Voice of San Diego Series on Mandatory Arbitration, and a Response to Professor Lobel

by Deepak Gupta

Arbitration-LeadGraphic-scoreboardThe Voice of San Diego has been publishing a muli-part series on mandatory arbitration by reporter Will Carless. The most recent installment explores the war on consumer class actions and the impact of AT&T Mobility v. Concepcion. Previous installments focus on arbitration secrecy, the National Arbitration Forum debacle, and the plight of an individual consumer in the arbitraiton system. You can find the full series here, and hear Carless interviewed in a radio segment as well.

I spent some time talking to Carless for the series, and was impressed by his thoroughness. It's terrific to see a local organization devoting such significant resources to this under-reported story. More generally, the site itself is worth checking out as a great example of the new non-profit model of investigative reporting. 

The Voice has also published a response of sorts by Orly Lobel, a University of San Diego law professor (and former CL&P contributor), who argues that "the advantages of arbitration should not be understated" and suggests that policymakers focus on tinkering with the procedural fairness in the arbitration system itself rather than adopt more systemic reform. Her column deserves a quick response.

The problem with Lobel's argument is that it relies chiefly on comparative studies that ask: How do indivdual consumers who are able to bring claims and complete the arbitration process fare compared to individual consumers who do so in court? But, as several other legal scholars have pointed out, that's the wrong question to ask for purposes of policy reform because it misses the real purpose and effect of mandatory arbitration clauses in mass consumer contracts. Hypothetically, if arbitration clauses wiped out 99% of the claims, would it make sense to focus on putting the 1% that remain under the microsope? As Jean Sternlight of UNLV has recently argued, we should instead be asking "whether consumers' claims are suppressed or eliminated altogether as a result of companies' use of mandatory arbitration clauses." And always worth reading on this general topic is David Schwartz's article, Mandatory Arbitration and Fairness, which lays bare the misuses of empirical research by opponents of arbitration reform. This is not to say that Lobel is a political opponent of the sort that Schwartz's article has in mind; her column seems a bit more fair-minded and circumspect. But to the extent that she contends that comparative studies of individual outcomes can make the case against systemic arbitration reform, she is widely off the mark.

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