Claim-Suppressing Arbitration: The New Rules

Abstract

Binding, pre-dispute imposed on the weaker party in an adhesion contract so-called mandatory arbitration should be recognized for what it truly is: claim-suppressing arbitration. Arguments such processes promote access to dispute resolution have been refuted and should not continue to be made without credible empirical support. Drafters of such clauses are motivated to reduce their liability exposure and, in particular, to eliminate class claims against themselves. Claim-suppressing arbitration, furthermore, violates two fundamental principles of due process: It allows one party to the dispute to make the disputing rules; and it gives the adjudicative role to a decision maker with a financial stake in the outcome of key jurisdictional decisions that is to say, arbitrators have authority to decide their own power to decide the merits, a question in which they have a financial stake. The Supreme Court has facilitated this doctrine through a series of poorly-reasoned and incoherent decisions, in which the Court's liberal wing has been particularly inept at seeing the stakes for consumer and employee plaintiffs. Exploiting Justice Breyer's incoherent line of majority opinions attempting to identify gateway issues, the conservative Court majority has recently insulated all questions of enforceability of clauses from judicial review and is on the verge of allowing corporate defendants to immunize themselves from class actions through use of clauses.