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Senate Judiciary Committee Examines Mandatory Arbitration

Thursday, June, 30, 2011

Mandatory arbitration clauses were the subject of a Senate Judiciary Committee hearing on Wednesday as the committee, chaired by Vermont Democrat Patrick Leahy, examined how such provisions affect ordinary Americans' access to the judicial system.  Debated during the hearing were recent decisions of the U.S. Supreme Court that generally upheld mandatory arbitration provisions in contracts.


Mandatory Arbitration Supported by Supreme Court


The most recent case at issue was Wal-Mart v. Dukes, a class action filed on grounds of gender discrimination at the nation's largest employer.  Testifying before the committee was Betty Dukes, the primary plaintiff in that case.  She represented a class of 1.5 million women employees of Wal-Mart until the Supreme Court refused to certify the class. 


Other Supreme Court cases discussed during the Judiciary Committee hearing included Janus Capital group, Inc. v.  First Derivative Traders, and AT&T Mobility v. Concepcion.  In the latter case, the court held that the Federal Arbitration Act protects corporations from class-action arbitrations and that individuals claiming harm must each arbitrate separately with defendants.  The decision in the Dukes case was similar; by decertifying the class, the court in effect was announcing that individual women alleging gender discrimination would have to proceed one at a time to make a case against Wal-Mart.


Thus far, the Committee has not specifically focused on the issue of copyright arbitration, preferring to concentrate on employment and consumer issues. 


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