Rep. Johnson re-introduces bill to protect legal rights of consumers

May 7, 2013 Issues: Consumer Protection

Sen. Al Franken introduces Senate companion; Bills would remedy Supreme Court ruling, Restore consumers’ rights to justice through courts

WASHINGTON, D.C. — Today, U.S. Rep. Hank Johnson (D-GA) announced the re-introduction of legislation that would restore consumers’ rights to seek justice through the courts. The Arbitration Fairness Act (H.R. 1844) would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and would allow consumers and workers to choose arbitration after a dispute occurred.

“Forced arbitration clauses undermine our indelible Constitutional right to take our disputes to court,” said Rep. Johnson. “They benefit powerful business interests at the expense of American consumers and workers.  These bills are designed to defend our rights and to re-empower consumers.”

Click image to view floor speech or click HERE.

Sen. Al Franken (D-MN) introduced the companion bill in the Senate.

“Mandatory arbitration can be a huge disadvantage to consumers, often limiting their ability to have any meaningful legal recourse when they are wronged,” Sen. Franken said. “I’ve reintroduced the Arbitration Fairness Act to ensure that consumers maintain their right to their day in court when they are cheated.”

Over the past four years, a narrow majority of the Supreme Court has undermined the rights of consumers. The Court decided in Stolt-Nielsen v. AnimalFeeds International that agreements requiring class arbitration are valid. In 2011, the Court again upheld forced arbitration agreements in AT&T Mobility LLC v. Concepcion.  There, the Court held in a 5-4 decision that arbitration agreements may ban class actions even when this was expressly prohibited by state law. This year, the Court will again address this issue in American Express Company v. Italian Colors Restaurant, where it will decide whether arbitration agreements that ban class actions are valid even where doing so immunizes a business from antitrust liability. 

This series of holdings erodes the rights of consumers and further immunizes corporations from accountability.  The Federal Arbitration Act (FAA) was originally passed to ensure that the courts enforced commercial arbitration agreements between two companies, not between companies and consumers. The Supreme Court’s expanded interpretation of the FAA allows companies to insulate themselves from liability when they defraud a large number of customers of a relatively small amount of money.

What the Arbitration Fairness Act Does:
•             Restores the original intent of the FAA by clarifying the scope of its application.
•             Amends the FAA by adding a new chapter invalidating agreements that require the arbitration of employment, consumer, or civil rights disputes made before the dispute arises.
•             Restores the rights of workers and consumers to seek justice in our courts.
•             Ensures transparency in civil litigation.
•             Protects the integrity of the Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, among others. 

A longtime advocate for consumers and workers in cases of forced arbitration, in 2009 Sen. Franken passed legislation with bipartisan support that restricts funding to defense contractors who commit employees to mandatory binding arbitration in the case of sexual assault and other civil rights violations. Rep. Johnson, a longtime champion of workers and consumer rights, first introduced the Arbitration Fairness Act in 2007.

Supporting Organizations: 9to5, Alliance for Justice, American Association for Justice, American Civil Liberties Union, Americans for Financial Reform, Citizen Works, Consumer Action, Consumers for Auto Reliability and Safety, Consumer Federation of America, Consumer Watchdog, Consumers Union, DC Consumer Rights Coalition, Empire Justice Center, Homeowners Against Deficient Dwellings, Home Owners for Better Building, NAACP, National Association of Consumer Advocates, National Consumer Law Center, The National Consumer Voice for Quality Long-Term Care, National Consumers League, National Fair Housing Alliance,  National Employment Law Project, National Employment Lawyers Association, New Jersey Citizen Action, Public Citizen, Union Plus, U.S. Public Interest Research Group, West Virginia Association for Justice, West Virginia Citizen Action Group, Woodstock Institute.