Your Seventh Amendment Rights Are Under Attack: What Are You Going to do About it?

October 12, 2011

The Seventh Amendment provides that, in suits at common law, “the right of trial by jury shall be preserved.”  And yet, we live in a world where we are bound – whether we know we are or not — to standard form contracts that give away the right to a trial by jury if we want to join a gym, use a cell phone, make an online purchase, or enter into just about any consumer transaction imaginable.  The United States Supreme Court, which is supposed to interpret and protect our Constitution, has inexplicably decided that more deference must be given to the Federal Arbitration Act than to our basic constitutional rights.  It behooves all of us to ask: Why?

As Gary M. Paul, president of the American Association for Justice (AAJ) recently pointed out in the October 11 issue of Trial magazine, imagine how the American people would react if their other constitutional rights were trampled in this manner.  What if you had to run something by an arbitrator before exercising your right to free speech?  What if the Supreme Court told you that, by signing a contract for cable TV service with pages and pages of fine print, you had somehow given up the right not to incriminate yourself?  What if a hidden clause in an apartment rental contract took away a resident’s  Second Amendment right to own a gun?   Imagine the uproar.  Do you think most Americans would voluntarily give up these rights so easily?

At Wexler Wallace LLP, we believe in the right to a trial by jury guaranteed by the Seventh Amendment.  This week (Thursday, October 13 at 2 p.m.), the Senate Judiciary Committee will hold a hearing on the Arbitration Fairness Act, where experts in the area of consumer arbitration agreements, including Paul Bland of Public Justice, will urge your representatives in Washington to step forward to protect your rights as consumers.

What can you do?  Here at Wexler Wallace, we contacted our senators and other members of the Judiciary Committee to let them know that our constitutional rights matter.  You should too.

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Dear Senator Durbin:

The Supreme Court has interpreted the Federal Arbitration Act as trumping the Seventh Amendment constitutional right to a trial by jury. It also has held that bans on class actions in arbitration are perfectly fine, because of the false premise that consumers actually agree to arbitration clauses containing class action bans when they engage in normal consumer transactions, like signing up for cable television, buying a cell phone, or buying other consumer products. You know as well as I do that (1) 99% of the populace has no idea that by accepting service they are agreeing to arbitration if there is a dispute and that a class action is unavailable to them, meaning they have no recourse for being defrauded or the victim of negligence; (2) the Federal Arbitration Act is directed to sophisticated people and businesses engaged in negotiations over complex transactions; and (3) permitting businesses to impose arbitration agreements is giving them a license to steal.  If you want to be known as truly standing up for people, you will attend the Senate Judiciary Committee’s hearing on the Arbitration Fairness Act on Thursday, October 13 at 2 p.m., listen to the testimony from people trying to preserve the Constitution and access to the courts, and vote to amend the Federal Arbitration Act to make it clear that one-sided agreements are not agreements at all, and that consumers have the right to trial by jury and to participate in class actions to vindicate their rights. The Supreme Court says it doesn’t matter if people with small claims never have redress. I think it does, and if you want my vote and support, you will make an effort to resolve this issue so that the masses, including me and you, are protected.

 Thank you.

 Ken Wexler 

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 Dear Senator Durbin,

As a young class action attorney in Illinois, I have witnessed the good work that can be done when ordinary citizens band together to seek justice.  Unfortunately, we live in a time where fear, rather than a sense of justice, seems to drive most political decisions.  As a country we have been told that everyday consumers no longer deserve their day in court, that large corporations can nickel and dime us to death and never be held accountable.  The legal fiction that consumer arbitration agreements are entered into voluntarily is one that should not be supported by those we elect to serve our best interests.

It comes down to this.  The American people are cynical.  They are cynical about business and cynical about politics.  Only by exposing and remedying the many small injustices we face everyday can people regain the hope and energy to fight the big injustices that leave so many paralyzed with inaction.

I urge you to attend the Senate Judiciary Committee’s hearing on the Arbitration Fairness Act next Thursday, October 13 at 2 p.m. and hear what Paul Bland, a tireless advocate for American consumers, Minnesota AG Lori Swanson, who exposed one of the most corrupt consumer arbitration forums in the country, and Dr. Deborah Pierce have to say. They speak for me and for the unnamed thousands my colleagues and I seek to represent every day.

-Dawn M. Goulet

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 Dear Senator Durbin,

 Your history as a supporter of consumers’ rights, and your efforts to prevent large corporations from denying consumers the ability to receive a fair shake in our legal system is not lost on this constituent.  I’m well aware of your efforts to derail prior attacks by the business community on the American consumer’s ability to hold corporate wrongdoers accountable.  I have not forgotten that you were one of the few who stood up to the efforts of special interests to weaken the most effective weapon in the consumer arsenal (class actions) through the Class Action Fairness Act (“CAFA”) (which you aptly called the “Class Action Moratorium Act”).  Unfortunately, you lost that battle, CAFA passed, and consumers are now required to bring most class actions in federal court, where large corporations believe they have the advantage.  But I hope your fight is not over.

As you’re aware, corporate interests have not rested on their laurels.  The most recent attack on consumers’ rights is found in the enforcement of mandatory arbitration clauses.   These non-negotiated mandatory arbitration clauses, buried in consumer contracts, strip consumers of the ability to hold corporations accountable for acts that do not just impact the individual consumer, but impact all consumers.  As such, they prevent the legal system from ever reaching the heart of the problem – and they prevent consumers from being able to rectify a common injustice.  If corporations are able to force consumers into arbitrating claims on an individual basis, and then simply pay de minimis amounts to the few consumers who are willing to endure the process, there is no reason for a corporation to change its underlying conduct.  Indeed, breaking the law, and ripping off consumers, then becomes a viable business model.

I ask that you attend – on behalf of American consumers – the Senate Judiciary Committee’s hearing on the Arbitration Fairness Act next Thursday, October 13 at 2 p.m.  I urge you to listen to the arguments made by the Democratic witnesses, and decide for yourself where the interests of the American people rest on this issue.  I am confident that you will once again rise to the challenge, and will rally to protect the American consumers’ ability to bring to task those who would seek to render them powerless.  I can only hope that, this time, you are successful in convincing enough of your peers that it is time say enough is enough.

– Mark R. Miller

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 Dear Senator Durbin:

During the recent Occupy Wall Street movement that is quickly gaining momentum, we’ve heard complaints voiced from hard working Americans across the country who are tired of corporate greed.  As a class action attorney, I sympathize with them because I’ve seen outrageous examples of corporations behaving very badly in my practice. At the same time, I’ve wondered what exactly can be done to reign in corporate misconduct when it is so pervasive.  How exactly does one stop widespread corruption, greed, and unscrupulous business practices when the corporations that commit them are powerful, wealthy, and backed by powerful special interests?   That’s a tough question to answer.

But there is one unscrupulous business practice that can easily be stopped: the enforcement of mandatory arbitration clauses.   These non-negotiated clauses, buried in consumer contracts, strip consumers’ ability to vindicate their rights against these powerful corporations in court, and often prohibit class actions.   By simply slipping non-negotiated mandatory arbitration clauses into the fine print, corporations know that they are free to commit consumer fraud, unfair and deceptive business practices, breach of contract, and other unacceptable practices.  They know this because that arbitration clause requires their customers to arbitrate their claims – often on an individual basis – in a forum without judicial oversight or the benefit of federal or state rules of civil procedure or evidence.  They can’t rely on a class action attorneys willing to fight to vindicate their rights.  They can’t rely on a judge or jury to scold the corporation for knowingly fleecing its customers and to award commensurate damages.

What’s in it for the corporations?  Well that’s easy.  They get to be greedy.  They are rewarded for engaging in unfair practices which increase their profits by engaging in unscrupulous business practices while avoiding large judgments that hold them accountable.  They get to continue behaving badly, all the while avoiding the publicity that often comes with a class action lawsuit exposing their deeds.

I ask that you attend  the Senate Judiciary Committee’s hearing on the Arbitration Fairness Act on Thursday, October 13 at 2 p.m.  I ask that you listen to the arguments made by the Democratic witnesses.  I ask that you listen to those marching and protesting across America and help give them some comfort that their words, frustration, and message is being heard. Most importantly, I ask that you act, and encourage your colleagues to act, to protect America’s consumers.


– Amber Nesbitt Wood

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We encourage you to contact your senators a well.  For a list of Committee members, see here.

For the testimony of Dr. Deborah Pierce, speaking against mandatory arbitration, please click here. For the testimony of University of Kansas Law Professor Chris Drahozal, speaking in favor of arbitration, please click here. For the testimony of Paul Bland, Senior attorney at Public Justice, speaking against mandatory arbitration, please click here.

If you would like to read more about the AAJ, visit its website.

If you would like to learn more about the important work Public Justice is doing to protect your Seventh Amendment rights, click here.

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