arbitration

FAIR Act Passes in U.S. House of Representatives – Alabama Consumer Rights Attorney Judson E. Crump

September 20, 2019 by Attorney Judson E Crump 3 Comments

Today the US House of Representatives passed a landmark piece of legislation aimed at helping consumers and employees get access to justice: the FAIR Act. The Forced Arbitration Injustice Repeal Act of 2019 partially repeals the Federal Arbitration Act in certain consumer and employment contracts. This is a HUGE deal. Why? Because forced arbitration has become the primary weapon that big corporations use to avoid the justice system when they’ve done wrong to their customers and employees.

The Federal Arbitration Act was passed back in the 1920s, and was initially just a procedural device for use in federal courts to help enforce agreements to arbitrate disputes. Indeed, Justice Clarence Thomas, a principled originalist, still holds that view. But unfortunately, since the 1980s, the Supreme Court’s conservative majority has steadily and grossly expanded the scope of the Federal Arbitration Act, so that nowadays pretty much every contractual dispute in America is subject to the FAA. Things like credit card agreements, cable or telephone service contracts, automobile sales, employment agreements, and just about every other contract the governs your dealings in life can now include arbitration provisions that prevent you from taking legitimate cases to real courts, and instead forces you into the secretive, private process of arbitration.

Arbitration really screws consumers for a few reasons. First, ordinary working people with claims against big business are just flat out less likely to win in arbitration, and when they do win they get less money than they typically would in real courts. Second, if you lose in arbitration, you can’t appeal, no matter how wrong the arbitrator’s decision was. And third, arbitration provisions can prohibit you from filing a class action lawsuit. This means that arbitration is often a get-out-of-jail free card for big corporations that rip off thousands of consumers. For instance, if a credit card company charges you an illegal $40 fee, what are you going to do about it? In real court, you’d file a class action and get those fees returned for yourself and the thousands or millions of other customers who’ve been similarly ripped off. But arbitration only allows you to file individual claims. And who’s going to hire a lawyer for a $40 case? You can’t! Which is exactly the point. Big business loves the free money they get from ordinary working people, so they LOVE arbitration. And, unfortunately, so do their mostly Republican allies in Congress.

Which is why today’s passage of the FAIR Act is a milestone. If it passes the Senate (which is a BIG “if,” given the fact that Republicans still control the Senate), and miraculously gets signed into law by the president, this law will be a massive win for ordinary working people. Let’s hope and pray that a few moderate Republicans in the Senate will stand up for the rights of working people and pass this bill.

Alabama Consumer Files Arbitration Case Against Debt Settlement Firm Boulder Legal Group, LLC – Alabama Consumer Rights Lawyer Judson E. Crump

September 12, 2018 by Attorney Judson E Crump 4 Comments

Boulder Legal Group, LLC is a Debt Settlement firm. A recent arbitration case was filed against them by an Alabama couple alleging that despite paying the debt settlement company thousands of dollars to settle some credit card debts, they were sued by Discover Bank and then abandoned by Boulder when they needed them most.

My clients hired this debt settlement company back in October of 2016 to help resolve some credit card debts. When they signed up with Boulder Legal Group, they were told that they would be protected from collection lawsuits, and that if any collection lawsuits were filed against them, the debt settlement firm would help defend them from the lawsuit. So they agreed and signed a contract, believing that Boulder Legal Group was a legitimate law firm who would actually defend them if their creditors sued them.

According to the Complaint, the couple made steady payments to this debt settlement firm for months, paying them well over $10,000. But sure enough, they were sued by Discover Bank for one of the credit cards that they had included in their debt settlement program. They notified the debt settlement company, and expected some legal defense. But no attorney ever appeared in the lawsuit or filed an answer for them. So a default judgment was entered against them for over $12,000. Soon after that, a garnishment was filed with the court for the garnishment of the husband’s wages. Neither Boulder Legal Group nor any attorney associated with them filed anything to stop the garnishment, to defend the lawsuit, or to prevent Discover from obtaining a judgment against them.

So they came to us. Like all predatory contracts, the agreement they signed with Boulder Legal Group contained a mandatory arbitration provision and class action waiver, which was designed to prevent consumers from getting their cases to court. We filed an arbitration case against Boulder Legal Group, the Law Offices of Camron Hoorfar (an attorney associated with Boulder), and Global Client Solutions, LLC (the payment processing company used by Boulder Legal Group).

The arbitration demand alleges that Boulder Legal Group and its attorneys committed legal malpractice by failing to provide any defense whatsoever when our clients were sued by Discover Bank. It also alleges that Global Client Solutions, LLC violated the Electronic Fund Transfers Act by failing to send written statements to our clients, which prevented them from ever seeing where their money was going.

If the arbitration is successful, we should be able to obtain a court judgment against this debt settlement company, putting a public record out there for the information of anyone else who may find trouble from this company.

Debt Settlement companies are almost always scams. I’ve never encountered one that has done a good job for their clients. As an attorney, I am disgusted by out-of-state lawyers who fool people into paying good money for what they believe to be bona fide legal representation. If you are considering hiring a debt settlement company, don’t. Talk to a real, local lawyer today.

Chuck Stevens Chevrolet Found Liable for Defrauding Alabama Woman – Consumer Rights Attorney Judson E. Crump

June 13, 2017 by Attorney Judson E Crump 1 Comment

Chuck Stevens Chevrolet of Atmore, Inc. sold Tamie Shufford a car that had about 1,000 more miles on it than they certified in their sale contract.

Their salesman told her the car was new and had only 67 miles on it. The paperwork and the odometer disclosure forms said the same thing. But as it turned out, the car had been previously sold to another woman. For some reason, that deal was later canceled, so Chuck Stevens then turned around and sold the car to Ms. Shufford, stating that it was still new and that it still had 67 miles on it.

She complained to the Alabama Attorney General’s Office and wrote Chuck Stevens asking for a partial refund, but they didn’t offer her any relief. They said that “This vehicle was contracted for sale to another person; however the financing never took place so the sale was reversed. Ms. Shufford was sold a new car…”

So we sued them under the Motor Vehicle Information and Cost Savings Act, a federal law that requires dealers to execute title transfer and mileage disclosure paperwork clearly and accurately. The matter went to arbitration, and the previous buyer of the vehicle came forward to testify that she not only had in fact taken the vehicle home and driven it for a few days, but that she had taken it on a trip to Tampa, Florida! Which would have meant that the odometer disclosures written in Ms. Shufford’s contract were off by about a thousand miles.

At the arbitration, Chuck Stevens had its employees and former employees testify that these sorts of deals were “common” in the industry. Their excuse for “forgetting” that the vehicle’s odometer reading was off by a thousand miles was that their computer system didn’t fix it for them.

The arbitrator wasn’t buying it. He found that:

The Respondent had knowledge that the vehicle had been operated to some extent by Ms. (redacted) and had the vehicle in its possession for a least a couple of weeks prior to the sale to the Claimant. It could have easily checked the “cumulative mileage registered on the odometer” as required by the MVICSA…the Respondent was at least grossly negligent or acted with disregard of the truth.”

Which was, of course, exactly what happened.

The Motor Vehicle Information and Cost Savings Act has a minimum penalty of $10,000 if a dealer violates it with intent to defraud, as Chuck Stevens was found to have done here. So the arbitrator awarded a judgment for that amount, plus $3,333 for attorneys’ fees. And Chuck Stevens also had to pay $2,200 for arbitration administration fees and $1,500 for arbitrator compensation.

Now, car dealers usually love arbitration because it keeps these sorts of lawsuits from getting before a jury. But this time, the dealer found itself on the losing end of its own arbitration clause. And here’s the beautiful part: once Chuck Stevens was faced with the consequences of its decision to use mandatory arbitration clauses, did they honor the arbitrator’s decision? No. They didn’t. Guess where they went?

To the public court system! The very court system that arbitration is designed to avoid!

Yes, they filed this gem of a motion: Chuck Stevens Wants A Re-Do After it Loses Arbitration

The motion asked the Escambia County Circuit Judge to overturn the arbitrator’s decision. Their motion basically said that since the arbitrator made the (in their opinion) wrong decision, they should give them another shot.

Believe me, as a lawyer who’s been on the losing end of arbitration before, I feel their pain. But, tough shit. It’s nearly impossible to overturn an arbitration award in Alabama (and, honestly, in most places in the USA), and this case was no exception. The statute authorizes an award of $10,000 plus a reasonable lawyer’s fee if the defendant violates the MVICSA statute with intent to defraud. The arbitrator found they’d violated it with intent to defraud and gave us exactly what the statute said.

Unsurprisingly, the Circuit Court flatly rejected Chuck Stevens’ argument, and entered this order: Judge Rejects Chuck Stevens’ Request to Overturn Arbitration Decision.

So now it’s official: Chuck Stevens Chevrolet of Atmore, Inc. has been found liable for violating its customer’s rights, and they’re going to have to pay.

Sure, arbitration is something that is used often to unfairly keep defrauded customers out of court, but in the right type of case, you can still get a fair result.

If you’ve been defrauded by a business who has stuck you with mandatory arbitration, don’t despair. Call an experienced fraud arbitration lawyer to discuss your legal rights.

NOTE: These recoveries and testimonials are not an indication of future results. Every case is different, and regardless of what friends, family, or other individuals may say about what a case is worth, each case must be evaluated on its own facts and circumstances as they apply to the law. The valuation of a case depends on the facts, the injuries, the jurisdiction, the venue, the witnesses, the parties, and the testimony, among other factors. Furthermore, no representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

Virginia College = Scum – Alabama Consumer Rights Attorney Judson E. Crump

March 9, 2017 by Attorney Judson E Crump 1 Comment

Thinking About Enrolling at Virginia College?
DON’T!

Usually I’m pretty upbeat about my law practice. I get to represent real people with real world problems. I don’t have billing hour requirements. My clients are always very grateful for my work. I set my own hours and take or turn down whatever cases I want to. But there is a downside. Want to know the worst thing about being a consumer rights lawyer in America in 2017? It’s this:

Seeing people who have been totally screwed and having to tell them there is nothing they can do about it.

That is the worst part of my practice. And it happens all the time.

-ALL- the time.

At least 5 times a week I get a phone call, an email, a website inquiry, or a personal meeting with a person who is interested in hiring me, who has a legitimate gripe against some person or business who’s taken their money or ruined their credit or intruded into their financial privacy, or something like that. And they bring me a contract to look over that they’ve signed. And sure enough, it’s a long, unintelligible, fine-printed mess that Rumplestiltskin would be proud of. No matter how unfair a contract is, it will almost always be upheld by our courts. This wasn’t always the case, but we have had an very conservative Supreme Court for the past 30 years now, so the law has changed.

So latest nastily lopsided contract I saw came from a young woman who wanted one thing: a better job. She had seen some advertisements from a legitimate-looking college called “Virginia College.” Sure sounds legit, right? Don’t snicker or chuckle here. If you’re younger than 20 and don’t come from a family of college grads, you’d be fooled too. So she wanted to be a pharmacy technician, and Virginia College told her they could get her there.

Needless to say, they didn’t. Even though she got excellent grades on all her tests. When she went to find a job, she discovered that the “education” she’d received was basically worthless.

That’s because Virginia College is no more a college than the Salvation Army is an army. They call their facility a “campus” and they call the manager of that facility a “dean,” but those labels are designed, like everything else at these for-profit “colleges,” to bolster the facade of legitimacy. Because for-profit colleges don’t exist to actually provide education. They merely pretend to provide education in order to take advantage of the gigantic government handouts of the federal student loan program. They’re taking billions of dollars of taxpayer money that is intended to pay for real education, and leaving the debt – which can’t be discharged in the bankruptcies that their students inevitably file when they can’t find a job – on the poor students who fell for their scams.

Now here’s the real kicker: we can tell how bad Virginia College is screwing its “students” without even setting foot on their “campus.” All we have to do is look at the enrollment agreement you have to sign to get there. It’s attached, and you can read it for yourself here:

Enrollment Agreement -Virginia College

Here are a few highlights:

Arbitration Clause. This prohibits you from ever taking them to court if they have defrauded you or failed to provide you with the services you paid for. It ensures that if you do make a complaint against them, the best you get is a biased hearing and, in the off-chance that they lose, they get to keep it secret, so other people who find themselves in your position don’t get to see your suit against them in any public record. See Paragraph 10.

Class Action Waiver. You can’t sue them, or even participate in a class action case against them. Ever. This is a get-out-of-jail free card for any corporation that steals, as long as they steal small amounts of money from large numbers of people. That’s not hyperbole. AT&T Mobility v. Concepcion (U.S. 2011). See Paragraph 10.

One Way Attorneys’ Fees. So if you sue them and you lose, you have to pay their lawyers’ fees. If they sue you and you lose, you have to pay their attorneys’ fees. If they sue you and lose, they don’t have to pay your fees. If you sue them and win, they don’t have to pay your attorneys’ fees. Paragraph 15.

Liquidated Damages. So if they defraud you into wasting 2 years of your life in their worthless programs and taking on $25,000 of bankruptcy-proof student loan debt at 6% interest, and you take them to court and prove all that, the most you can get is your tuition. None of the costs of actually going to school, none of the time you wasted there. And it gets worse: it goes to your student loan company instead, but doesn’t cancel the debt because it doesn’t pay the interest! So if you can find a free lawyer and win, you still lose money! Paragraph 14.

Integration Clause. Paragraph 16. This lets their salespeople and “deans” and “professors” lie to your face, and prevents you from doing anything about it if their lies are contradicted by the fine print in this contract, or something in the massive handbook referred to in this contract. Even if you have them tape-recorded making a demonstrably false statement, you can’t do anything about it. At least, not in Alabama.

Non-Transferability of Credits Acknowledgement. Paragraph 8 basically says that “we aren’t a real college, so the credits we award you probably won’t be recognized by any legitimate educational institution.” This should be a warning sign to you.

It’s almost comical. Almost. Because this sort of crap used to be illegal. In the old days, courts wouldn’t enforce such totally unfair stuff. But not anymore. These businesses make a ton of money. And they don’t earn it by producing a quality product. They earn it by trickery, and by preying on the dreams of good people. But since they do make money, they can pay politicians to write laws that shield them from liability for their own misconduct. They can pay the justices of the Alabama Supreme Court to keep them from ever having to repay people they’ve defrauded. They can pay for advertising campaigns that distribute propaganda to voters so we’ll think that if we don’t keep the government boot on working people, our economy will collapse and all of our jobs will disappear. And it works. It’s working great. The propaganda has been a massive success.

Alabama Supreme Court Continues to Harm Working People for the Benefit of Wealthy Corporations – Alabama Consumer Rights Advocate Judson E. Crump

March 4, 2017 by Attorney Judson E Crump 1 Comment

The Alabama Supreme Court Hates Working People and Loves Big Corporations. Here’s Yet Another Example.

On June 26, 2015, the Alabama Supreme Court issued a decision in the case of American Bankers Insurance Company of Florida v. Gladys Tellis. Now, for those of us who have been living for a while under the extreme anti-consumer regime of the current Alabama Supreme Court, the outcome of such a case can be predicted just by its name. American Bankers Insurance Company (a huge and rich insurance company) against a lady named Gladys Tellis (an ordinary woman seeking justice after she’d been defrauded). Whenever a big company is sued by a worker or consumer or anyone who isn’t also a big powerful corporation, the Alabama Supreme Court, whose 9 Republican Justices were elected with millions of campaign dollars paid for by those very banks and insurance companies, is almost certain to find a way to rule against the working man. So this case was no exception: they handed down a decision that dealt yet another blow to regular people seeking justice.

In this case, the issue before the Court was whether the insurance company could enforce a mandatory arbitration agreement against the Plaintiffs in that case. Normally, arbitration agreements are enforced due to a federal law called the Federal Arbitration Act, which since a major US Supreme Court misreading of that statute in 1995, has basically been applied to every contract in the United States. Note here that though I’m complaining in this article about the extreme pro-corporation bias of the Republican Alabama Supreme Court, in the Allied Bruce Terminix case of 1995, the U.S. Supreme Court’s anti-consumer decision was a 7-2 decision, where the only justices who rightfully dissented were the most conservative members of the Court: Scalia and Thomas -both Republican appointees. So don’t think for a minute that I’m just against Republican judes. I’m not. I’m against judges who are biased against workers, the poor, and those who have been done wrong by the rich and the powerful

So enforcing mandatory arbitration agreements, no matter how Rumplestiltskinian they may be, is commonplace in the United States. Why does this matter? Because arbitration is a grossly unfair proceeding that deprives people of many, many rights that they are supposed to be guaranteed by the Constitution: the right to join together with other people in lawsuits (not just in class actions, but even cases where a handful of friends have been screwed in the same way by the same company), the right to a trial by jury, the right to obtain evidence in their favor that is held by the other side, and, most importantly, the right to appeal a decision that is flat-out wrong.

But in this case, the Plaintiffs had a solid defense to the arbitration agreement in question: they never signed it.

Now anybody with common sense can understand the issue: if you don’t sign it, it isn’t binding. That’s the normal rule. Certainly the opposite rule applies: if you sign a contract, it is binding, right? And of course, the latter rule has always been enforced by our courts. And what’s good for the goose is good for the gander, right?

Not in Alabama.

Somehow, the Alabama Supreme Court found a way around the common sense rule that only contracts you actually agree to can be held against you. They said that by paying premiums, the insurance company’s customers implicitly consented to the arbitration agreement. This is crazy. The only explanation, of course, is that these judges were just looking for any excuse to help out their corporate sponsors, and they did so at the expense of all of Alabama’s citizens.

This is what happens when we allow our highest court to be sold to the highest bidder. It is literally justice for sale. That is a very evil phenomenon, and the worst part of it is this: our voters don’t care. Because this is a conservative state, and the millions of dollars of insurance company money floods our televisions, radios, billboards, and emails with false messages that if we don’t elect these extreme Republican justices, then our state will descend into crime and chaos.

Until people start caring about protecting their rights, this is going to continue. We are going to keep losing, and our citizens are going to continue to be screwed by big out-of-state companies that don’t care about Alabama.

Finally, I’d like to mention one thing that should be remembered. There was, at that time, at least one ray of hope on the Supreme Court: Chief Justice Roy Moore. Many people criticize him for his popular image in the media of being a crazy conservative, but the truth is that while he was on the bench, he was the only justice that actually cared about doing justice for ordinary people who had been defrauded or harmed by the rich and the powerful. In the Tellis case, he wrote a powerful and eloquen dissent explaining just how important the right to trial by jury is, and he saw right through the majority opinion to show just what is happeneing in cases like this: the victims of fraud are excluded from the courthouse. They have lost their constitutional rights and are forced into an arbitration system that makes a mockery of justice.

Unfortunately, even that ray of hope has been extinguished, as Justice Moore was removed from the bench for his stance in defense of traditional marriage.

The full opinion in the Tellis case can be found here:

American Bankers Insurance v. Tellis

Scalia’s Last Betrayal: AT&T Mobility v. Concepcion – Brokenhearted Catholic Lawyer Judson E. Crump

February 27, 2017 by Attorney Judson E Crump 3 Comments

January 18, 1995:

JUSTICE THOMAS, with whom JUSTICE SCALIA joins, dissenting.

I disagree with the majority at the threshold of this case, and so I do not reach the question that it decides. In my view, the Federal Arbitration Act (FAA) does not apply in state courts. I respectfully dissent.

Allied Bruce Terminix v. Dobson.

April 28, 2011:

JUSTICE SCALIA delivered the opinion of the Court.

…

We have described this provision as reflecting both a “liberal federal policy favoring arbitration,” Moses H. Cone, supra, at 24, and the “fundamental principle that arbitration is a matter of contract.”

AT&T Mobility v. Concepcion.

One of these statements was made by an honest intellect dedicated to restraining federal power within its original constititutional limits. The other was made by a dishonest intellect searching for an excuse to rule for the side he liked the best.

Yet both statements were made, or at least agreed to, by the late Justice Antonin Scalia. What happened during those 16 intervening years? Did he change his mind? Did his brain wither and grow feeble? Was he just tired of fighting the overreach of federal power and decided that, “if you can’t beat ’em, join ’em?” Did he just have different clerks that ghostwrote his opinions for him?

Any of these things may be possible, but they’re all disturbing. And the result can’t be denied. The man who at one time stood constant as a stone for his originalist devotion to the founding fathers’ vision, became somehow more malleable, more willing to compromise his former values, and eventually able to completely reverse course and make a decision that would ultimately do great harm to millions of Americans.

Go ahead and read the actual opinions and you’ll see exactly what I’m talking about.

The Terminix decision is famous because it took the old Federal Arbitration Act (which had largely lain dormant from disuse for many years) and expanded it to say not only that arbitration agreements were enforceable like any other contract (which is what the FAA actually says), but also that it is illegal for any state to enact any law limiting arbitration. In politics, you often hear people talk about “states’ rights.” And at one time, Justice Antonin Scalia cared about “states’ rights.” Case in point: Allied-Bruce Terminix.

Though the SCOTUS wasn’t able to predict it at the time, their Terminix decision created a tidal wave of fine-print arbitration clauses being inserted into every business dealing that the average person enters into in their lives: Want to have internet? You’re stuck with arbitration. A car? Arbitration. Want to work for a large company? Arbitration. Want a bank account? Arbitration. Credit card? Arbitration.

Time would eventually teach us that this explosion of arbitration was really, really bad for ordinary people, because it allowed big businesses to get away with negligence, theft, or even outright fraud and never be taken to court over it. So the “liberal” justices later decided to change their tune on arbitration. Once they realized that it was being used to screw over ordinary people, they started ruling against it. Sure, that’s not intellectually consistent, but liberals justices tend to care a lot less about upsetting precedent. It’s what they’re all about, in fact. Judicial activism is the whole problem that most conservatives have with the Supreme Court’s democrat appointees.

But as with so many other things in American civics nowadays, what matters more than principle is what side you’re on. And so we came, eventually, down to AT&T Mobility v. Concepcion. In this case, the cell phone carrier falsely advertised free phones, but they were charging people sales taxes on a “free phone.” Since 5% of $0.00 is $0.00, I don’t understand how that’s possible, but hey, that was what they were doing. Naturally, they got sued in a class action.

But AT&T had slipped a no-class-action ban into its arbitration contract. Meaning that if you wanted to sue AT&T for its $5.00 overcharge, you’d have to hire a lawyer and make your own lawsuit.

Obviously, this is never going to happen, which means that enforcing such agreements is basically legalizing frauds that are too small to hire a lawyer for. 4 of the justices realized this and said “No, you can’t do that sort of Rumplestiltskin crap. This is America. If you rip 10,000 people off for $5.00 each, you can be taken to court for $50,000.”

But the 5 Republicans said otherwise. They couch it in much more elegant English and make a few excuses (“class arbitration greatly increases risks to defendants” etc.) but ultimately uphold the fantasy that arbitration is fair, even when it basically leaves consumers with no recourse whatsoever to small wrongdoings.

Of course, much has been written of the unfairness of arbitration elsewhere, so there’s no need to re-write those books here.

My concern here is with Scalia, and particularly how he slowly quit fighting federal power. How, when faced with cases where the litigants (big businesses) who supported his “team” (the Republican Party) found themselves asking for the expansion of federal power, he lost his principles. He just gave up. Unlike his friend, Justice Thomas.

When Scalia died, I heard a lot of mourning, especially from fellow Catholics, about how this justice was a principled, stoic man, a force for good, and a consistent defender of the rights of those fighting federal power. Maybe with cases involving religion or abortion, he was, even during the last decade of his life. But not when the power of Uncle Sam was stretched out to protect his favorites. The record is clear.

Congress Can’t Do Anything, But They Still Find Time to Protect Big Banks – Alabama Consumer Finance Attorney Judson E. Crump

July 11, 2016 by Attorney Judson E Crump Leave a Comment

The U.S. House of Representatives Recently Passed a Bill to Help Large Financial Institutions Get Away with Ripping Off Their Customers.

It’s called the “Financial Services and General Government Appropriations Act,” and its current bill number is H.R.5485. Why does it matter? A little backstory is needed. Back in 2009, before people had forgotten just how bad the Subprime Mortgage Meltdown was, Congress passed a law called the Dodd-Frank Wall Street Reform and Consumer Protection Act. Unlike a great many laws passed by Congress (like, for instance, the comically named “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” which did nothing to either prevent bankruptcy abuse nor protect consumers), the Dodd-Frank Act really did try to reform Wall Street and protect consumers. Whether it succeeds will take some time to figure out.

One of the cornerstones of Dodd-Frank’s protections was the Consumer Financial Protection Bureau, which was authorized to regulate banks and financial institutions in certain ways. One of those authorized regulatory powers was the ability to restrict the use of forced arbitration.

As I and many others have explained before, forced arbitration sucks for a lot of reasons, because it is usually biased in favor of big corporations and if you get stuck with a bad or even a crazy decision, you cannot appeal it.

Of course, people who have done bad things generally don’t like having to pay for them, so big businesses who deal with lots of consumers love arbitration. Lots of corporations stick arbitration clauses in their massive 30 page contracts, even for things as seemingly minor as a cable subscription or cell phone purchase. Most arbitration clauses prohibit you from joining in or filing a class action lawsuit. So if a cable company overcharges 200,000 customers by $25 each, then they’ve stolen $5 Million, and they should have to pay it back, right? Most people believe so. But arbitration lets them get away with small frauds and ripoffs, because nobody is going to hire a lawyer and file a lawsuit for $25. Since the arbitration clause prevents these people from all joining together, the cable company just gets away. If a human steals $5 Million, you go to jail. If a big business steals $5,000,000, they just need to make sure they have an arbitration agreement with everyone they stole from.

This is ridiculous, so the CFPB recently issued a regulation to prohibit financial institutions from being able to do exactly that. Naturally, the banks kicked and screamed and called their pets in Congress to block the CFPB from implementing this common-sense rule. Unsurprisingly, the House of Representatives gave them exactly what they asked for. They passed this bill along party lines (Republicans mostly voted for the banks; Democrats mostly voted against them).

Hopefully, the bill will never get signed. Stay tuned.

This Is Why People Think Lawyers are Full of Crap

October 28, 2015 by Attorney Judson E Crump Leave a Comment

I love my job. Sure, I don’t get the huge payouts of the personal injury lawyers, or the television snippets of the criminal defense bar, or the posh offices and guaranteed salary of the corporate lawyers. But I get something a lot of lawyers don’t: I get to ask for justice. I represent humans who want nothing more than to be fairly compensated by the people and businesses who have screwed them. I punish law breakers, liars, scoundrels, and those who have no respect for the law. It’s like being a prosecutor without having to work for the government.

Ours is an adversarial legal system, meaning that some lawyer has to represent the guys on the other side (the cheaters, liars, and thieves). That guy’s job is totally different from mine. Rather than move the judicial process along to a fair and efficient conclusion, his job is to delay the justice system’s operation as much as possible. To do anything in his power to avoid that trial date where the truth will come out. He is the civil defense lawyer. NOTE: I don’t have anything against the civil defense bar. Many of its members are my friends. And I can’t really blame them for doing their job, which, unlike my own, comes with a steady paycheck.

One of the greatest justice-delaying weapons in the civil defense lawyer’s arsenal is Arbitration. If you’ve ever bought any product or service (except a residential mortgage loan) from a business in the past 20 years, you have signed a mandatory arbitration clause. Mandatory arbitration means that if the business screws you somehow – for instance by committing fraud, identity theft, selling you a product that explodes in your face or poisons you, etc. – you can’t take them to court. Instead, you have to go to arbitration. Most importantly, you cannot file a class action. So if a corporation screws you for only $250, you won’t be able to find a lawyer to represent you. If they defraud 10,000 people out of $250 (thereby profiting $2.5 million by fraud), nothing will happen to them.

Unsurprisingly, this drives people like me crazy. The idea that in the United States of America in 2015, you can make millions of dollars through fraud and get away with it by slipping 20 pages of ridiculous legalese into your contract is just absurd. I’m not alone. In 2009, Congress decided to do something about this. The Dodd-Frank Wall Street Reform Bill authorized the CFPB to conduct a gigantic, thorough study of arbitration clauses and empowered it to issue regulations limiting the use of arbitration in consumer finance – including class action bans.

Finally, after the CFPB study found what every lawyer already knows – that arbitration clauses and class action bans screw consumers – they have issued a proposed regulation prohibiting the use of class action bans. This is common sense and in accord with 90% of Americans’ idea of justice and fair dealing. But of course the industries who want to keep class actions from ever happening have thrown a major hissy fit. And they have paid their lawyers to write a bunch of lies and publish them.

Here’s what I’m talking about: An article by a partner at a major corporate firm had this to say:

“[A]rbitration could serve as a helpful complement to the CFPB’s complaint portal. More specifically, arbitration could be used to resolve those disputes that are not resolved through the complaint process.”

This is complete and utter bullshit. Everyone knows that arbitration clauses and class action bans save corporations money by keeping them from having to pay for things they do wrong that cost humans money. Otherwise their contracts wouldn’t be three feet long. But the shocking thing is that lawyers – who are ethically obligated not to disseminate false information – are willing to make false statements to regulators and the public just to appease their clients. An equivalent would be if, for instance, one of my clients asked me to write an article on this blog stating that any interest rate over 6% was illegal usury. That may have been the case in medieval Europe, but it isn’t true now. I would never publicly make a statement I knew was false.

But despite all of our ethical rules and professional standards, the fact remains that some lawyers get paid to lie. And that is why people think lawyers are full of it.