The Ninth Circuit, bound by California Supreme Court precedent, struck down a class-action waiver in an arbitration clause in a Cingular cell-phone contract. As I note to Business Week, forcing consumers to keep legal rights that they may not want ex ante raises prices: better to permit consumers and businesses the choice of how best to arrange their business affairs through freedom of contract. This is largely unpopular with the 17 commenters to the article.
Business Week on arbitration clauses
The Ninth Circuit, bound by California Supreme Court precedent, struck down a class-action waiver in an arbitration clause in a Cingular cell-phone contract. As I note to Business Week, forcing consumers to keep legal rights that they may not want ex ante raises prices: better to permit consumers and businesses the choice of how best […]
3 Comments
How did your last negotiation over a cell phone contract go, Ted? Okay, a facetious question; I infer that you don’t accept the concept of contracts of adhesion. But do you take the position that there are no policies that a state may consider to be of sufficient importance that they may not be waived ex ante in any contracting context, much less a consumer context?
I’m back w/another layman’s dumb q. Here it is: how can the 9th circuit be “bound” by California Supreme Court precedent? Isn’t the 9th a higher court?
2nd q: what if the contracts instead specified that the plaintiff’s lawyer must be paid hourly at a rate equal to the average hourly rate of lawyers in the US? But not a percentage of the recovery, of course.
ras:
Federal courts are often required to follow the substantive law of the state in which the suit originated.
It’s not a matter of the 9th Circuit being a “higher” court than the California Supreme Court. It’s more of a matter of the federal court following the law of the jurisdiction where the harm occurred.
As to your second question, I’m not quite sure what you’re getting at.