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Several lawsuits have been filed in court against musician Travis Scott, the entertainment company Live Nation, and other organizers, but it is unclear whether the lawsuits will remain in a public court due to arbitration clauses in the fine print. If someone purchased a ticket through Live Nation’s website, the ticket purchaser is likely bound to arbitrate disputes with Live Nation because of the Terms of Service governing the website. 

The procedural protections available in arbitration are limited compared to court procedures. For example, the injured victims or their survivors who are stuck in arbitration generally have no automatic rights to engage in broad discovery, such as by taking depositions of key players involved in organizing or managing the concert, or by requesting access to documents, emails, or videos related to the horrific event. In court, the victims or their survivors would generally be entitled to broad discovery of all relevant evidence, but in arbitration, it can be more difficult to gather evidence of wrongdoing. 

Furthermore, the decision of the arbitrator is generally final and binding, even if the arbitrator makes serious errors, while an erroneous court decision is typically subject to appellate review.  Also, arbitration is limited to an individual’s claim, and collective or class proceedings are not allowed. However, court proceedings generally provide for class actions.    

Congress is currently considering the proper scope and role of arbitration in our society. For example, there are pending bills to curtail the use of forced arbitration for workplace disputes, sexual assault claims or claims involving nursing homes. An overhaul of our almost one-hundred-year-old Federal Arbitration Act is long overdue, and it is time for America’s courts to play a stronger role in administering justice. 

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.

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check mark image with workersOregon Senator Jeff Merkley and U.S. Representative Bill Foster of Illinois introduced the Investor Choice Act earlier this month. The bill would prohibit broker dealers and investment advisors from forcing investors to agree to mandatory arbitration. The bill also prevents brokers dealers and investment advisors from forcing investors to waive the right to bring a class action lawsuit. The Senate’s version of the bill is available here. 

The North American Securities Administrators Association (NASAA) and Public Investors Advocate Bar Association (PIABA) endorsed the legislation. SEC Commission Chairman Gary Gensler said during his confirmation hearing that investors should be able to chose to go to court to resolve disputes.

Most agreements with individual investors in the financial services industry force customers into arbitration. Many investor advocates want investors to have the option of pursuing claims in court. Arbitration lacks the transparency of court and is sometimes cost prohibitive.

The North American Securities Administrators Association, Inc. (NASAA) announced its support for the Investor Choice Act of 2019 (S. 2992) in a June 2020 letter to the bill’s sponsor, United States Senator Jeff Merkley. NASAA is made up of securities administrators in all 50 states, Canada, and Mexico. NASAA describes its mission as protecting consumers who purchase securities or investment advice. Its members have authority to investigate investor complaints, enforce state securities laws, and educate investors about their rights.

The Investor Choice Act would prohibit broker-dealers and other investment industry professionals from including mandatory arbitration requirements and prohibitions on class action lawsuits in contracts that many investor customers enter into to receive investment services. These provisions in customer agreements force investors to give up important legal rights to work with a financial professional. Arbitration requirements mean investors give up the right to bring claims in court and have a judge or jury resolve the dispute. Class action waivers make it difficult or impossible for investors with small or relatively small claims to obtain relief because the costs of individual cases often are greater than the potential recovery. For many investors who are the victims of fraud or other financial misconduct but who have relatively small claims, class action waivers mean that the defendant will never be held accountable for illegal acts.

For more information, this link will bring you to the text of the Investor Choice Act. Click here to learn more about NASAA.

Here is a link to an interesting article showing how DoorDash is now afraid of its own Mandatory Arbitration Agreements even though it negotiated with arbitrators to get special rules.

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.

Sign up to receive Class Actions Blog posts in your inbox!

A Kings County New York Judge has ruled that Uber cannot force arbitration on a customer, finding that Uber had not proven that the customer agreed to arbitrate disputes when she signed up on-line for Uber’s services. Continue reading “Judge Rules Uber Cannot Force Private Arbitration on Customer”

Senate Republicans narrowly passed a resolution to kill a recently adopted Consumer Financial Protection Bureau (CFPB) rule prohibiting financial firms from requiring customers to resolve any disputes with the firms through individual arbitrations.

Continue reading “Senate Republicans kill CFPB rule banning forced arbitrations”

The Economic Policy Institute just released a fact sheet debunking industry claims that consumers recover more money in arbitration than class actions.

Continue reading “Economic Policy Institute issues report saying average consumer does better in a class action than in arbitration”

Paul Bland has written an excellent article in The Hill that reviews the background behind the publication of the new CFPB rule banning mandatory arbitration, and addresses the merits and criticisms of the new rule.

Continue reading “Article in The Hill explains why the new CFPB banning mandatory arbitration is a good thing”

The Department of Justice announced on June 16, 2017 that it will switch sides in a Supreme Court case, dropping its previous support for workers to throw its weight behind management.

Continue reading “U.S. Justice Department switches sides in NLRB case before Supreme Court”

FeeU.S. District Judge James Lawrence King ruled this week that Wells Fargo cannot force unnamed class members’ claims into arbitration in five lawsuits arising out of alleged improper re-ordering of overdraft fees that have been consolidated in multidistrict litigation in Florida. 

Continue reading “Judge rejects Wells Fargo’s repeated bids to compel arbitration”

fine printAccording to a story published in the Hill, Wells Fargo’s scandalous practice of secretly opening more than 2 million sham deposit and credit card accounts dragged on for at least five years, because Wells Fargo contract provisions blocked consumers from suing the bank in court. Continue reading “Wells Fargo got away with setting up sham accounts for 5 years because of forced arbitration clauses”

In a strongly worded decision, Judge Rakoff began his opinion by raising suspicion about whether the Federal Arbitration Act could properly be applied in today’s commercial context:

Continue reading “Respected US District Judge Jed Rakoff refuses to enforce Uber’s arbitration and class action waiver clauses”

fine printHere is the link to a New York Times article that is critical of the Forced Arbitration Clause in Gretchen Carlson’s Fox News Contract.

Continue reading “New York Times article suggests forced arbitration clauses (like those in Gretchen Carlson case) protect sexual predators”

fine printThe Oregonian is reporting that people that sign up to use the Biketown bikes in Portland, Oregon have 30 days to opt out of the Forced Arbitration Clause in the sign-up agreement.

Continue reading “Portland consumers must opt-out of Biketown forced arbitration clause in first 30 days”

fine printPreparations are underway for the Democratic Convention in Philadelphia. The Draft Democratic Platform unequivocally supports an individual’s right to his or her day in court and efforts to limit forced arbitration clauses in employment and service contracts. Continue reading “Democratic Platform To Limit Forced Arbitration”

fine printGoogle Fiber has added new terms to its customer agreements.  Like other large Internet service providers, customers who want to sue Google Fiber must now instead submit to arbitration.

Continue reading “Like Comcast, Google Fiber is including class action waivers in its customer agreements”

fine printThe Los Angeles Times reports that Wells Fargo customers are being forced into arbitration, even when bank employees fraudulently open accounts.

Continue reading “Even in cases of fraud, customers forced into arbitration”

fine printIn The Arbitration Epidemic: Mandatory Arbitration Deprives Workers And Consumers Of Their Rights, Katherine V.W. Stone and Alexander J.S. Colvin outline the problems posed by mandatory arbitration and explain how, in a series of rulings, the Supreme Court has freed up large corporations to sidestep the legal system through arbitration clauses.

Continue reading “Economic Policy Institute Releases Important Paper on Problems With Mandatory Arbitration”

fine printThe New York Times recent articles on mandatory arbitration did a great job of shining the light on how arbitration clauses are creating a private secret judicial system.

Continue reading “Charlie Sheen required guests to sign arbitration clauses”

US Supreme CourtJean Sternlight from UNLV has written a very good article on why the U.S. Supreme Court precedent supports the contention that mandatory arbitration violates Article III of the Constitution.