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Public Citizen and Arbitration

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Lawsuit abuse kills puppies

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Blogger Rogier van Bakel is furious (via Balko (h/t Slim)) at his local SPCA because they would rather put a dog to sleep than place it with his family with small children. See, they're worried about getting sued if the dog bites one of the children. van Bakel can't believe it: he's even willing to sign a waiver!

His anger is misdirected. The SPCA didn't kill his dog; trial lawyers did. Courts' failure to recognize the right of parties to contract out of excessive liability means that the SPCA has to protect itself against attorneys, and can only do so if they avoid situations where they might be sued. With 20/20 hindsight, the would-be John Edwards will say to a jury: "The SPCA has placed other dogs that bit small children and has been sued for it, yet they continue to place dogs with small children!", and demand punitive damages. Between judges who won't recognize the right of contract when it interferes with a lawyer's paycheck, and legislative efforts to prevent parties from agreeing to contract out of the high costs of the liability system, von Bakel cannot distinguish himself from the families who would blame the SPCA if a dog-attack occurs. The offer of a waiver does not help: the SPCA can't afford to take the risk that an adoptive family will renege on its agreement not to sue if the dog attacks a child.

Now, perhaps we as a society do not want shelters to place animals in homes with small children. Or perhaps we do. But shouldn't that be a decision that rests with a legislature, rather than random chance and a jury? But when a jury has the power to exact uncapped damages, an SPCA has to anticipate the regulation through litigation.

van Bakel and Balko direct readers to other organizations that have not yet been saddled with a lawsuit demanding such practices, but they will surely follow in the SPCA's footsteps when the lawyers get a hold of them. The long-term solution is to insist on elected officials who will appoint judges who respect freedom of contract, and who will pass tort reform measures that put common-sense limits on the power of courts to interfere with every-day activity. Even now in Congress is debating S. 1782, which would put further limits on the power of consumers to opt out of expensive litigation, and receive the benefits of lower costs and increased choice; while President Bush will veto such legislation, an Obama administration with a Democratic Congress would surely vote it into law.

For more on the Congressional and trial-lawyer campaign to reduce consumer choice, see the Overlawyered arbitration section.

Apologies to Mr. van Bakel for the misspelling of his name in the original version of the post.

Stephanie Mencimer: "That's when the surprise came: Baptist Health argued that Luke had given up her right to sue back in 1997 when the hospital presented the arbitration agreement—even though she'd refused to sign. Simply by continuing to show up for work, Baptist's lawyers said, she'd agreed to the terms. Acting contrary to established contract law, which requires both parties to consent to a contract before it becomes binding, a federal judge accepted the hospital's argument." Shocking, huh? But not true. Mencimer gets both the facts and the law wrong:

  • Baptist Health's argument didn't come out of nowhere: it was expressly told to Luke at the time that "the program is binding on all employees" and her decision to "continue her current employment, after receiving notice of this Program, will mean that you have agreed to and are bound by the terms of this Program."
  • Luke agreed in court that she had notice of the program, that she understood the program, and that she continued working at the hospital.
  • The court thus found that Luke consented to the agreement; in doing so, it didn't act "contrary to established law" at all; several Alabama Supreme Court opinions recognized that continued employment is sufficient consideration to support an arbitration agreement, and that agreeing to remain employed by an employer with a mandatory arbitration program is conclusive evidence of assent. (Of course, under Erie, federal courts are bound by state supreme court interpretations of state law.)
  • The district court's opinion was affirmed per curiam by a three-judge panel of the Eleventh Circuit that included two Clinton appointees and a Carter/GHW Bush appointee.
  • And, oh, by the way, Luke began arbitrating her case before the court even ruled, showing that she understood where the law actually was, though now she claims otherwise.
Luke, having received the benefit of an employment agreement that was able to offer her higher wages because of her agreement to arbitrate employment disputes, sought to rewrite the contract after already taking advantage of it. (Update: a commenter ironically signing him- or herself as the Multistate Bar Exam has a nice cite to the Restatement.)

Arbitration and "coercion"

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Relevant to a recent comment discussion, words of wisdom from Judge Easterbrook in IFC Credit Corp. v. United Business & Indus. Federal Credit Union:

Ever since Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), enforced a forum-selection clause printed in tiny type on the back of a cruise-ship ticket, it has been hard to find decisions holding terms invalid on the ground that something is wrong with non-negotiable terms in form contracts. See also, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32 (1991) (unequal bargaining power does not justify refusal to enforce an arbitration clause in a form contract); Seawright v. American General Financial Services, Inc., 507 F.3d 967 (6th Cir.2007). As long as the market is competitive, sellers must adopt terms that buyers find acceptable; onerous terms just lead to lower prices. See, e.g., Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir.1997); ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir.1996); George L. Priest, A Theory of the Consumer Product Warranty, 90 Yale L.J. 1297 (1981). If buyers prefer juries, then an agreement waiving a jury comes with a lower price to compensate buyers for the loss-though if bench trials reduce the cost of litigation, then sellers may be better off even at the lower price, for they may save more in legal expenses than they forego in receipts from customers.

There is no difference in principle between the content of a seller's form contract and the content of that seller's products. The judiciary does not monitor the content of the products, demanding that a telecom switch provide 50 circuits even though the seller promised (and delivered) 40 circuits. It does not matter that the seller's offer was non-negotiable (if, say, it offered 40-circuit boxes and 100-circuit boxes, but nothing in between); just so with procedural clauses, such as jury waivers. As long as the price is negotiable and the customer may shop elsewhere, consumer protection comes from competition rather than judicial intervention. Making the institution of contract unreliable by trying to adjust matters ex post in favor of the weaker party will just make weaker parties worse off in the long run. Original Great American Chocolate Chip Cookie Co. v. River Valley Cookies, Ltd., 970 F.2d 273, 282 (7th Cir.1992) (“The idea that favoring one side or the other in a class of contract disputes can redistribute wealth is one of the most persistent illusions of judicial power. It comes from failing to consider the full consequences of legal decisions. Courts deciding contract cases cannot durably shift the balance of advantages to the weaker side of the market; they can only make contracts more costly to that side in the future, because [the other side] will demand compensation for bearing onerous terms.”).

Unclear on the concept

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Bizarro-Overlawyered hasn't quite gotten the hang of how to put forward their propaganda campaign to deprive consumers of the choice of arbitrating disputes.

A New Orleans woman, Patricia Dicorte, says she got ripped off by her contractor in May 2007, so she took him to an arbitrator, and in July 2007—a fraction of the time it would take in a civil suit of that magnitude—she had an arbitration ruling in her favor for $219 thousand. Unfortunately for her, she then took it to the cesspool of Orleans Parish Courts for enforcement, and Democratic Judge Yada Magee—a colleague of the cousin of the contractor—violated the Federal Arbitration Act and threw out the arbitrator's ruling. (Dennis Woltering, "Despite arbitrator's ruling woman still fighting contractor", WWL-TV, Feb. 25). This will eventually be reinstated on appeal at some unnecessary expense, but somehow Kia Franklin is advertising this fiasco as an example of problems with arbitration (!), rather than as a problem with the judicial hellhole of New Orleans. (If the judge isn't willing to give a fair ruling for the consumer in something as straightforward and administrative as arbitration judgment enforcement, what makes Franklin think that the consumer would have had a better chance with that judge in a civil trial?)

Judge Magee is best known for railroading negligence findings for 1800 plaintiffs against Dow Chemical in bogus silicone breast implant litigation in 1997, a decision thrown out by a Louisiana appellate court in 2002. Spitzfaden v. Dow Corning Corp., 833 So.2d 512 (La. App. 2002).

Early termination cell phone fees

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Lawyers purporting to act on behalf of Verizon Wireless customers are seeking $1 billion, and an arbitrator says the claim can go forward as a class action. Wait a minute, aren't we always hearing that arbitration is set up so this sort of action would never stand a chance? (Jeffrey Silva, "Verizon Wireless faces class action over ETFs", RCR Wireless News, Jan. 28; Jason Mick, DailyTech, Jan. 30).

While trial lawyers attempt to abolish every-day businesspeople's right to arbitrate, they continue to use arbitration with their own clients. The Texas Supreme Court, in a December 14 opinion, recently defended John O'Quinn's right to arbitrate with his clients; the Wolfgang Demino blog has details. (Other clients have had more success against O'Quinn in arbitration.) Note that the Arbitration Fairness Act, the trial bar's effort to deprive consumers of the choice of predispute arbitration clauses, doesn't apply to attorney-client relationships. Earlier.

A commenter complains about our most recent post, and I respond:

Bizarro-Overlawyered, the Huffington Post, Alternet, and others on the Left continue to bang this drum with completely false accounts of the law and facts in their campaign to deprive consumers of the choice of mandatory arbitration: "The notion that sexual assault cannot be tried as a criminal matter but has to be arbitrated in secret arbitration and treated as a labor dispute is simply beyond belief."

Beyond belief indeed. Let's count the lies of commission and omission:

  • Whether a private civil claim against Halliburton or KBR is required to be arbitrated has nothing to do with whether the Department of Justice decides to criminally prosecute for sexual assault. The DOJ can try this as a criminal matter, but have chosen not to. That may be a scandal on its own, but not one having to do with arbitration clauses.
  • The arbitration clause does not prohibit Barker from bringing civil suit against her alleged rapist (and, indeed, her case continues in the proper federal district court venue).
  • The arbitration clause does not require the arbitration to be "secret." (By the way, in December, I wrote to Jamie Leigh Jones's attorney, Todd Kelly, and offered to publicize his arbitration briefs documenting Jones's original summary judgment claims before he tried a second bite at the apple in court. Still no response over six weeks later.) The arbitration is only as secret as the participants want it to be.
  • And, oh, by the way, for all the claims that one can't get justice in arbitration? Today the New York Times reports that two women who claimed sexual assault, Mary Beth Kineston and Pamela Jones, won their arbitration cases against KBR. If they'd brought civil suits, they'd still be litigating. Yet somehow, not once in all the months of controversy on the issue did any news reporter mention this non-trivial fact as the slurs against arbitration were repeated over and over.
Let's not confuse issues. Sexual assault and rape are criminal acts, and should be prosecuted criminally. To the extent KBR was responsible for the very plausible allegations of creating an environment of sexual harassment by its employees and failing to respond to hostile environment claims, they should be civilly liable in the forum contractually agreed to. But either of these issues has nothing to do with the third issue, the availability of mandatory arbitration as an option in contracts.

Earlier: Jamie Leigh Jones (Dec. 12-16), Jamie Leigh Jones (Dec. 20), Jamie Leigh Jones (Dec. 21); see also Overlawyered's arbitration section.

The Civil Justice Association of California says it so well, we might as well just quote them:

“Fee arbitration offers cheaper, faster alternative to litigation.” Where did that headline run? Give up? In the California Bar Journal, the “Official Publication of the State Bar of California! The story beneath it praises fee arbitration between lawyers and clients, saying that arbitrators are reporting that their work “gives people immediate results, unlike protracted litigation.”

The Bar’s presiding arbitrator, Arne Werchick, is quoted as saying: “It’s a neutral program that gives everyone a fair shake.”

We hope Mr. Werchick, who was president of the trial lawyers association in 1980, sends copies of the article to personal injury and other plaintiffs’ lawyers in Sacramento and Washington. They are once again firing up their endless campaign to block people’s constitutional right to contract to settle future disputes by arbitration rather than going to court.

Separately, ABC News parrots the trial-lawyer line with misleading coverage of another arbitration involving Tracy Barker: they falsely report that Barker's lawsuit was "killed" (when it will in fact be heard in the forum that Barker contractually agreed to litigate in), that the proceedings will be "secret" (when Barker has the right to publicize them the same way she can publicize a trial), and waits until deep into the story to acknowledge that the arbitration clause does not prohibit the employee from bringing litigation against her alleged rapist. Where's John Stossel and "Give Me A Break" when you need him?

For more on the litigation lobby's battle against arbitration, see the Overlawyered arbitration section.

In 2006, former West Virginia judge and justice Richard Neely wrote an article called "Arbitration and the Godless Bloodsuckers" (reprinted at the anti-consumer Consumerist) making a sensational claim: he had served as an arbitrator for the National Arbitration Forum, but because of his rulings denying attorneys' fees, had been blacklisted from further arbitration proceedings because the "godless bloodsucker" banks (no, really, those are his words) had decided he was an "unacceptable" arbitrator. As part of the litigation lobby's war on consumer choice in seeking legislation to force consumers to litigate even if they wish the opportunity for lower prices through agreeing to mandatory binding arbitration (see the Overlawyered section on arbitration), the claims have been repeated on multiple occasions, in Congressional testimony, in newspaper and magazine articles, in blogs, and even in the Overlawyered comments. Turns out, according to a response made by the National Arbitration Forum, that Judge Neely has made some claims that weren't true:

  • Contrary to Neely's claims, he was never "struck" from any case by any party.
  • At least under NAF rules, a party cannot unilaterally select an arbitrator: the two sides must agree, or, in the alternative, each select an arbitrator who will in turn mutually agree upon a third arbitrator. (Code of Procedure Rule 21.) Parties can strike an arbitrator for bias—for example, perhaps one of the arbitrators has announced that a class of parties are "godless bloodsuckers." But this right applies equally to consumers and merchants.
  • Neely claimed incorrectly that a party defaulting could be liable for more than they would under the civil justice system. But arbitration participants have more procedural protections in the case of default than those operating in the civil justice system--there is no "default" in arbitration. Rather, the arbitrator has to decide the case on the merits, even without the participation of the customer. Given the fact that the vast majority of debt collections in court are resolved by default, the typical consumer comes out far ahead in arbitration.
  • Neely proposed a reform that arbitrators be required to disclose conflicts of interest. But arbitrators are already required to disclose such conflicts.
Read the whole thing. Neely (who ruled on the merits 100% of the time for banks against their customers in the two debt collection cases he decided) was apparently so upset by his experience that he signed a new agreement with NAF after the events he claims to describe transpired. One wonders: has the plaintiffs' bar retained Neely as a consultant on the issue, and he decided he could make more money bad-mouthing arbitration than as an arbitrator? One will never know—unless Neely discloses his conflicts of interest.

Richard Neely's previous claim to fame was stating, while Chief Justice of the West Virginia Supreme Court, "As long as I am allowed to redistribute wealth from out-of-state companies to in-state plaintiffs, I shall continue to do so." He's had somewhat less success doing so as a plaintiffs' attorney (June 2002).

Stephanie Mencimer jumps on the Jamie Leigh Jones bandwagon against arbitration (Dec. 12, Dec. 20) and carefully makes a misleading case:

Employment lawyer Cathy Ventrell-Monsees testified before Congress in October that AAA data show that between January 2003 and March 31, 2007, of the 39 Halliburton cases that went all the way to a decision, Halliburton won 32, a win rate of 82 percent. Plaintiffs in employment litigation face a high bar in court trials as well, but even so, that figure is very high. Employers win about 64 percent of all employment cases at trial in federal court and about half in state court, according to data from the Justice Department's Bureau of Justice Statistics (BJS).
The problem here is that this is apples and oranges: the 32 arbitration cases include cases that are dismissed on summary judgment, whereas the employment discrimination trials (which constitute well under 10% of all employment discrimination claims brought in court) necessarily omit the decisions where the plaintiffs lost on summary judgment. Moreover, it excludes the 96% of cases submitted to ADR that do not result in a full-fledged arbitration because the employee received a favorable result in mediation. (And that's before we get to the fact that an arbitration decision is final, while the BJS statistics have no follow-up to see what happens on appeal to those larger plaintiff victories.) As multiple studies show, the typical employment plaintiff does far better in arbitration than in court, for far less expense.

Mencimer also repeats the canard that arbitration is problematic because it is "secretive," though her ability to retell the case of Jamie Jones refutes that. I also note that earlier this week, I sent a request to Jones's attorney, Todd Kelly, for a copy of her arbitration filings. (Recall that Jones moved for summary judgment in the arbitration, and only filed in court after helping to choose an arbitrator and spending fifteen months of discovery litigating the arbitration.) He hasn't responded. If Jones's arbitration is secret, it's because she has chosen to make it so.

As I suspected, the Jamie Leigh Jones testimony on the Hill quickly devolved away from the Department of Justice's alleged failures in investigating a rape (the ostensible reason for the hearing) to the completely unrelated issue of her arbitration agreement with KBR and her attempt to conflate KBR with Halliburton, something welcomed by the litigation-lobby blogs that did the same thing. (KBR wasn't invited to send a representative to the hearing.) Jones misrepresented the arbitration as "secret," though the arbitration proceeding is just as public as a court proceeding to the extent either party wishes it to be. To that end, I invite Ms. Jones to send me the summary judgment briefs from her pending arbitration proceeding against KBR that led her attorneys to file a second action in court making new allegations against Halliburton, and I will happily post them and provide free publicity analyzing them. From the KBR briefs:

Jones has admitted that she is a party to an arbitration agreement and has invoked and
benefited from the terms of the DRP by participating in a pending arbitration proceeding
involving the same claims. She made a demand for arbitration more than a year before filing this
lawsuit, participated in the selection of an arbitrator, exchanged discovery and even moved for
summary judgment.
For more on arbitration, see Mark de Bernardo's testimony and Overlawyered's arbitration section.

For example, a study published in the Dispute Resolution Journal compared 125 employment discrimination lawsuits filed in the Southern District of New York, with 186 arbitration claims involving employment disputes in the securities industry. The data showed that employee claimants prevailed 46% of the time in arbitration compared to 34% in federal court. The median monetary award amount was slightly higher in arbitration, and the median time from filing to judgment was 16.5 months in arbitration compared to 25 months in litigation.

Also, a 1998 comparison of arbitration and litigation published in the Columbia Human Rights Law Review noted that
employees prevailed over employers in 63% of employment arbitration cases filed with the American Arbitration Association between 1993 and 1995. To compare, only 14.9% of employees who brought cases to federal district court in 1994 prevailed in their litigation. The average duration of an arbitrated claim was 8.6 months, compared to 2.5 years in litigation.

Source, citing Michael Delikat & Morris M. Kleiner, An Empirical Study of Dispute Resolution Mechanisms: Where Do Plaintiffs Better Vindicate Their Rights?, 58 DISPUTE RESOLUTION JOURNAL 56, 57-58 (2004); and Lewis L. Maltby, Private Justice: Employment Arbitration and Civil Rights, 30 COLUM. HUM. RTS. L. REV. 29, 45-48 (1998).

California data shows that when consumers bring arbitration claims against businesses, the consumers prevail in 65.5% of cases that reach a decision. To compare, buyer plaintiffs litigating contract claims in the 75 largest American counties prevailed 61.5% of the time overall, and 60.9% of the time in cases decided by bench trials. When businesses bring arbitration claims against California consumers, the businesses prevail in 77.7% of cases that reach a decision. To compare, seller plaintiffs litigating contract cases in the largest 75 counties prevail 76.8% of the time overall and 78.9% of the time in cases decided by bench trial.

These results show that the win rates for consumers and businesses bringing claims in arbitration are within just a few percentage points – and, sometimes, just fractions of a percentage point – of the win rates of individuals and businesses bringing contract claims in court.

Source. See also the Ernst and Young study showing consumers doing better in arbitration than in court. More data available at the National Arbitration Forum page.

Update, Dec. 17: The National Arbitration blog has more links, and the blog appears to be chock-full of resources. For other Overlawyered posts on arbitration, see our new arbitration section.

Arbitration and the free market

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Let us imagine a writer for a left-wing magazine, we'll call her Mephanie Stencimer, who wants to buy a car. But she has particular tastes: she doesn't just want any old car. She wants a three-wheeled vehicle, perhaps because the feng shui is better, perhaps because she wants to spend less money on tires forced upon her by Big Rubber. She goes from car-dealer to car-dealer around town, but every single one of the dastardly businessmen insist that her only choice is a four-wheeled vehicle. She patiently explains the aesthetics of the triangular approach, but they shrug their shoulders and tell her it's out of their hands and she has to have a four-wheeled car or nothing. Finally, she surrenders her preference for the three-wheeled vehicle, and takes a model with the extra wheel.

If you were to take seriously the arguments of Stephanie Mencimer at Mother Jones and the commenters there, and perhaps the occasional judge, this is an outrageous "contract of adhesion" that should be outlawed: Stencimer didn't have a choice, didn't have the bargaining power to make the auto-dealer sell her a three-wheeled car, and was forced to buy an extra wheel. But is this really a problematic failure of the market that requires government intervention?

ADR? Them's fightin' words

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The recent controversy over attempts by organized lawyerdom to ban or restrict predispute arbitration contracts led to a Wall Street Journal editorial ("Party at Ralph's", Nov. 7) which in turn drew forth the following letter to the editor from David S. Rowley of San Diego (Nov. 14):

Although you got the lawyer-money connection in the Democratic anti-arbitration strategy exactly right, you skipped over the bodacious arrogance inherent in the phrase "alternative dispute resolution." ADR is lawyer-speak for anything other than a lawsuit, making a lawsuit the "regular" way. ADR gets about the same treatment from the bar as "alternative" medicine gets from doctors.

Every time people sit down and reason together, some lawyer is losing money. Why not ban that? A lawsuit is the most expensive, time-consuming, disruptive and unpredictable of all dispute resolution models. That so many people are so quick to sue suggests that the lawyers have sold the masses on the "regular" way. What a tragic commentary on our times.

Earlier: Oct. 18. More thoughts on arbitration: ADRQueen, Oct. 16.

Last month Public Citizen drew extensive and largely uncritical publicity for a report blasting credit card arbitration. The report's most dramatic number, picked up by many papers, was based on newly available California data: "In a sample of 19,300 cases, arbitrators ruled in favor of consumers 5 percent of the time." (Phuong Cat Le, "Binding arbitration a loser for consumer", Seattle Post-Intelligencer, Sept. 27). Such results, charged a Public Citizen official, show “a stunning bias against consumers”. Kansas City Star consumer columnist Paul Wenske's reaction was typical: "Would you agree to let someone arbitrate your dispute with a credit card company if you knew he or she almost always decided in favor of the company?" ("When you sign up for a credit card, you sign up for arbitration", Oct. 6). It was all a great publicity coup for the litigation lobby, which has been gearing up a campaign to do away with predispute arbitration agreements that divert potentially lucrative disputes away from the lawsuit system.

If, however, you happened to read Bob Ambrogi's Legal Blog Watch entry on the story, you might have noticed the following reader comment:

Bob, I am an arbitrator for NAF [National Arbitration Forum]. My statistics would show that I rule for the Claimant in an extremely high percentage of cases. The statistic is misleading as 95% plus cases are default cases, where the consumer never bothers to answer.

Posted by: legal eagle | Sep 28, 2007 1:19:06 PM

And there you have the little trick behind Public Citizen's sensational assertion that only 5 percent of consumers manage to beat the house. The vast majority of cases that go before the arbitrators are in fact uncontested collections, which present no active dispute to resolve one way or the other. Where there is an active dispute, it is plain that consumers' win rate is very much higher than 5 percent. Why did so many journalists in recent weeks convey the mistaken impression that there's almost no hope of success for the consumer who contests the lender's story at arbitration? Because those journalists were falling into a hole skillfully dug for them by Public Citizen.

Any system of resolving routine consumer collections, including traditional courtroom litigation, is likely to generate a high rate of default judgments or their procedural equivalent. The National Arbitration Forum at its website refers to one pertinent study which it summarizes as follows:

Default Judgments Against Consumers: Has the System Failed? (Sterling & Schrag, 1990; 67 Denv. U. L. Rev. 357, 360-61)

A Georgetown University law professor analyzed a sample of claims filed in 1988 against consumers in the Small Claims and Conciliation Branch of the Superior Court of the District of Columbia. The small claims procedure did not require the consumer to submit a written answer. Instead, the consumer only had to show up in court at the specified time. Nevertheless, according to the study, 74% of the cases resulted in a default judgment. In 22% of the cases, the consumer acceded to full liability. In the remaining 4%, the plaintiff voluntarily dismissed the case. None of the cases resulted in a trial.

Making full allowance for the somewhat different mix of cases in the two instances, one still is left here with an even lower "consumer win rate" than in the California data. And a recent news story from Texas about debt collection by lawsuit includes an allegation that more than 80 percent of consumers fail to contest the matter, resulting in default judgments; if creditors are winning even half of the contested cases, the resulting "consumer win rate" is below 10 percent. (Teresa McUsic, "Unpaid credit-card bills giving rise to lawsuits", Fort Worth Star-Telegram, Aug. 31).

Of course, some of us would suspect that Public Citizen's really major beef with arbitration clauses is not so much with the way they divert the collections process away from the courts, but with a quite different effect they have on litigation: they impede the filing of class actions by the entrepreneurial plaintiff's bar (arbitration clauses typically rule out class treatment of complaints, which means law firms who've signed up one client can't proceed to enroll millions of other cardholders as plaintiffs too without their say-so). But of course the casual newspaper reader is likely to be a good bit more sympathetic to individual consumers supposedly facing a deck stacked 95-to-5 against them than with the business reverses of class action law firms who find themselves no longer able to extract the sorts of fee-driven settlements they once did.

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