Collective Preclusion and Inaccessible Arbitration: Data, Non-Disclosure, and Public Knowledge

Abstract

When courts enforce mandates to arbitrate, jurists describe themselves as respecting the individuals’ autonomy to enter into contracts that route claimants to a process that is more user-friendly than adjudication. But those rationales are disjunctive with the practices of providers of goods and services and of employers. These companies neither offer individuals choices about dispute resolution mechanisms nor welcome the exchange of information about experiences with arbitration. Instead, companies impose obligations to arbitrate and set the terms. In addition to the increasingly commonplace bans on joint and collective actions in any forum, many providers and employers also seek to mandate a cone of silence by instructing individuals not to disclose the content of claims, the use of arbitration, or the outcomes. But as we document in this Article, during the last decade, very few individuals filed claims, single-file, in arbitration. Given the success in precluding class actions and the rarity of filings, why are market actors seeking to silence the few who do arbitrate? And are such mandates enforceable by courts? In this Article, we interrupt these silencing provisions through disseminating information about the rules of and use of arbitration. We track efforts to limit information about arbitration, outline the growing body of law on non-disclosure, and analyze the data about consumer use of arbitration. As we recount, some jurists have held non-disclosure obligations unenforceable. Yet many decisions condone their imposition despite the repeat-player advantages that accrue to the clauses’ drafters, who have access to information that one-shot participants do not have. In addition to information about efforts to silence litigants that can be gleaned from the case law, we have also mined materials posted by the American Arbitration Association (AAA), which has complied with state statutes requiring administrators of consumer arbitration to make accessible the number of claims filed and the results. The picture that emerges is that, of the millions of people using services and products, virtually none file individual arbitration claims. Because AT&T succeeded in persuading the U.S. Supreme Court to enforce bans on collective action and require claimants to use the AAA, we researched arbitration filings against AT&T. Between 2009 and 2019, when the AT&T wireless services customer base ranged from 85 to 165 million, about 90 individuals a year filed an arbitration claim. The available data also provide insight into why, given that remarkably low level of claims, providers of services seek to silence the few who are arbitration users. Law firms and other aggregators have begun a market in de facto collective actions by bundling similar claims against individual providers. And, outside of courts and arbitration, collective consumer action can seek remedies by putting information into the public realm that can affect purchasing decisions and press for changes in the behavior of service providers and employers. Episodic filings through bundlers, claims pursued by government regulators when focused on consumer protection, and networking through web posts are important avenues. But the current legal landscape does not provide systematic access for consumers who have been harmed but lack knowledge of their injuries or connections to aggregators. The privatization of process and non-disclosure mandates prevent similarly-situated individuals from learning about the potential to obtain redress and from sharing lawyers. Moreover, the development of law through cases or statutes and public debates about rights and remedies are stymied by information deficits. In short, after decades of conflicts often termed “class action wars,” we are now in the “information wars,” replete with energetic efforts to mandate silence that, we argue, law should rebuff.