A Stinging Dissent on Arbitration

In an otherwise unremarkable case involving a homeowner's personal injury dispute, a Florida appeals court judge recently issued a remarkable dissent on the evils of mandatory binding arbitration. It opens with a somewhat sarcastic how-to guide for home manufacturers who want to deprive consumers of their judicial remedies and then launches into a critique of the state of the law. Here's an excerpt:

What we have begun to see is that virtually all consumer transactions, no matter the size or type, now contain an arbitration clause. And with every reinforcing decision, these clauses become ever more brazenly loaded to the detriment of the consumer -- who gets to be the arbitrator; when, where, how much it costs; what claims are excluded; what damages are excluded; what statutory remedies are excluded; what discovery is allowed; what notice provisions are required; what shortened statutes of limitation apply; what prerequisites even to the right to arbitrate are thrown up -- not to mention the fairness or accuracy of the decision itself. The drafters have every incentive to load these arbitration clauses with such onerous provisions in favor of the seller because the worst that ever happens, if the consumer has the resources to go to court, is that the offending provisions are severed. The state courts, demoralized by the United States Supreme Court's disapproval, have too often allowed these overreaching provisions to succeed. Most consumers can't read them, won't read them, don't understand them, don't understand their implication and can't afford counsel to help them out.

It is the role of the state courts to determine whether an arbitration provision is unconscionable and it is time that we take that responsibility seriously.

This dissent doesn't say anything that hasn't been said many times before, but it does say it forcefully--and at a time when Congress is beginning to take notice. Ultimately, the question isn't whether state courts take their role seriously, but whether federal law should stand in the way, and only Congress can decide that question. (Thanks to Paul Bland for the tip.)