Congressman Talks Arbitration, Consumer Rights in Keynote Speech

Keynote Speech at National Consumer Law Center Spring Training Event Delivered Remotely
Friday, April 12 at 4 PM at Omni Hotel at Centennial Park

Hello everyone, thank you for having me here this afternoon.

It is my honor to have been invited to deliver the keynote address to this, the Spring Training Event of the National Association of Consumer Advocates, a group that I deeply respect and whose work I greatly admire.

I want to thank you for your tireless efforts protecting the rights and interests of everyday people, workers, and consumers. For decades the pendulum has been stuck on the side of the powerful, the wealthy, and the greedy. So the rich have gotten richer, the middle class has shrunk, the poor are getting poorer, and the courthouse doors have gotten heavier and heavier to open for those seeking to hold the corporate and business interests accountable for the harms they do to the so called little people of our nation.

And I want to thank particularly your Georgia members, who represent consumers when they get mistreated, cheated and/or ripped off by bad actors in the commercial sector. When your members are seeking relief for the consumers they represent, they are more and more met with the barrier posed by forced arbitration clauses imbedded in take it or leave it contracts, or terms of service agreements.

Using consumer protection statutes as the shield to protect your clients, your members empower consumers to stand up for their legal rights despite the deck being stacked against them.

Legislatively nullifying and banning pre-dispute forced arbitration clauses in consumer and employment agreements has been a cause that I took on shortly after being sworn in as a member of Congress, almost 18 years ago. I cant believe that it's been 18 years! It's been a long slog to make change, but we have seen the Forced Arbitration Injustice Repeal Act pass out of the House and on to the Senate the past 2 sessions of Congress. There is still much work to be done to get the FAIR Act passed in the House AND Senate, then signed into law by the President, The task is daunting, but we are making progress and as long as I am a member of Congress I will never give up on passing the FAIR Act into law.

I hung a shingle and practiced law for 27 years before being elected to Congress. During those 27 years I also served for 12 years as a Magistrate Court Judge presiding over small claims court cases, among other responsibilities. During all those years, handling so many cases-only once did I encounter the barrier of forced arbitration. It was about three months before I shut the doors to my law practice at the end of 2006. A friend brought in a case against her seeking the confirmation of an arbitration award in a debt collection case. One of my last acts as an attorney was to work out a payment plan after having determined that my client was bound to the arbitration award due to the consumer agreement that she had signed.

The next time I encountered forced arbitration was a year or two later, when my wife and I were thinking about downsizing and we were looking at building a townhome. In reviewing the documents I came across a clause that required us to waive our rights to file a lawsuit in court in the event of the builder's default under the terms of the contract. Th contract mandated that any dispute with the builder/developer would have to be adjudicated via arbitration. I don't remember the fine details in the contract about the selection of the arbitrator, the venue of the proceeding, who pays the costs, etc., but I do recall walking away from the deal with a bad feeling about the developer and how unfair the deal was, after they refused to cross out the arbitration clause in the agreement.

Since then I have witnessed the explosion in the use of forced arbitration clauses in just about every transaction in which a little guy engages, in the process of living a regular life during these rapidly changing times in which we live.

Forced arbitration is a trick used by powerful to prevent the less powerful from suing them in court in front of a jury of their peers. From terms of use agreements with cell phone service providers, social media companies, to open a bank account, to purchase or lease a car, to agreements needing to be signed to place our loved ones in a nursing home-one can expect to be forced to sign or acknowledge that they are waiving their right to go to court in the event of a dispute, and agree to be bound by the arbitration process. Its a take it or leave it situation, and the consumer is forced to waive their rights if they want a cell phone, because you cant find a provider that offers service that doesn't require forced arbitration.

So how did we get to this point, where if you want a job, or to purchase just about every good or service in America, you are required to sign away your 7th Amendment right to a trial by jury in a court of law? The floodgates for forced arbitration were opened wide by our very own Federalist Society stacked federal and state judiciaries, led by an activist Supreme Court of the United States. That's why I have filed legislation that unpacks the Supreme Court by adding 4 Justices, legislation that would impose 18 year term limits on Supreme Court Justices, legislation adding 77 new federal district court judgeships, and in the last Congress and in the next session of Congress I will introduce legislation to increase the number of judgeships on the nation's federal courts of appeals.

In the 1995 case of Allied-Bruce Terminix Cos. v Dobson (513 U.S. 283) Justice O'Connor wrote: "over the past decade the Supreme Court has abandoned all pretense of ascertaining congressional intent with respect to the Federal Arbitration Act, building instead, case by case, and edifice of its own creation." Justice O'Connor was spot on with her analysis. Starting in the 1980's the Supreme Court began transforming the Federal Arbitration Act into something never intended by Congress, which passed the Act in 1925 to provide an alternative by which businesses of equal standing and power could resolve disputes without protracted litigation in court.

Under current Supreme Court law, arbitration can be forced upon the much less powerful consumer by the wealthy and powerful corporation, by way of a take it or leave contract. And I don't have to tell you all of the disadvantage the consumer faces when forced into arbitration when a dispute arises. Nor must I convince you that the threat of a jury trial levels the playing field for the consumer against the wealthy and powerful business against whom the dispute arose.

Passage of the FAIR Act would render unenforceable, forced arbitration clauses in in consumer agreements. The legislation currently has 100 cosponsors, and when Democrats controlled the House we passed the FAIR Act 225 to 186 in the 116th Congress, and 222 to 209 in the 117th Congress.

Momentum will continue to build towards passage, and I'm grateful to see the progress that has been made. But clearly, we still have a lot of work to do. The good news is that I ain't no ways tired!

With your support, we will continue the battle to protect consumers, and we will continue to fight until we win. You have my full support as you battle in the trenches for your client, and please know that you will always have an advocate in congress working with you to protect our clients! Thank you, and have a great training event!

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