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Goodbye Courthouse, Hello Arbitration

Douglas E. Chabot

The right to access to the courts, and to have a jury of one’s peers consider the evidence and assign fault, is central to our American identity. These rights are enshrined in the federal and state constitutions. Further, the jury trial is a public forum where a defendant’s actions are brought to light and the defendant is held accountable not just to the plaintiff, but to the public at large.

These rights, however, are threatened by a succession of U.S. Supreme Court decisions that have broadly interpreted the Federal Arbitration Act’s scope to include personal injury and wrongful death claims. Under the Federal Arbitration Act, 9 U.S.C. § 2, a written agreement to settle any controversy arising out of a contract or transaction is enforceable subject to very limited exceptions.

In Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201 (2012), the United States Supreme Court considered three cases where relatives of patients signed a contract with a nursing home to provide nursing care. As a condition of receiving care, the patient agreed to waive their right to access the courts and accept arbitration instead. When the three nursing home patients suffered personal injuries and died, the relatives claimed that the nursing home was at fault. In response, the nursing home sought to enforce the agreement to arbitrate and deny the patients’ families access to the courts. Amazingly, the U.S. Supreme Court, in a 9-0 decision, found that the waiver was enforceable and the negligence and wrongful death claims must be arbitrated.

The Marmet Health Care Ctr., Inc. v. Brown opinion is but one of several recent Supreme Court rulings expanding the scope of the Federal Arbitration Act into disputes over securities trading, cell-phone billing and credit-card fees. In all cases, the Supreme Court has sided with the party, usually a corporation, in the superior bargaining position, and against the consumer who is faced with a take-it-or-leave-it forced arbitration agreement and a waiver of their right to access the courts in order to receive a good or service.

This trend towards judicial approval of forced arbitration agreements in varied contexts, including personal injury and wrongful death claims, poses a significant threat to the civil justice system because of the Supreme Court’s explicit acceptance of a practice that favors private resolution over a public trial. Arbitrations are normally private, closed-door proceedings before an individual or panel of handpicked attorneys. The court system is not involved and neither is the press. The party with the superior bargaining position, such as the operator of a nursing home, is the party that compels plaintiffs to waive their rights in exchange for a good or service. Defendants greatly benefit from arbitration because it reduces the costs of litigation, eliminates the risks of a jury verdict and avoids the exposure of its malfeasance in open court. If the courts do not reverse this trend, forced arbitration agreements may become the norm in consumer transactions and countless injured parties will have to say goodbye to the courthouse.

For further information about your right to access the courts, please read the following article from the Washington Monthly.