of forced arbitration and covers the NPR story: NPR Examines "An Arbitration Culture".

NPR spoke with Jamie Leigh Jones, who had a harrowing experience as a private contractor in Iraq when she was raped and beaten by her coworkers. When criminal charges could not be filed, she sought to hold her employer, KBR / Halliburton, accountable for their misconduct. But a forced arbitration clause buried in her employment agreement meant she could not have a jury trial. Instead, she would have to go to arbitration, on the corporation's own terms, for a secret, one-sided tribunal. Jamie’s attorney, American Association of Justice (AAJ) member Todd Kelly, and her appellate counsel is John Vail of the Center for Constitutional Litigation.

In April AAJ and other consumer, employment, and civil rights groups urged Congress to pass the Arbitration Fairness Act and the Fairness in Nursing Home Arbitration Act. These two bills would put an end to binding mandatory arbitration clauses (forced arbitration) in certain consumer, employment, franchise, and nursing home care contracts that unfairly target certain vulnerable people.

On Arbitration Fairness Day, over 30 victims of forced arbitration from targeted states came to Washington D.C. to lobby for the passage of the bills. The day was marked with a noon press conference at which the sponsors of the Arbitration Fairness Act, Senator Russ Feingold and Representative Hank Johnson, spoke about the need for the legislation. Also speaking at the press conference were Jamie and other individuals who have suffered terrible consequences as the result of forced arbitration.

I have written articles on this issue before on my Blog and you will find lots of background information and resources in those articles.

Forced Arbitration: Tort Reform By Contract

Fact Sheet For Arbitration Fairness Act

Public Justice, the great consumer advocate has a 15 year record of challenging these abusive corporate tactics in Court and I am sure that Arthur Bryant an Paul Bland, consumer giants and great attorneys at Public Justice will celebrate the passage of these Bills. If you are interested in a true American hero, Paul Bland is a role model for that category:

Top Dog for the Underdog For his all-consuming dedication, some recognition from his countrymen
David Deal
When he was in law school, Paul Bland knew only that he wanted to pursue public service. He didn’t foresee a career as an award-winning champion of consumer rights.

If the world of consumer rights law is a battle against modern-day Goliaths—banks, HMOs, mortgage brokers, credit card companies and others with powerful resources—then F. Paul Bland Jr. ’86 is more than ready to play David. And, he says, the stones in his slingshot include some lessons learned at Harvard Law School from a giant of another kind: the late Vern Countryman, who taught at HLS from 1963 until 1987.

So when the National Consumer Law Center recently honored Bland’s contributions to consumer rights advocacy with the Vern Countryman Consumer Law Award, Bland felt a renewed sense of connection to the professor he encountered at HLS more than 20 years ago.

As a staff attorney at Public Justice, a public interest law firm with headquarters in Washington, D.C.—and especially as director of the firm’s Mandatory Arbitration Abuse Prevention Project—Bland has fought some of the more egregious injustices committed against consumers by major companies. Though mandatory arbitration is designed to prevent a glut of consumer claims from tying up the courts, he explains, some companies add arbitration clauses to their consumer contracts—including clauses compelling consumers to give up the right to pursue class-action litigation—that make it nearly impossible for customers to bring cases. The provisions take many forms, he adds, but their goal is the same: to make the arbitration process discouragingly opaque and intimidating.

“People think of alternative dispute resolution as having so much promise—giving fairer, faster ways to deal with claims,” Bland says. “But what’s happening in a lot of cases is that the more powerful party takes advantage. A subprime lender is taking advantage of a poor person, or a car dealer of a consumer, or a nursing home of the person going in.”

Bland says his views of the problems faced by the powerless were influenced by Countryman during law school, even though he never took a class with the professor. In his third year, as president of the Journal on Legislation, he solicited Countryman to write an article on an important piece of bankruptcy legislation. At first, Bland found bankruptcy law “unbelievably boring,” but he says he began to understand its importance and its relevance to consumer protection in conversations with Countryman, who repeatedly tried to rouse his interest in it.

“As I got into the world and I started representing low-income people, a lot of the ideas that he was trying to explain have become a lot clearer to me,” Bland says. “What I’ve come to see is that [bankruptcy law] really stands between a lot of people and the equivalent of debtors’ prison. It’s an incredibly important protection.”

Bland’s caseload has taken him to state and federal courts across the country, including the U.S. Supreme Court in 2005. But even when he travels, he makes time to meet with other consumer advocates (“a community of lawyers who really stick together,” he says) to share some of the finer points of fighting uphill battles.

“The asymmetry of resources is huge,” he says, “but it can be fun to be the underdog.”

Voices count. People matter. Your opinion matters. Even the great attorney Paul Bland and the team at Public Justice cannot do it without you. The corporate schemes to undermine the rights of American consumers by tricks like forced arbitration have been stymied by individual attorneys like Paul Bland and Arthur Bryant, but they need more tolls like The Arbitration Fairness Act to make sure that justice is possible for all Americans. So speak up for your rights and take America back from the corporate CEO's and CFO's and the U.S. Chamber of Commerce, their lobbying tool! Never forget that Together We Are Strong".

Originally posted at InjuryBoard by Wayne Parsons

CONSUMER ALERT: Public Justice and Consumer Watchdog Force Cingular/AT&T to Face Consumer Claims for Overcharges and Bad Cell Phone Service in Federal Court

Wayne Parsons — Tue, 02 Jun 2009 11:04:25 GMT

In an important decision for consumers a federal court rejects AT&T’s efforts to bar its customers from joining together to hold the company accountable in court. Credit Public Justice, America's greatest public interest law firm for once again leading the fight against big corporations that try to take advantage of consumers. No consumer could fight these battles on their own and often no law firm is smart enough or willing to take on these giant scams. Arthur Bryant and the warriors at Public Justice do it over and over again and they exemplify what this country is all about. Hats off to Arthur Bryant and the team at Public Justice. Their allies at Consumer Watchdog also deserve our accolades for this victory. After you read this I hope you will go to their websites, join and make a small gift to support this work. Here is the joint press release:

Santa Monica, CA – A class action lawsuit charging that millions of cell phone users were misled and overcharged when Cingular merged with AT&T Wireless in 2004 may go forward, a federal court ruled on Tuesday. In a victory for consumers nationwide, the U.S. District Court for the District of Washington in Coneff v. AT&T struck down a clause in AT&T’s contract that the company argued allowed it to force its customers to bring their claims individually in arbitration proceedings, rather than in a classaction in court. The District Court held that without a class action, the vast majority of AT&T’scustomers would never obtain justice—and for that reason refused to enforce the contract provision.

Cingular bought AT&T’s cell phone system in October 2004, after assuring federal regulators that the merger would be “seamless.” But, the lawsuit contends, instead of providing the new and improved services it promised AT&T customers, Cingular immediately began dismantling and degrading the AT&T network, forcing AT&T customers to move to Cingular’s network. That meant buying new phone equipment, moving to higher cost plans, and, in some cases, an $18 “transfer” or “upgrade fee.”

Some customers who tried to go to another company were hit with “early termination fees” of $175. Others who didn’t want to pay or couldn’t afford the termination fees were stuck with ridingout their contract with AT&T Wireless while suffering poor to no reception – and paying an extra monthly fee of $4.99. Cingular ultimately shut down the former AT&T network. Cingular later

changed its corporate name to AT&T.

The case was filed in Seattle, Washington in July 2006 on behalf of all original AT&T Wireless customers who were deceived or overcharged as a result of the merger. AT&T responded by asking the court to dismiss the case on the grounds that under a term buried in the fine print of its service contracts, customers are barred from bringing class actions and instead must fight the company one-on-one through arbitration. The customers argued that because their claims are individually small but complex, the class action ban would prevent them from holding the company accountable at all—a result not permitted in Washington, where AT&T was based at the time.

U.S. District Court Judge Ricardo Martinez agreed, striking down the arbitration clause as“unconscionable” under Washington law. He explained that the contract term would “effectively commerce.” “The Court will not condone such a broad and exculpatory practice,” he added, emphasizing that the central purpose of class actions is to curb fraudulent business practices such as those alleged in this case.

The court also emphatically rejected AT&T’s argument that the court should apply the laws of other states chosen by AT&T in its contract, even if those states’ laws are less protective of consumers than Washington’s and would permit AT&T to bar their residents from participating in the class action.

“It stands to reason that if a company chooses to do business from the state of Washington, it can’t use the fine print of its contract to give itself carte blanche when it violates Washington’s strong consumer protection laws,” said Leslie Bailey, a staff attorney with the national public interest law firm Public Justice. “Judge Martinez saw through AT&T’s legal arguments to the injustice of what the corporation was trying to do here. This is an extremely well-reasoned decision, and is likely to be influential with other courts around the nation.” Bailey and Public Justice staff attorney Paul Bland led the customers’ fight to keep their case in court, and Bland argued the case before Judge Martinez.

“This is a major victory for AT&T customers all over the nation,” said Harvey Rosenfield, a lawyer for the non-profit Consumer Watchdog, a California-based crusader for consumer rights. “The company broke its promise to its customers, making them pay millions of dollars more than they should have. Now we can move forward to get people their money back.”

“It’s been a long battle and there is still much work to be done,” said Kevin Coluccio of the law firm of Stritmatter, Kessler, Whelan and Coluccio, based in Seattle. “But today’s decision confirms that AT&T does not have the unlimited right to immunize itself from accountability under the law.”

In addition to Rosenfield, Bland, Bailey and Coluccio, the plaintiffs are represented by Bruce Simon and Esther Klisura of Pearson, Simon, Warshaw and Penny; Paul Stritmatter of the Stritmatter firm, as well as several other nationally-recognized consumer advocates and law firms.

Originally posted at InjuryBoard by Wayne Parsons

New Mexico Supreme Court Strikes Down One-Sided Mandatory Arbitration Clause

Wayne Parsons — Fri, 01 May 2009 14:25:57 GMT

A news note from:

Arthur Bryant
Executive Director
Public Justice
& the Public Justice Foundation

The Public Justice "Access to Justice Campaign" and "Mandatory Arbitration Abuse Prevention Project" have just won a major victory in the New Mexico Supreme Court! In Cordova v. World Finance Corporation of New Mexico, the Court unanimously struck down a one-sided mandatory arbitration clause that allowed the company to sue its customers in court, but forced its customers out of court and into arbitration.

"This case requires us to review the validity of a small loan company's form arbitration provision that would limit a borrower to mandatory arbitration as a forum to settle all disputes whatsoever, while reserving for the lender the exclusive option of access to the courts for all remedies the lender is most likely to pursue against the borrower, " the Court said. "We hold that such an inherently one-sided agreement is against New Mexico public policy and is therefore void as unconscionable."

The facts of the case are truly disturbing. When Laura Cordova of Las Vegas, N.M., got sick and fell behind on her short-term loan payments, she explained her situation to World Finance. Apparently, the company didn't believe her. For weeks, its agents called Ms. Cordova on her job at a local non-profit agency. Then they began calling her boss and coworkers. They were told that she was at home recovering from lung surgery, but a World Finance representative showed up at Ms. Cordova's workplace, disguised as a prospective client in need of social services.

When the ruse was uncovered and Ms. Cordova was apprised of it, World Finance threatened to sue the employer for violating "client confidentiality," even though the "client" in this instance was an imposter. Let go from her job because of the situation, Ms. Cordova sued World Finance over its collection practices, but World Finance insisted that, while it could sue her, the only way she could redress her grievances was to submit to arbitration by a third party contracted by World Finance. The New Mexico Supreme Court's decision held otherwise -- and preserves Ms. Cordova's right to a day in court.

To read the New Mexico Supreme Court's decision in Cordova, click here.

To read Public Justice's brief in Cordova, click here.

Congratulations and thanks to Public Justice Staff Attorney Paul Bland, who argued the case, and plaintiff's lead counsel, Rob Treinen of Feferman & Warren in Albuquerque. Congratulations and thanks to you, too, for helping make this victory possible. With your help, we will continue to fight against unfair mandatory arbitration and for access to justice for all.

Originally posted at InjuryBoard by Wayne Parsons

Forced Arbitration: Tort Reform By Contract

Wayne Parsons — Fri, 01 May 2009 14:13:20 GMT

Arbitration Fairnress Day was celebrated on April 29th and now the public is being educated about the evil of forced arbitration also know as "binding mandatory arbitration" or BME. Thwety five years ago when the CEO's of major insurance companies, the drug manufacturers, and big corporations coined the term "tort reform" and started to mislead the public about the need to reform the civil justice system. that campaign of outright lies and mis-information is still going on and has caused great injury to the American public and great losses to the country.

Forced Arbitration is one bullet that corporate CEOs have fired at unsuspecting citizens. First you must know that there are three things that define a democracy of the people, by the people and for the people:

The right to vote
The right to trial by jury
The right to sue "the King"

Okay we don't have a King - at least since Bush and Cahney have high-tailed it out of Washington, D.C. And if you look into the deceit and the scheme behind forced arbitration or BMA, you will see the greedy face of "corporateers" - the army of greed mongers who put profits ahead of people. I call them "tort deformers" not tort reformers. These high paid CEO's figured that if they couldn't get Congress and the state legislatures to eliminate the right of an average American to have a trial by a jury of citizens, they could do the same thing by putting a mandatory arbitration clause in every contract that Americans sign. All of your health insurance policies, many of your property and casualty insurance policies, the contract your wife signs when she starts her pregnancy at the local doctor's office. Contracts witha builder or a home developer for your new hime. Loan finance documents. These forced arbitration clauses are everywhere.

With an overwhelming number of pro-corporation judges now in the judiciary, the courts have upheld these one-sided agreements as part of the "right to contract". It doesn't matter to the conservative judges that the forced arbitration clause is in the fine print and that no one reads those contracts anyway - I mean who would dream that a sneaky corporation or you pediatrician would trick you into giving up one of the most important rights in the Constitution - right to trial by jury - in a contract? Well, welcome to the world of the future. George Orwell is smiling down at us from above saying "I told you so".

http://www.youtube.com/watch?v=2QFtl55F_Uk

I have already alerted you to the important battle in Congress that is looming as the people face off against the "tort deformers" over this corporate end run of the Constitution.

Celebrate Arbitration Fairness Day On April 29, 2009

Fact Sheet For Arbitration Fairness Act

Paul Bland at Public Justice has won impressive battles against the corporations that tout tort reform in court but he and other consumer advocates need the Congress and state legislatures to put an end to the frivolous and greedy "tort deform" movement.

Another great resource on forced arbitration and current news exposing the corporate tort deformers is found at Civil Justice and Democracy and at The Pop Tort.

What do you think about being forced to give up your right to trial by jury?

Originally posted at InjuryBoard by Wayne Parsons

Fact Sheet For Arbitration Fairness Act

Wayne Parsons — Wed, 29 Apr 2009 19:30:11 GMT

Consumer advocates Fair Arbitration Now point out that:

"Corporations oppose the Arbitration Fairness Act because the system of forced arbitration allows them to escape accountability for discrimination, harassment, gross negligence, fraud, and other corporate wrongdoing. Businesses aren’t looking out for the best interests of consumers and employees; they want to protect their ability to force individuals into a system that they design. Who wouldn’t want to control the method by which claims against them are resolved?"

Two bipartisan bills introduced this Congress will make sure the decision to arbitrate is made voluntarily and after a dispute has arisen, so corporations cannot manipulate the arbitration system in their favor at the expense of consumers:

Arbitration Fairness Act of 2009 (H.R. 1020)

The bill would amend the Federal Arbitration Act to prevent the use of pre-dispute mandatory arbitration clauses in consumer, employment and franchise agreements. This legislation would not prohibit arbitration.

Sponsors: Rep. Hank Johnson (D-Ga.)

The Fairness in Nursing Home Arbitration Act (S. 512 / H.R. 1237)

Would eliminate forced arbitration clauses specifically in nursing home contracts.

Sponsors: Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) / Rep. Linda Sanchez (D-Calif.)

Support both of these bills by writing your representatives.

In recent research Americans oppose forced arbitration that takes away their constitutional rights:

Americans widely oppose corporations using mandatory binding arbitration clauses in the fine print of consumer and employment contracts, according to national polling of likely voters conducted by Lake Research Partners.

Forced arbitration clauses are hidden in the fine print of everything from cell phone, home, credit card and retirement account terms of agreement to employment and nursing home contracts. Just by taking a job or buying a product or service, consumers and employees are forced to give up their right to take their case to court if they are harmed by a corporation.

Originally posted at InjuryBoard by Wayne Parsons

Celebrate Arbitration Fairness Day On April 29, 2009

Wayne Parsons — Wed, 29 Apr 2009 19:19:17 GMT

Forced arbitration is another example of how corporations are taking advantage of Americans. As a private system without an impartial judge or a jury, mandatory arbitration allows companies like AIG to play by their own rules and escape accountability when they harm consumers and employees.

Did you know that every member of Kaiser Permanente Health Care System will be forced into an unfair and expensive mandatory arbitration/ That's right. Lets say a child dies after being born when the kaiser doctor fails to recognize a life threatening medical condition. When the family asks kaiser to take responsibility _ doctors and hospitals as we all know - never - take responsibility for their errors _ the young couple will be barred from putting their case in front of a judge and jury, but will be forced to pay exhorbinant fees to an arbitration panel. Why? Because that is what the Kaiser contract says. I have never seem a case where the Kaiser member had ever been informed of this technicality in the fine print. I represented a school teacher once and it was in the contract between the DOE and Kaiser - the teacher had never seen it. Does that sound fair. No way. But that is what will happen to you if you have Kaiser Health Care.

Even if you refuse to sign a contract but show up for work or use a product or service, you can lose even the option of going to court. People who have been harmed by discrimination, negligence, defective products or scams should not be forced to sign their rights away.

Thankfully, there is already legislation moving through Congress to put an end to forced arbitration. The Arbitration Fairness Act would make mandatory binding arbitration unenforceable in civil rights, employment, consumer, and franchise disputes, but would not eliminate voluntary arbitration agreed to after a dispute arises.

This week, constituents from throughout the country who have been trapped in forced arbitration are on Capitol Hill with the Fair Arbitration Now Coalition to urge lawmakers to make the Arbitration Fairness Act law.

The petition already has collected nearly 5,000 signatures and their goal is to gather 25,000 signatures by April 29th when consumers and their advocates meet in D.C. to share stories and testimony with our Congressional leaders on National Arbitration Fairness Day.

The Fair Arbitration Now Coalition's goal is to pass the Arbitration Fairness Act (H.R. 1020). The Act does not eliminate arbitration, it just makes it voluntary. In other words, big business can't force you to sign away your right to hold them accountable for their wrongdoings, but a consumer can still choose arbitration.

The Arbitration Fairness Act would only restore the Federal Arbitration Act to what it was originally intended to do. Contrary to what the Chamber claims, forced arbitration has not been used for 80 years in consumer and employment contracts; it is business to business arbitration that has been used for 80 years. Corporations started using forced arbitration in consumer contracts beginning in the mid to late 1990's, after court cases held that there was nothing in the Federal Arbitration Act that limited the use of forced arbitration to only business-to-business disputes. .

The Fair Arbitration Now coalition represents consumers, employees, homeowners, franchise holders and more. They range from Public Citizen, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association of Justice to the National Consumer Voice for Long-Term Care, Home Owners for Better Building and the Leadership Conference on Civil Rights.

Join them in urging your members of Congress to enact the Arbitration Fairness Act now to protect the rights of employees and consumers by using the form below.

Forced arbitration clauses are often buried in the fine print of terms of agreement and contracts for employment, insurance, home-building, credit cards, or nursing facilities. We’re spending billions to bail the out many of companies writing these contracts – now is the time to put a stop to companies evading accountability, or our economy will only get worse.

Florida resident Denise Richardson warms consumers in that state about the evils of forced arbitration:

I can't help but wonder what our founding fathers would think of this new method corporations have found to hide from accountability. Access to our judicial system is our most effective means of deterring fraud and holding wrongdoers accountable for harm their actions (or inactions) may have caused.

But, when a business includes a binding mandatory arbitration (BMA) requirement in its contract, it basically means if you have a dispute, it must be decided outside of the courts. Instead, those cases must be decided by arbitrators who are not bound by the Rule of Law that ensures consumers get a fair shake in the civil justice system.

And because BMA clauses are "binding," you must abide by the decision of the arbitrator. You have no right to appeal the decision.

These“You can't sue me” clauses essentially mean that you waive your right to sue if a dispute arises–but the same doesn’t always apply to them. That's right-the businesses that don't want you suing them don't waive their right to sue you. They only force you to waive your rights. It isn't reciprocal. It's a one way street, and they own the roadway.

Currently, most of us are bound by these clauses. They're everywhere, tucked in the fine print of most contracts: health insurance,cell phone providers, car rentals, credit cards, nursing homes, employment, construction, home repair, and computer agreements – to name a few.

Without the threat of large fines or penalties for their potential negligence or recklessness, and without consumer access to the courts, corporations have little incentive to assume corporate responsibility. What will force them to take effective measures to ensure that our disputes are handled properly?

Denise is a consumer advocate:

The National Association of Consumer Advocates is gearing up for National Arbitration Fairness Day which will be April 29, 2009. NACA wants to take consumers to Washington, DC to share their stories with Congress and humanize the effects of binding mandatory arbitration clauses.

These BMA clauses seem particularly disturbing today given the state of our economy as lack of accountability and oversight helped get us here.Corporate accountability, transparency and responsibility are vital to our economic recovery. The explosion of BMA clauses only serve to provide an avenue of escape for those who wish to place themselves above the laws intended to protect us, and in doing so, further harms our economy and our very judicial system.

Denise Richardson, whose picture graces this post, is a consumer advocate, author and regular contributor to this blog. Are you dealing with an arbitration clause in a contract? Would you like more information about your rights as a consumer? Please share your thoughts here, or conact her at www.Givemebackmycredit.com

I do not believe that the public is generally aware of the evils of forced arbitration or that it is a tool of giants like AIG and Kaiser Permanente Health Care and many other HMO's and doctors' groups. have you ever heard of this? Does it bother you? Let me know what you think?

Originally posted at InjuryBoard by Wayne Parsons