Trial Magazine

When I think of the progress AAJ has achieved in its fight to end forced arbitration, I imagine a pebble thrown into the middle of a lake and thousands of ripples expanding outward.

Forced arbitration is one of many items on the ever-growing list of issues that AAJ tackles to help our clients, with the goal of preserving the fundamental right to trial by jury. AAJ is highlighting the effects of forced arbitration and its efforts to end this secretive practice in this month’s issue of Trial.

The ripples against forced arbitration have churned up waves that are crashing down on this insidious practice used by nearly every industry. Forced arbitration is everywhere, and yet consumers have no idea they are signing away their ­Seventh Amendment rights.

Messaging and stories. These clauses weren’t always called “forced arbitration.” AAJ, together with our partners in the consumer and civil rights communities, led the effort to stop calling it “binding mandatory arbitration” and start describing and exposing it for what it truly is: secretive, buried in the fine print, and forced.

Thank you to the trial lawyers who shared their clients’ stories with AAJ—about family members who had been injured or died from nursing home neglect or clients who had been ripped off by banks or cell phone companies and were banned from joining as a class to take on the corporations. We have been able to educate lawmakers, policymakers­, and the public.

News outlets noticed. The New York Times published a series starting in November 2015 that led to more than one dozen articles about forced arbitration throughout 2016. Radio stories aired and op-eds were published across the country. Little by little, we systematically chipped away at forced arbitration, and we will continue to do so.

Defending our progress. In 2017, AAJ will work to protect the progress we have made. Priorities will include defending the rule that the Centers for Medicare and Medicaid Services (CMS) issued banning federally funded nursing homes and long-term care facilities from including pre-dispute arbitration clauses in their admission contracts.

The nursing home industry filed suit to challenge it, and the Northern District of Mississippi granted a preliminary injunction on Nov. 7 to enjoin CMS from enforcing the rule. We anticipate ­additonal proceedings in the near future. You can read more about the CMS rule on p. 27.

We expect a similar response from the financial products and services industry when the Consumer Financial Protection Bureau (CFPB) releases its final rule on the use of forced arbitration in consumer financial services contracts. The CFPB has released its proposed rule and is writing its final rule.

We hope that the final rule will reflect the proposed rule and will include a ban on class action waivers in contracts for financial service providers such as banks and credit card companies.

AAJ has also urged the CFPB to go one step further and write a final rule that will restore the rights of people seeking justice individually, allowing them to choose whether and how to enforce their rights.

When the Times published its forced arbitration series, it included this observa­tion from a federal judge who is a Reagan appointee: “This is among the most ­profound shifts in our legal history. . . . Ominously, business has a good chance of opting out of the legal system altogether and misbehaving without reproach.”

AAJ is advocating to restore corporations’ accountability. Protecting Americans’ fundamental right to trial by jury is hanging in the balance.

Julie Braman Kane is a partner at Colson Hicks Eidson in Coral Gables, Fla. She can be reached at julie.kane@justice.org.