Category Archives: Arbitration

When is an arbitration clause less unreadable? When it’s a hash-it-out clause

by Jeff Sovern According to standard readability measures, arbitration clauses require a lot of education to understand. The CFPB arbitration study reported that the average arbitration clause was written at a level that required more than two years of college to grasp. A study that I co-authored found that consumers didn't understand arbitration clauses at […]

Looks like companies don’t like arbitration so much when consumers actually use it

by Jeff Sovern That's the inference to be drawn from a must-read article in the NY Times, ‘Scared to Death’ by Arbitration: Companies Drowning in Their Own System. The article points out that arbitrations are taking longer than billed, and companies are refusing to pay arbitration fees. AN ADDITIONAL NOTE: As Allison noted in an […]

Chanrasekhar & Horton paper examines the source of the repeat player effect in consumer arbitration

Andrea Chandrasekher and David Horton, both of California–Davis, have written Empirically Investigating the Source of the Repeat Player Effect in Consumer Arbitration. Here's the abstract: Policymakers, courts, and scholars have long been interested in whether repeat players enjoy an advantage in forced arbitration. Sophisticated empirical studies of consumer and employment awards reveal that there is indeed […]

Frankel Article: Corporate Hostility to Arbitration

Richard Frankel of Drexel has written Corporate Hostility to Arbitration, 50 Seton Hall Law Review (forthcoming 2020). Here is the abstract: In the last 30 years, corporations have aggressively and successfully pushed the Supreme Court to invalidate virtually all state regulation of mandatory arbitration clauses on the ground that the Federal Arbitration Act (FAA) preempts any […]

Imre Szalai Study Finds 78 Fortune 100 Companies Use Class Action Waivers in Consumer Agreements

Imre S. Szalai of Loyola of New Orleans has written The Prevalence of Consumer Arbitration Agreements by America’s Top Companies, 52 U.C. Davis L. Rev. Online 233 (2019). Here is the abstract:  This article present the results of a study that examines the use of arbitration agreements by the top 100 Fortune Magazine-ranked largest domestic […]

Chandrasekher & Horton Article Proposes Solution to Arbitration Problem: Arbitration Multiplier

Andrea Chandrasekher and David Horton, both of California, Davis, have written Arbitration Nation: Data from Four Providers, 109 California Law Review. Here's the abstract: Forced arbitration has long been controversial. In the 1980s, the Supreme Court expanded the Federal Arbitration Act (FAA), sparking debate about whether private dispute resolution is an elegant alternative to litigation or a rigged […]

Fitbit Lawyer Admits Admits No Rational Consumer Would Arbitrate $162 Claim

by Jeff Sovern So Allison Frankel reports for Reuters in a story headlined Fitbit lawyers reveal ‘ugly truth’ about arbitration, judge threatens contempt. Here are the first three paragraphs: At a hearing Thursday in San Francisco federal court, a lawyer for the fitness tracking company Fitbit told U.S. District Judge James Donato that no rational customer would arbitrate a $162 […]

Noll Article: Public Litigation, Private Arbitration

David L. Noll of Rutgers has written Public Litigation, Private Arbitration? 18 Nev. L.J. 477 (2018).  Here is the abstract: How should legal disputes be allocated between litigation and arbitration? Given strong incentives for many actors to arbitrate everything, the question turns fundamentally on the scope of arbitration under the applicable law. In "Re-Inventing Arbitration: How Expanding the […]

Industry Lawyer Concedes Arbitration Clauses Suppress Claims and Reduce Payments to Consumers

by Jeff Sovern Industry lawyer Thomas B. Hudson of Hudson Cook has authored Arbitration Agreements: Not Always Good All the Time for AutoDealer Today, in which he writes: An arbitration agreement is the dealer’s first and best line of defense against class-action lawsuits. If you think that isn’t reason enough, have a word with the many […]

Tinder’s Diabolical RETROACTIVE Arbitration Clause

by Jeff Sovern One of my students told me about Tinder's new retroactive arbitration clause which, of course, includes a class action waiver. As with many such contracts, consumers accept it by using the service, regardless of whether they have read it or not–and we know few consumers actually read such things.  The arbitration clause, […]