2 posts

Rethinking Judicial Review of Arbitration

By Nico Gurian

Mandatory arbitration is everywhere in the daily life of most Americans — when they sign a cell phone contract, buy a cable subscription, or sign up for a checking account. For most Americans, there is no avenue to acquire these basic goods and services without giving up the right to litigate disputes before a court of law. The increased use of mandatory arbitration clauses is not an accident. Buoyed by the Supreme Court’s expansive interpretation of the Federal Arbitration Act over the last few decades, businesses have used mandatory arbitration clauses to insulate themselves from liability by, for example, including class-action waiver provisions in arbitration agreements that can make it financially impossible for plaintiffs to bring substantive claims.

A key aspect of the current arbitral system is that arbitrators’ decisions are subject to extremely limited judicial review, which is an underlying assumption of both Supreme Court jurisprudence and scholarship in this area. This Note seeks to question that assumption. First, it considers traditional rationales for limited judicial review of arbitral decisions and argues that these justifications fail to take into account the realities of the current arbitral system. Second, borrowing from administrative law, it offers a proposal for how states could tailor a system of increased judicial review of arbitration decisions that would better promote fairness while preserving the positive effects of arbitration.

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A Congressional Edifice: Reexamining the Statutory Landscape of Mandatory Arbitration

By Andrew McWhorter

In the last century arbitration has grown to be a large and important part of the U.S. legal system. However, mandatory arbitration has been used in recent years to bar class action lawsuits and limit the procedural remedies available to certain classes of litigants. At the same time, the routes to challenging the use of mandatory arbitration have been increasingly closed off, with the courts broadly ruling in favor of its use and agency action likely foreclosed in the immediate future. In turn, the debate over mandatory arbitration has calcified, with one side arguing for an almost total ban on mandatory arbitration and the other arguing for few, if any, limits.

Despite these prevailing currents, Congress has enacted a handful of statutes that limit or regulate the use of mandatory arbitration in some way. This Note examines each of these statutes in turn with particular focus on the mechanisms by which they limit mandatory arbitration and the likely interests embodied in their passage. Drawing on the structure of these prior enactments, this Note ultimately argues in favor of a more holistic approach towards mandatory arbitration reform focused on the contexts in which mandatory arbitration is available and the processes applied in those contexts. This compromise position would curb the abuses of mandatory arbitration while retaining its benefits.

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