Should Arbitration Company Advise Corporations on how to Avoid Lawsuits?

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Should the largest arbitration company in U.S. be offering advice to corporations on how best to limit their liability? What about providing advice how to limit their liability? Avoiding a class action? Of course not. But that's what appears to be happening. Read on...

The below blog post was originally published over at Public Justice, and it's republished here with permission from the author.

Dear Corporations - Learn how to protect yourselves from class actions!
Sincerely, the AAA

by Paul Bland, Senior Attorney

I want to talk about judges, arbitrators and neutrality.

Imagine a federal district court sending a mass e-mail to a whole bunch of plaintiffs' lawyers. The e-mail says the court will hold a webinar instructing plaintiffs' attorneys on how they could bring more class actions.

Some politicians would surely demand the impeachment of the judges on that court. I'm guessing it would be called an outrage on the op/ed page of the Wall Street Journal, and the tort reform community would label the district a "hell hole." In the words of Willow from "Buffy the Vampire Slayer," it would become "a whole big thing."

Why am I posing such a ridiculous hypothetical?

With the Supreme Court issuing a series of decisions that require the enforcement of mandatory arbitration clauses, many Americans have lost the ability to go to public courts for a lot of consumer, employment, medical and business-to-business disputes. For many Americans today, arbitration is the only forum available; the jury trial is vanishing in the rear-view mirror.

So shouldn't arbitrators be held to the same standards of neutrality as judges? Of course they should.

Then it's fair to ask whether the American Arbitration Association, the largest arbitration provider in the U.S., is meeting those standards of neutrality. Take a look at this e-mail from the AAA advertising a "Live Webinar" for tomorrow, March 13, 2013.

Putting aside the fact that the Concepcions were two human beings (as opposed to the Citizens United concept of corporations as human beings), rather than a Limited Liability Corporation, it is the content of the advertisement -- here's the full text -- that raised my eyebrows.

The e-mail promises to address "How the most recent decisions by the U.S. Supreme Court affect a corporation's ability to insulate itself from class action lawsuits." Um, excuse me? Is it really the job of a purported neutral organization pledged to fairly hear disputes between parties without any pre-disposition to advise corporations on their ability to "insulate" themselves from a particular category of lawsuits?

The solicitation for the webinar also explains that the Concepcion case "signals the demise of consumer class actions against any company that has an arbitration clause barring such actions."

Sounds to me like the AAA is telling corporations that if they don't want to be sued, they should just write arbitration clauses into their contracts. Perhaps the AAA hopes that if corporations start adopting arbitration clauses that ban class actions, they'll remember the friendly folks at "AAA University" who explained to them how to insulate themselves from said class actions. This obviously serves AAA's interests: it would bring them and their arbitrators lots of new business. (The AAA itself is a non-profit, but its arbitrators are decidedly NOT; AAA has a number of employees engaged in business development who seek to bring in more clients to pay its arbitrators.)

The way I see it, this is no different from a federal district court offering to advise plaintiffs on how to file and win more class actions. Corporations already have a huge number of well-paid and eager lawyers coaching them about how they can avoid liability. They don't need further help from a group supposedly pledged to neutrality.

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