"The Decade Class Actions Were Gutted." by Mark Joseph Stern
The Supreme Court's radically un-conservative "conservative" majority is a major cause of Americans' rising cynicism and distrust in government -- not everyone can recite the cases or describe the legal backflips and somersaults that these justices twist to reach their desired results, but the effect is clear and unmistakable throughout the country: the courts in America are hostile to ordinary Americans and they are peopled by judges who see their job as doing whatever is necessary to close the doors to the courthouse to real people while slavishly serving corporate wrongdoers.
It’s no secret why employers and corporations love arbitration: The process is a raw deal for the little guy. The arbitrators who preside over these cases may not be bound by substantive law, meaning victims can’t get the damages they’d get in actual court. Nor are arbitrators constrained by the procedural safeguards of the judicial system. The company accused of wrongdoing generally gets to choose the venue, which may be far away from the victim’s home. Victims must pay their own way, not just for travel but for legal representation. Arbitration outcomes are frequently confidential, but all available data suggests that victims fare poorly.
Recognizing that the deck is stacked against them, countless victims do not even attempt to arbitrate when they’ve been swindled. This choice, sadly, might be a rational one. Individually, employees’ injuries may not amount to much—a few hundred dollars, say, in a typical case of wage theft, when an employee claims an employer failed to pay them money they were owed. A class-action lawsuit would be the most logical way to recoup that money, in light of how small the individual claims are.Who would spend thousands of dollars in legal fees to recover hundreds of dollars in backpay? And that, of course, is the point. Companies know that if you can’t sue collectively, you probably won’t file claims at all.
The original sin here is a law called the Federal Arbitration Act or, more accurately, the Supreme Court’s misinterpretation of the FAA. Congress initially intended this measure, which was passed in 1925, to help speed up commercial disputes between businesses. Scholars have persuasively demonstrated that the law was never meant to apply to employment or consumer contracts, or to curb states’ ability to regulate these contracts.
But beginning in the 1980s, corporate attorneys began to persuade courts that the law was, in fact, a loaded gun aimed at class-action litigation and access to the courts. A young lawyer named John Roberts spearheaded this effort, so it is no surprise that, as chief justice of the United States, he has helped enshrine this warped conception of the FAA into law. In an early case, 1984’s Southland Corp. v. Keating, the court began to reinvigorate the FAA; it threw out a class-action lawsuit brought by 7-Eleven franchisees against their parent company for fraud, ruling that the FAA supplants state law. The court built upon that flawed decision in 2001’s Circuit City v. Adams, allowing Circuit City to force its workers into arbitration if they tried to sue. . . .