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It was also relatively recently (2018) reinforced by the Supreme Court in the case Epic Systems Corp. v. Lewis. However, there are (as companies have now been f

by xoa 5y ago

It was also relatively recently (2018) reinforced by the Supreme Court in the case Epic Systems Corp. v. Lewis. However, there are (as companies have now been finding out) still standards in the courts for arbitration. It's not just a wink wink way to escape all liability entirely, and is in fact supposed to be fair and reasonable. In particular, terms like Amazon's are in legal jargon "contracts of adhesion", take-it-or-leave-it offerings where one side has vastly more bargaining power than the other. Contracts of adhesion aren't inherently illegal, but they are subject to special scrutiny to make sure terms aren't unconscionable. Amongst other things this means the powerful party putting in an arbitration clause needs to pay for it, and they can't just unilaterally change that after the fact even if they have a clause saying they can because courts would not permit it and the whole thing would go down in flames anyway. I definitely agree with people indulging in a bit of dark amusement over big corps that so blatantly tried to rig things in their favor and for once got hoist by their own petard.

wahern 5y ago
> Amongst other things this means the powerful party putting in an arbitration clause needs to pay for it, and they can't just unilaterally change that after the fact even if they have a clause saying they can because courts would not permit it and the whole thing would go down in flames anyway. Do you have any Federal caselaw citations for that? Serious question. Arbitration clauses didn't become nearly universal until after AT&T Mobility v. Concepcion, 563 U.S. 333 (2011). That decision said that state common law doctrines like unconscionability were pre-empted by the Federal Arbitration Act. After that decision the shift to mandatory arbitration began in earnest across all industries. Federal law famously has no common law. (Not strictly true in practice, but true enough in this case.) I don't know of any Federal law, statutory or pseudo-common law, which could substitute for doctrines like unconscionability, especially as applied to arbitration clauses. They may exist (thus the sincere question), but I can't bring to mind any limiting principles beyond simple rules of interpretation (e.g. resolve ambiguity against the drafter). Certainly in a cursory search it seems that it's not unheard of for such clauses, even in consumer contracts, to require a plaintiff to pay all expenses if they lose--i.e. English rule for attorney's fees. The only limit seemed to be that an arbitration clause couldn't be used to restrict the benefit of other explicit Federal statutory rights, but those seem to be in short supply and lacking the breadth of the FAA. I suspect one of the only reasons arbitration clauses haven't become even worse for consumers is out of fear of Federal Trade Commission (FTC) attention. But that seems more like a temporary reprieve. All it takes is one company to call the FTC's bluff to embolden everybody else. AFAIU consumer-oriented companies refrained from using mandatory arbitration clauses largely out of fear of FTC reprisal for using clauses that were likely to fail under state law of the most populous states. But once Federal courts made it clear that the last of the state law barriers was pre-empted, fear of the FTC dissipated even though the FTC had no more or less powers than before Concepcion.

by xoa 5y ago

wahern 5y ago

> Amongst other things this means the powerful party putting in an arbitration clause needs to pay for it, and they can't just unilaterally change that after the fact even if they have a clause saying they can because courts would not permit it and the whole thing would go down in flames anyway. Do you have any Federal caselaw citations for that? Serious question. Arbitration clauses didn't become nearly universal until after AT&T Mobility v. Concepcion, 563 U.S. 333 (2011). That decision said that state common law doctrines like unconscionability were pre-empted by the Federal Arbitration Act. After that decision the shift to mandatory arbitration began in earnest across all industries. Federal law famously has no common law. (Not strictly true in practice, but true enough in this case.) I don't know of any Federal law, statutory or pseudo-common law, which could substitute for doctrines like unconscionability, especially as applied to arbitration clauses. They may exist (thus the sincere question), but I can't bring to mind any limiting principles beyond simple rules of interpretation (e.g. resolve ambiguity against the drafter). Certainly in a cursory search it seems that it's not unheard of for such clauses, even in consumer contracts, to require a plaintiff to pay all expenses if they lose--i.e. English rule for attorney's fees. The only limit seemed to be that an arbitration clause couldn't be used to restrict the benefit of other explicit Federal statutory rights, but those seem to be in short supply and lacking the breadth of the FAA. I suspect one of the only reasons arbitration clauses haven't become even worse for consumers is out of fear of Federal Trade Commission (FTC) attention. But that seems more like a temporary reprieve. All it takes is one company to call the FTC's bluff to embolden everybody else. AFAIU consumer-oriented companies refrained from using mandatory arbitration clauses largely out of fear of FTC reprisal for using clauses that were likely to fail under state law of the most populous states. But once Federal courts made it clear that the last of the state law barriers was pre-empted, fear of the FTC dissipated even though the FTC had no more or less powers than before Concepcion.