The New York Times, which can scarcely mention firearms policy without invoking the Gun Lobby, runs a big feature endorsing the claims of arbitration opponents that is curiously evasive about the role of the Litigation Lobby. Daniel Fisher, Forbes:
The writers who penned today’s New York Times Page One expose of arbitration clauses say they examined thousands of court documents and interviewed hundreds of lawyers, yet they fell for a rookie mistake: They confused class-action plaintiffs for the real thing….
The “article splayed across four pages of the Sunday Times” profiles the owner of the Italian Colors restaurant, the named plaintiff in a class action against American Express that went to the Supreme Court, as if he were typical of “plaintiffs [who] sprang up spontaneously and went out and hired lawyers to vindicate their rights?
Who were his lawyers? The Times doesn’t think you need to know. But here’s the main one: Gary B. Friedman, an attorney who specializes in suing credit-card companies. He recently suffered a bit of bad press when a federal judge in New York threw out a proposed settlement of another class action against Amex because Friedman had displayed “improper and disappointing conduct” by communicating sensitive information to a lawyer for the other side. The judge criticized Friedman for “blatant collusion” by negotiating a settlement with the defense that was “contrary to the wishes of the putative class.”
Now why couldn’t the enterprising Times reporters find room in such a large story for a mention of Friedman? Perhaps because he represents the real face of consumer class actions. These aren’t lawsuits by little guys like Carson trying to vindicate their rights against big corporations. Most are lawsuits by wealthy attorneys trying to get wealthier, by using the mechanism of the class action — originally developed to allow courts to declare classes of plaintiffs in civil-rights cases — to present companies with an offer they can’t refuse: Settle and pay us a rich fee, or risk a devastating loss in court.
Fisher summarizes: the Times “reports without skepticism the plaintiff-lawyer version of the story.” That’s a shame on a topic where even such a liberal figure as California Gov. Jerry Brown, who recently vetoed an anti-arbitration bill, acknowledges there are genuine concerns on both sides.
Our coverage of contractually agreed pre-dispute arbitration — including both the practical and the freedom-of-contract arguments for it — goes back to the early days of this site, including Coyote (“Here is how you should think about this proposed law: Attorneys are the taxi cartels, and arbitration is Uber. And the incumbents want their competitor banned.”), James Taranto on the Times as “two papers in one,” Andrew Pincus on arbitration as still pretty much the Litigation Lobby’s number one target. Much coverage also at Point of Law, including Ted Frank on a familiar-sounding law firm’s use of pre-dispute arbitration clauses.
P.S. I’ll bet he has: “Having worked extensively with Silver-Greenberg on this series over the past several months…” [Deepak Gupta, Public Citizen]
And: more thoughts at Cato at Liberty, including links to Cato work and discussion of why consumers so seldom switch from one provider to another in search of more favorable fine print on class action availability.
In a lawyer-stimulus move that incidentally trashed freedom of contract, the California legislature passed a bill that would have virtually banned arbitration of workplace disputes that has been agreed on in advance of a dispute. But California Governor Jerry Brown has now vetoed it, arguing that the research on the effects of arbitration is still inconclusive, that the state has means of regulating it short of a ban, and that the Supreme Court is currently considering in two cases whether California law already improperly restricts arbitration in violation of the Federal Arbitration Act, an objection that could be lodged against the new enactment as well. [Carl Larson, Saqui Law Group]
Unveiling a plan to ban the use of arbitration clauses that rule out class actions, the federal Consumer Financial Protection Bureau behaves as a Plaintiff’s Lawyer Protection Bureau [Andrew Pincus, Chamber’s Institute for Legal Reform] More: Boston Globe, Alison Frankel, Reuters. Earlier and related here, here, here (California) and generally. And regarding news reports that Chrysler offers a $200 discount to car buyers who accept pre-dispute arbitration, Ted Frank:
Chrysler willing to split savings of avoiding courts with buyers: $200 discount. Lawyers upset that it's disclosed what they cost consumers.
— tedfrank (@tedfrank) October 8, 2015
- Stock analyst in India puts out a “sell” recommendation, is arrested and jailed [W$J, compare Argentina economists]
- Dear Mayor Bill de Blasio, Messrs. Dodd, Frank, & Co.: London thanks you! (It’s now back on top over NYC as most-desired financial center.) [Business Insider]
- Amid court setbacks, SEC says it might tinker with its use of in-house administrative judges after all [David Michaels, Bloomberg]
- “The Consumer Financial Protection Bureau’s Arbitration Study: A Summary and Critique” [Jason Scott Johnston and Todd Zywicki, SSRN]
- “Rand Paul and Five Expats Sue the Feds Over FATCA” [Matt Welch, Reason, earlier on this exceedingly bad law]
- Sen. Elizabeth Warren (D-Mass.) came to Cato and spoke, that’s not a punch line setup but a real thing that happened [Tom Clougherty, more on Warren-Vitter and “too big to fail”]
- Use credit responsibly? Sucker! NYC first city to follow state trend toward banning employer use of credit history in hiring [Jennifer Mora, David Warner, and Rod Fliegel, Littler this spring]
- Study hyped as showing vaping serves as gateway to smoking doesn’t actually show that [Jacob Sullum]
- Your guano ticket to land-based wealth: 1856 law on bird droppings can help you claim an island [Mark Mancini, Mental Floss]
- Dignity of the bench: “Judge lied about claimed toilet-lid attack outside courthouse, jury finds” [ABA Journal; Waterloo, N.Y.]
- Someone’s using someone: “Providence using plaintiffs bar to become player in antitrust cases” [Jessica Karmasek, Legal Newsline, related]
- Competitive Enterprise Institute picks what it considers the nation’s six worst state AGs, most names are familiar to our readers [Hans Bader/CEI, more, full report in PDF, and thanks for link]
- “Frivolous Serial Pro Se Litigant Upset Journalists Portrayed Him As A Frivolous Serial Litigant” [Tim Cushing, TechDirt]
- Model of arbitration in Njal’s Saga: binding, provided it roughly tracks outcome of averted violence [Tyler Cowen]
- “Photos of Your Meal Could be Copyright Infringement in Germany” [Petapixel]
- National Labor Relations Board opts to dodge a fight with college football [Daniel Fisher, Forbes]
- Governor’s commission charged with recommending new redistricting system in Maryland includes possibly recognizable name [Washington Post, Southern Maryland Newspapers; thanks to Jen Fifield for nice profile at Frederick News-Post]
- Trial bar’s assault on arbitration falls short: California Supreme Court won’t overturn auto dealers’ standard arbitration clause [Cal Biz Lit]
- Ontario lawyer on trial after prosecutors say sting operation revealed willingness to draft false refugee application [Windsor Star, more]
- “Vaping shops say FDA regulation could put them out of business” [L.A. Times, The Hill] Meanwhile: “e-cigarettes safer than smoking, says Public Health England” [Guardian]
- I was honored to be a panelist last month in NYC at the 15th annual Michael R. Diehl Civil Rights Forum, sponsored by the law firm of Fried, Frank, alongside Prof. Marci Hamilton (Cardozo) and Rose Saxe (ACLU) discussing the intersection of religious accommodation and gay rights [Fried, Frank] Also related to that very current topic, the Southern California Law Review has a symposium on “Religious Accommodation in the Age of Civil Rights” [Paul Horwitz, PrawfsBlawg]
By cutting off contractual freedom for pre-dispute arbitration agreements in the workplace, trial lawyers and unions in California intend to pave the way for more and bigger class actions [Dave Roberts, Fox and Hounds] More: Coyote (“Here is how you should think about this proposed law: Attorneys are the taxi cartels, and arbitration is Uber. And the incumbents want their competitor banned.”)
Update: Gov. Jerry Brown vetoes the anti-arbitration bill.
- NLRB to brass: please don’t sell workplace data to telemarketers or use it to “harass” or “rob” employees [Joe Perticone, IJ Review]
- “Direct evidence must … wait for it … exist to matter in a discrimination case” [Jon Hyman on Butler v. Lubrizol, Ohio Court of Appeals]
- “Cries of ‘blacklisting’ as administration cracks down on contractors” [Lydia Wheeler/The Hill, Connor Wolf/Daily Caller, Public Citizen (supportive; proposals also attack pre-dispute arbitration), earlier here and here]
- Fast food: “The fix is in on Cuomo’s wage-fixing panel” [Ashley Pratte, Washington Examiner; Diana Furchtgott-Roth, Economics 21]
- Another perspective on working in a nail salon [Tyler Cowen, earlier pushback on New York Times investigation]
- Annals of “wage theft”: hired Ferguson protesters say they’ve been stiffed out of pay promised by ACORN successor [American Thinker]
- “Can [an Employer] Lawfully Prohibit Secret Recordings in the Workplace?” [Jarad Lucan, Connecticut School Law]
- Cato Book Forum tomorrow (Wednesday, May 13): Paul Mahoney, “Wasting a Crisis: Why Securities Regulation Fails” [register or watch online]
- “When The SEC Pays Your Lawyer For Informing On You, Is That A Good Thing?” [Daniel Fisher]
- “Unfortunately for the CFPB’s ideological imperative, Ballard Spahr concludes otherwise: ‘In fact, the study confirms that arbitration does benefit consumers.'” [Kevin Funnell]
- Which “established members of the business establishment” brought the AIG prosecution to Eliot Spitzer’s desk, and from what motives? [Ira Stoll]
- Dodd-Frank “say on pay” failed to slow rise in CEO compensation, and it would help to understand why [Marc Hodak vs. James Surowiecki]
- “One-Third of Americans Living Abroad Have Thought Actively About Renouncing Citizenship Due to Tax-Filing Requirements” [Matt Welch, followup, earlier on FATCA] Rand Paul bill would repeal the law, and there’s also a constitutional challenge in the works [TaxProf]
- “What’s the point of the implied covenant of good faith? Other than generating fees for lawyers?” [Prof. Bainbridge]