Texas Watch—Consumer Protection. Corporate Accountability. Citizen Advocacy.

If you missed the premiere of HOT COFFEE, don’t worry.  You can still catch this must-see film about how corporate interests twisted the public debate against our civil justice system.  HBO and HBO2 are re-airing the film several times over the next few weeks. Read More »

We’ve all heard the story of Stella Liebeck and the infamous cup of McDonald’s coffee.  But, most of us don’t know what really happened.  The severity of the burns, the hundreds of complaints and injuries that preceded Ms. Liebeck’s injury, McDonald’s conscious internal corporate decision to keep the coffee at such high temperatures.

An important new film, “Hot Coffee” – premiering on HBO on Monday June 27th at 8:00 PM CT – features explores the McDonald’s case and others to show how corporate and insurance interests have manipulated the debate to turn public opinion against our constitutional right to Trial by Jury.

This is Must See TV! Read More »

Say you have a problem with your contractor who claims you still owe him money. Or maybe the people who signed a contract to buy your house did not go to settlement and now want their earnest money returned. How can such disputes be resolved?

Obviously, litigation is one answer, but that is time-consuming, expensive and always uncertain. Often the cost of litigation may exceed the amount of money at the heart of the controversy. But there are alternatives, including arbitration and mediation.

In mediation, a neutral person listens to both sides and makes a nonbinding recommendation (putting you back at square one if either party rejects the proposed solution). In arbitration, the decision is binding and is likely to be upheld by a court of law. If two parties have voluntarily signed a contract that requires arbitration, the courts will generally not allow the dispute to be litigated.

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One key difference between litigation and arbitration deals with the information available to each party.

In court, both parties are entitled to discovery. That means you can submit written questions (called interrogatories) of the other side, require production of all documents that will be used in trial and take depositions. A deposition is where the plaintiff or the defendant (or a potential witness) will be required to answer questions, under oath, before a court-authorized stenographer who will prepare a transcript that can be used at the trial. In arbitration, however, discovery is at the discretion of the arbitrator.

Unlike court proceedings, which are very formal, arbitration is relatively informal. The parties and the arbitrator sit around a conference table. Sometimes, the arbitrator will have been provided background information by both parties. The complainant presents her case, the respondent follows with his position, and the arbitrator issues an opinion. If the case is complex or requires legal research the decision may not be immediately provided.

Once the decision is made, the losing party must comply with it. If this does not happen, the winner has the right to go to court to enforce the decision.

In litigation, the rules of evidence — no matter how archaic they may seem — will exclude certain evidence that has no place in a courtroom. For example, hearsay evidence, where one person testifies what another has told him, is generally not admissible in court.

In an arbitration proceeding, however, the arbitrator has the discretion to admit all evidence submitted by both sides. The rules are lax, and the arbitrator makes the call.

Another drawback to arbitration is that the arbitrator (or panel of arbitrators) is not required to file a written opinion. Often, the arbitrator hands down a one-paragraph decision, awarding a sum to one side.

In court, all of the parties in the litigation usually understand the rationale behind the judge’s opinion — regardless whether they agree with the final order. The judge will give an opinion from the bench with a lengthy explanation or write a comprehensive decision accompanying the court order. Should you opt for arbitration, insist on receiving a written decision at the end of the proceeding.

Finally, one of the hallmarks of our legal system is the right to appeal a lower court’s decision. Judges are human, and they can (and do) make mistakes. The appellate process gives the losing party another bite at the apple. The appellate court will not overrule the trial court’s determination of facts but will carefully analyze the facts as they relate to legal principles.

As indicated earlier, the arbitrator’s decision generally can’t be appealed. Unless the losing party can show that the arbitrator was not impartial and did not disclose facts that would otherwise have disqualified him, or can prove that the award was procured by corruption, fraud or other undue means, a court will not overrule the arbitration decision.

Read More: The Washington Post

Unexpected wireless charges are a chronic affliction of life on the grid. The industry triggers more complaints from consumers than any other. AT&T Mobility, by consumer rankings, is the worst. Its performance in a case the Supreme Court heard recently has done nothing to improve that reputation.

This is the latest in the arbitration war — a battle over whether the United States will increasingly have a privatized system of justice that bars people from enforcing rights in court and, if so, what will be considered fair in that system. It would be grossly unfair for the court to let the corporation get away with what it wants to in AT&T Mobility v. Concepcion — a case that involves a small amount of money and a huge principle.

When Vincent and Liza Concepcion signed up for AT&T cellphone service, they received two new phones in exchange for making a two-year agreement. To their consternation, AT&T charged them $30.22 in sales tax for the phones. The Concepcions sued the company for fraud in Federal District Court and their case and another were consolidated as a class action.

Because of an arbitration clause in its customer agreement, AT&T insisted that the Concepcions had to submit their claim to individual arbitration. The federal district judge said no. The judge ruled that the agreement is “unconscionable” under California law — imposed by the company harshly, coerced and not consented to. The United States Court of Appeals for the Ninth Circuit forcefully upheld the decision.

The issue before the Supreme Court is the Federal Arbitration Act, which recognizes some kinds of arbitration agreements as enforceable obligations — and whether that pre-empts the California law. The court must decide if the state law applies only to arbitration agreements, and not contracts generally, or if it hinders Congressional desire to treat arbitration agreements and other contracts similarly and promote speedy resolution of claims.

Read More: The New York Times

Continuing a strong pro-arbitration bent, the U.S. Supreme Court on Monday made it more difficult for consumers and employees to challenge the fairness of arbitration agreements in court.

In Rent-A-Center, West v. Jackson, the justices divided, 5-4, in holding that an arbitrator, not a district court, will decide whether an arbitration agreement as a whole is unconscionable if the agreement explicitly delegates that issue to the arbitrator and the consumer or employee has failed to challenge the specific delegation clause.

“It greatly limits the ability of consumers and employees to challenge the fairness of arbitration agreements,” said Deepak Gupta of Public Citizen Litigation Group, co-counsel to Antonio Jackson, along with Public Justice and Ian Silverberg of Hardy & Associates in Reno, Nev., who argued the case.

“The kind of delegation clause at issue here is not a common clause, but we can expect those clauses to become much more common,” he said, adding, “The decision is very formalistic, imposing a kind of pleading requirement. If a consumer’s lawyer knows enough to challenge a specific part of the arbitration agreement, they can go to court.”

Read More: National Law Journal

Antonio Jackson worked at Rent-A-Center in Nevada. The store rents out appliances and electronics and also—in the event of a contentious employment dispute—quality judges.

In 2004, when Jackson signed his employment contract, he agreed that disputes arising from his employment would go to arbitration. Specifically, his contract said, “The Arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement.” And so, in 2007, when Jackson sued Rent-A-Center for racial discrimination and retaliation in federal district court, his former employer tried to dismiss the case, arguing that the arbitration agreement meant that only an arbitrator could determine whether the agreement was enforceable. (More legalese in the contract: The arbitration authority extended to “any claim that all or any part of this Agreement is void or voidable.”)

Jackson’s claim here is that the arbitration agreement he signed is unconscionable—so one-sided in favor of the employer that it cannot be enforced. But first, he has to argue to the Supreme Court today that it is for a judge, not an arbitrator, to rule on that question. Just to be clear, or as clear as you can be when fighting your way through 59 minutes of warm mud, the issue today isn’t whether Jackson’s employment contract is unconscionable, but whether an arbitrator gets to arbitrate that question or a judge gets to judge it.

Read More: Slate.com

The Fort Worth Star-Telegram published a guest column by Texas Watch Executive Director Alex Winslow discussing the Toyota safety debacle and how the comapny should have to face an impartial judge and citizen jury – not an underfunded and over-lobbied government bureaucracy.  Check it out. Read More »

In a legal battle that has been going on for more than a decade, homeowners Bob and Jane Cull finally prevailed in court yesterday over mega-builder and political moneyman Bob Perry.  The jury’s decision sends a clear message that the influence of PAC contributions and high-dollar lobbyists have not yet crept into the jury box.  Politicians and activist judges should think twice before twisting the law at the behest of corporate lobbyists who abuse the public’s trust. Read More »

Congress is expected to pass legislation by Christmas that would ban defense contractors from forcing employees into arbitration in discrimination and sexual assault lawsuits on contracts of more than $1 million. The bill stems from the alleged rape of former KBR employee Jamie Leigh Jones by three coworkers in 2005 while she was in Iraq. The no-arbitration clause will have some minor exceptions, such as allowing arbitration if “it is necessary to avoid harm to national security interests of the United States.”

As the deadline to file legislation comes to a close, it is clear that many lawmakers recognize the need to strengthen protections for Texas families, patients, homeowners, drivers, and small business owners. After several years of dominance by the insurance industry and their special interest lobbyists, lawmakers have filed a number of bills this session that if passed will improve the marketplace for everyday Texans. Read More »