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Worth the Paper it's Written On? SCOTUS' Rent-A-Center West Decision

Asher Hawkins over at Forbes On the Docket legal blog foresees trouble for class action plaintiffs in the Supreme Court's Latest Arbitration-Friendly Ruling.  As Hawkins explains:

A minor Supreme Court victory this morning in an employment-related arbitration case has left the pro-arbitration camp hopeful that the justices will see things their way in a hotly anticipated consumer-related legal battle the court will hear next term.

This morning's ruling in Rent-A-Center West Inc. v. Jackson saw the court's conservative wing rule in favor of Rent-A-Center's push to have an arbitrator, and not a court, rule on the enforceability of an arbitration agreement between the company and an employee who'd filed an employment discrimination suit. In so holding, the five-justice majority reinstated a ruling from a Nevada federal court judge that had been reversed by the U.S. Court of Appeals for the Ninth Circuit.

Continue reading the Forbes' post here.

Hawkins and Rent-A-Center's attorney Carter Phillips of Sidley Austin may be reading the tea leaves correctly, but the Court's hyper-technical decision-dodging suggests the absence of a plurality on the real issue presented - whether the Court or the arbitrator should be making the decision whether the arbitration agreement is unconscionable or not.

The Supremes avoided deciding the unconscionability question entirely by focusing on an unbelievably picky procedural issue.  The Plaintiff, noted the Court, challenged the enforceability of the entire agreement rather than the "delegation" clause giving the arbitrator the right to decide arbitrability. Citing authority entitling the Court to avoid addressing the enforceability of a single clause if the party opposing arbitration argues that the entire agreement is unenforceable, the Court did just that.  It didn't decide the issue presented to it - who decides unconscionability.

One assumes the Court would not have granted cert if it was going to waste everyone's time and effort by penning a decision whose only precedent is this - we can avoid deciding the central issue in a case if the Appellant hasn't raised the problem in the right way. 

Really!  This is either the kind of nit-picking that gives American justice a bad name or suggests that the Court is presently unable to gather enough "yea" or "nay" votes to decide the thing.  Whether that's good news for conservative court watchers or not will be revealed when the Court hears - and hopefully decides - AT&T Mobility Inc. v. Concepcion which "raises the question whether state courts can strike down arbitration agreements that don't let disgruntled consumers join together in class action lawsuits."

Until that time, everyone on both sides of the issue should be holding their breath.

Here's a more alarmist view of the case from Balkinization - a respected source.  Excerpt below.  Full analysis at link.

The Court’s holding turns on its head our constitutional tradition of access to the courts, and effectively relegates hard-working Americans like Antonio Jackson to arbitration proceedings that, all too often, are structurally biased to favor large corporations. The problem here was not the law – as Justice Stevens showed in another powerful dissent, nothing in the Federal Arbitration Act, its history, or the Court’s precedents, remotely compelled this result – it was the five conservative Justices in the majority. In fact, the Justices had already recognized that a plaintiff was entitled to bring suit in federal court notwithstanding an arbitration agreement if he or she had been forced to go to arbitration as part of an unconscionable bargain. Justice Scalia’s opinion in Rent-a-Center changed the rules to make it much harder for Americans subject to an arbitration agreement to make this showing. With millions of Americans forced to arbitrate their claims – whether by their employers, cell phone or credit card companies – it is hard to miss the obvious fact that shutting the courthouse doors to plaintiffs like Antonio Jackson will have a lasting effect on access to justice for men and women across the country.

Comments (1)

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