What part of the constitution do they say is violated?
Hint: it rhymes with Mupremacy Paws.
It’s unconstitutional BECAUSE it conflicts with federal law. It doesn’t directly violate the Constitution.
There’s a big but here.
The arbitration provision which was the subject of this appeal (ie., AT&T’s) is extremely generous:
[QUOTE=Scallywag]
…the agreement specifies that AT&T must pay all costs for nonfrivolous claims; that arbitration must take place in the county in which the customer is billed; that, for claims of $10,000 or less, the customer may choose whether the arbitration proceeds in person, by telephone, or based only on submissions; that either party may bring a claim in small claims court in lieu of arbitration; and that the arbitrator may award any form of individual relief, including injunctions and presumably punitive damages. The agreement, moreover, denies AT&T any ability to seek reimbursement of its attorney’s fees, and, in the event that a customer receives an arbitration award greater than AT&T’s last written settlement offer, requires AT&T to pay a $7,500 minimum recovery and twice the amount of the claimant’s attorney’s fees.
[/QUOTE]
It’s still a provision in a contract of adhesion, but it’s a provision written in manner which makes it about as equitable to the consumer as it could be.
Most commercial arbitration provisions are not even close to being that generous. Where the customer is required to pay all or part of the cost, or to arbitrate wherever the company likes (generally, wherever it’s domiciled), or to reimburse the company’s attorney fees, individual states (or federal courts) are still free to find that the provisions are unconscionable, which the FAA specifically allows for.
I’m hardly an expert on commercial arbitration provisions, but I would guess that 99% of them are less generous than AT&T’s.
Having said that, I’ve just looked up my cellphone provider’s arbitration clause, and it’s broadly similar (though it’s silent on where arbitration will occur):
No. I’m not wrong.
It amazes me how you have no legal training whatsoever but confidently assert your opinion as though it’s the product of the finest legal education in the country.
You might believe my analysis is the product of a partisan hack, but how do you explain that Richard Parker, not exactly my ideological ally, reaches the same conclusion?
The constitutionality question I disposed of above. In both cases, the issue is the Supremacy Clause (both Richard Parker and I have identified this issue, not to mention both opinions).
And:
Now, about the states challenging federal law.
As I said before, I simply have no idea what point you’re making. Not sure how I could be wrong about that. Sure, states have successfully challenged federal law. They’ve done so by suing, and as you point out, they’ve done so by passing contrary legislation and seeing what sticks.
What of it? How does that fact apply to this situation?
Fair enough. This is a court case regarding an injunction and not the case itself though.
Seems reasonable to me the feds would make the case that the Arizona law is unconstitutional on the face of it because of the Supremacy Clause. Easy to prove as that is rather obvious so the injunction stands till the trial.
To say there is no other constitutional issue with SB1070 however is patently wrong. There are 14th amendment issues (can police solicit proof of citizenship from just anyone they feel like based on a hunch?). Pretty sure the Equal Protection clause applies to all people in the US.
There is also the issue of the Federal government being the one who conducts foreign policy. States cannot enter into treaties for example. Immigration is distinctly in the realm of US foreign policy.
I will say I was led a bit astray by articles like this which talked about SB1070 then went on to talk about an Arizona “anchor baby” law proposed by the same guy who wrote SB1070 and went on to say it violated the 14th Amendment. A more careful reading and I see my error that they were on about two different things.
I’ll be curious to see what the federal government argues when this goes to court.
I think some issues are getting conflated and I sidetracked a bit.
First, Bricker is saying SB1070 and the California law are the same because they both run afoul of the Supremacy Clause.
That much is true.
What is different is SB1070 has been enjoined and the cases so far have been about the injunction. The merits of the case itself have not been argued as regards SB1070. Whether there are other constitutional issues at stake there I think is definitely arguable. We’ll have to see what case they make (although again foreign policy is a constitutionally granted right so the authority to determine immigration policy I think is solidly covered by the constitution).
In this case clearly the court did not deem the Federal Arbitration Act unconstitutional. Indeed I am not sure California was even floating a test case and probably just wrote a law without thinking it ran afoul of federal law (although to be honest I do not know).
I will say I am surprised that citizens have no protection against this. Corporations can now quite easily force arbitration on me when I buy their products if there is a dispute. I suppose you could say I do not have to buy their products but:
A) Do you think there is a company out there who will not make this part of their boilerplate legalese when buying a product such that anyone will have an alternate choice.
and…
B) Bricker may be happy we all need attorneys with us to interpret what we are getting ourselves into every time we buy something but I think it is unreasonable to expect the average person to be able to understand what all the legalese in those agreements are getting them into merely by purchasing something in a store.
I personally cannot think of anything in the constitution that would protect a citizen from that but I think it is a glaring oversight. ALL of us (you two included) are susceptible to this. If some company dorks you over for a hundred dollars, something they are doing to all their customers, you’ll be in the same boat as everyone else and just have to suck it up and smile.
Yes, the Equal Protection Clause applies to all people.
No, there is no showing that the Arizona law violates the Equal Protection Clause.
That appears nowhere in the court’s opinion.
Nor is there is there a Fourteenth Amendment issue with SB1070. Again, you’ll see that the Fourteenth Amendment is not mentioned once in the opinion.
Yes.
But you’re just shooting in the dark here, because there are different kinds of preemption, and I am getting tired of debunking your efforts here. There are different kinds of preemption, and what I gather you’re saying is that even if Congress never passed the Immigration Act, Arizona still couldn’t do what it did.
That’s wrong.
Yes, the attempt to negate the automatic citizenship of anyone born in the US would indeed violate the Fourteenth Amendment.
And correct: that’s not a feature of SB1070.
I’ll bet you a zillion dollars the feds don’t argue either Due Process or Equal Protection in this case.
Those might get used in some future case, where the law as applied is being challenged. Right now, the law is being challenged as facially invalid. It’s not violative of DP or EP on its face.
It beats getting nothing at all, which is the emerging status quo.
Show me an arbitrator that sides with the consumer against a corporation and I’ll show you someone who never misses a Dodgers game.
Thank you for the background.
It seems to me that the question becomes whether the AT&T contract (or adhesion contracts in general) is unconscionable. I’m assuming that the 4 dissenters did so on the grounds that an adhesion contract is de facto unconscionable. Is that an accurate summary of their opinion here? Or did they attack the preemption argument directly (which I would find a bit odd)?
Yes, and although I hate to muddy water which is only now getting clear, I will say that the case for the FAA vs the CA Discover rule being preemption is much clearer than for SB1070 vs the Immigration Act.
The reason is that with California, the two provisions directly contradict one another. Arizona’s law does not contradict the federal law. Where Arizona may well run into problems is “field preemption,” a doctrine that says because Congress legislated in the field, it meant to not only impose its own rule but also prevent any additional rules.
Christ, just stop it!
First: no, part of the analysis for granting the injunction is “ilkelihood of success on the merits.” So the case hasn’t simply been about the injunction.
Second: no question that the feds have authority to determine immigration policy. That’s not remotely disputed by anyone. The question is more complex: does Arizona’s law augment federal law in an accpetable way, or does the fact that Congress legislated in the area automatically close off any related legislation?
That’s fine. Then the remedy is to amend the FAA.
The dissenters held that there was no conflict: California says the clauses are unconscionable, and the FAA permits courts to find that specific clauses are unconscionable. Therefore, no conflict. California’s just doing by rule what they could do in every single case and not raise any eyebrows by doing it.
This goes to what I was trying to get at before about being bound by a contract you did not actually negotiate (rather one you are deemed to have accepted because you bought something with no chance to modify the agreement). I am still trying to zero in on this so not sure how relevant this is but FWIW:
The point here being the court deemed forced arbitration to not be allowable because the purchaser could not have agreed to the terms in an unambiguous way.
I haven’t read the opinion, but I am quite certain no court would find contracts of adhesion, as a genus, per se unconscionable.(And note, of course, contracts don’t come tagged as adhesion contracts or not, that is a finding of fact made ex post by the court/jury/legal commenters.)
C of A’s, while they certainly sound unfair and unpleasant, simply result from the commercial reality that you don’t want to dicker with Best Buy or Sears or Verizon every time you buy a TV or circular saw or want to add a data plan to your phone (as in specifying choice of law clauses, or events of default, or when risk of loss passes, or provisions regarding attorneys’ fees.) And you certainly don’t want everyone ahead of you in line to have that option either.
C of A’s are just a product of the fact that for the most part, you’re perfectly OK with them because you have enough trust in the merchant to provide a good product (or at least have favorable return/refund policies) and the dollar amount on the line is so small that you don’t want to undertake the chore of negotiating a contract. There’s no reason why the law should stand in the way of this very reasonable benign neglect.
Yes, they did.
And that action is entirely consistent with the FAA.
Why?
Because the FAA says arbitration clauses are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”
One ground on which to find a contract doesn’t exist is to find that both parties did not assent to the terms.
So if the court finds as a matter of fact that the parties did not agree to the terms, then there’s no contract.
But in California, the courts could find that both parties DID agree to the terms, and yet still void the arbitration clause.
That’s contrary to the FAA.
Kimmy_Gibbler mentioned the term “Contract of Adhesion” just above (which was what I was looking for all along).
Clearly the SC felt there was a contract here.
I am just confused how in the Netscape case two courts apparently felt no contract existed yet felt one did exist in this case.
I do not know what was signed when the phone was purchased. I will say when I purchased my phone there was no lengthy piece of legalese I had to sign.
Just seems inconsistent is all and I am still befuddled at what a contract of adhesion can obligate me to or how I can be deemed to have “agreed” to the contract. I know store bought software has often had a sticker you have to tear that said I agreed to their EULA. Of course the EULA is inside on the disk I am trying to get at. What if you buy a MP3 player. Opening the box is sufficient to agree to their terms? Terms which are impossible to write down on the box itself?
Understood.
However, this SCOTUS ruling makes it so a company can rip you off in any number of ways and as long as they are relatively small ways make sure you have little recourse because you agreed to their arbitration and you cannot band together with other screwed over customers to leverage your power.
As noted in the dissent what attorney will take a case for $30 in damages (yeah…you could pay one his/her hourly rate…$30 might get you into their office and a cup of coffee)? You are on your own against the corporation. Seems a decidedly imbalanced state of affairs.
I want to say that I really appreciate the tone of this post I’m replying to, immensely.
I know this stuff is on the surface confusing and seemingly contradictory. What often frustrates me with your posts is the absolutely confident assertion that’s just simply factually wrong.
The decision we’re discussing is not a gimme — obviously four members of the Court wanted to go the other way. But their REASONS are important. They didn’t deny the federal preemption issue – they said in this case that California was doing something that the federal law permitted them to do. I don’t agree, but reasonable people can disagree on this point. No reasonable observer can reject this decision on the basis of “federal law” vs. “Constitution.”
Anyway:
The issue they were deciding was if California’s caselaw was preempted by the FAA. That’s all.
In the Netscape case, the court found that the terms of the contract were not communicated to the end user. In this case, the terms were communicated (or at least we assume for the purpose of deciding the ultimate issue that they were). In the Netscape case,if the court had found that the Netscape users had actually read the license terms, in would have gone the other way. Here, the users had notice of the terms, but California’s rule is that the contract was STILL unconscionable. The FAA says no, you can’t make a rule like that.
In a way, yes. Not that it’s an imbalanced state of affairs, but that you agree to take the risk that every now and again you might get chiseled for some picayune sum. Why might a person agree to this? Well, (1) nobody wants a world where every transaction, however routine, however small-time, needs to be negotiated; and (2) in order to get this, Best Buy or Sears or Verizon is going to draft a standard contract and it’s going to be in their favor; and (3) if you don’t like the contract, you can say no and just not buy the item; and (4) sometimes when you force a company to sell on terms they don’t like, they just stop selling. Or things get much more expensive (maybe even more than the $30 you’re occasionally out). Consumer protection laws aren’t magic bullets.
But things aren’t as dire as it may seem. In the first place, even C of A’s have to be limited to the expected subject-matter of the transaction. Best Buy couldn’t sneak in a clause saying it takes ownership of your house, for instance. So there is a legal limit.
In addition, though, there are market limits. Companies that get reputations as cheaters don’t tend to flourish. Consider the pushbacks and hasty retreats associated with some of Facebook’s TOS changes. Or how Apple ended up rebating some of the purchase price of the first iPhone when its price dropped soon after its introduction.
No-haggling car buying is a great example. Consumers felt overwhelmed by having to negotiate with car dealers that a market arose for what is, by and large, cars sold by contracts of adhesion. Another interesting example of this phenomenon can be seen in the difference in market share for contracted cell phone service versus paygo or prepaid cell phone service.
Yes, it is.
But the courts cannot (or should not, anyway) just say, “Hey, I’ll make this balanced.” Because the responsibility for that rests with Congress. They wrote the FAA, and it says that you can’t automatically invalidate contract clauses.
To fix this, Congress needs to act.
You got something. Without the class action you would have got nothing. But in many cases the lawyers make out for millions. That is what should be addressed. Without class action, corporations can fleece their customers with very little fear.
And what do we do when Congress is co-opted by business (as I think one could argue is the case today)? They will have no interest in getting this changed. Vote new people in? See: Co-Opt.
I know you have a preference for the legislature. Personally I believe in the three-branches of government and the check-and-balances the FFs designed into the system.
If the legislative branch cannot to what is needed hopefully one of the others can. In this case it fell to the judicial branch. Problem is if the judicial branch deems itself to only rubber-stamp what the legislative branch does then what happens?
Apparently five justices feel as you do. Four feel as I do. You win this round. I can only hope not much damage is done till, hopefully, we get this changed someday.