Substance, Process, and the Future of Class Arbitration

WILLIAM GOLDMAN 9/27/2011

For Educational Use Only

SUBSTANCE, PROCESS, AND THE FUTURE OF CLASS..., 9 Harv. Negot. L. Rev....

9 Harv. Negot. L. Rev. 409

Harvard Negotiation Law Review

Spring 2004

Case Comment

SUBSTANCE, PROCESS, AND THE FUTURE OF CLASS ARBITRATION

Peter J. Kreher Pat D. Robertson III

Copyright (c) 2004 Harvard Negotiation Law Review; Peter J. Kreher; Pat D. Robertson III

Introduction

In Green Tree Financial Corp. v. Bazzle, the U.S. Supreme Court heard arguments regarding the validity of classwide arbitration for the first time.

1 In a plurality decision, the Court recognized classwide arbitration as a permissible procedure under the Federal Arbitration Act (“FAA”), and empowered arbitrators to decide issues of class certification and whether ambiguously worded agreements allowed class arbitration. The decision calls into question defendants’ use of mandatory arbitration provisions to prevent class actions, 2 a practice that has grown in importance as companies look for new ways to insulate themselves from the dangers of class actions.

3

This comment will analyze the Bazzle decision in the context of the evolution of the Supreme Court’s interpretation of the

FAA. Part I will summarize the facts and the Court’s holding, Part II will describe how the decision fits into the framework of the developing federal common law surrounding the FAA, and Part III will examine potential implications of this decision.

We contend that Bazzle can be viewed as an attempt to fit class arbitration into the preexisting substance versus procedure dichotomy when contract language is ambiguous or silent. The decision also illustrates the Court’s balancing of *410 the normative values of adjudicatory efficiency with fairness to all parties involved as well as its growing faith in the ability of arbitrators to make complex legal decisions. Implicit in this confidence is a greater willingness to use the FAA to preempt state court rulings that seek to establish per se rules prohibiting agreements that bar class arbitration, especially when the language of the arbitration clause unambiguously and purposefully rejects class adjudication.

I. Green Tree Financial Corp. v. Bazzle

Since the mid-1960’s, the Supreme Court has continually strengthened its interpretation of the FAA to give arbitration agreements the same enforceability as other types of contracts.

4 Within this movement is an on-going debate over the power of arbitrators vis-à-vis trial judges in terms of who is the proper and binding authority to make legal determinations.

Generally, procedural issues are decided by an arbitrator while certain substantive issues are reserved for the courts.

Historically precedural issues have included such elements as statutes of limitations and estoppel, while substantive matters have encompassed such subjects as fraud in gaining assent to the arbitration clause. In Bazzle, the issues were where class certification fell in the procedure-substance division and to what extent the FAA could be used to preempt a state court’s interpretation of an arbitration agreement.

A. Facts & Procedural History

In 1995, Burt and Lynn Bazzle (“Bazzles”) signed a $15,000 home improvement loan contract with Green Tree Financial

Corp. (“Green Tree”) that contained a mandatory arbitration clause.

5 At the time of the loan, Green Tree failed to provide a legally required form that would have informed the Bazzles of their right to name their own lawyers and insurance agents for the transaction.

6

*411 In March 1997, the Bazzles filed a complaint in the Court of Common Pleas alleging that Green Tree violated the South

Carolina Consumer Protection Code by failing to provide the required form.

7 The Bazzles subsequently amended their

© 2011 Thomson Reuters. No claim to original U.S. Government Works. 1




complaint to include a request for class certification; Green Tree then filed a motion to compel arbitration.

8 In December

1997, the court granted class certification and compelled arbitration.

9 After Green Tree unsuccessfully appealed class certification and lost a motion to dismiss, a court-appointed arbitrator, in July of 2000, awarded the class approximately $10.9 million in damages, and approximately $3.6 million in attorney’s fees and costs.

10 The Bazzles filed a motion to confirm the award and Green Tree filed several counter-motions to vacate and remand the award.

11 The trial court confirmed the award and dismissed Green Tree’s motions.

12 The South Carolina Supreme Court granted certiorari to hear Green Tree’s appeal of the dismissal of its motions.

13

Concurrently with the Bazzle action, Daniel Lackey (“Lackey”) and George and Florine Buggs (“Buggses”) pursued a similar suit.

14 Lackey and the Buggses entered into financing agreements that lacked statutorily required provisions similar to those absent in the Bazzle case.

15 In May 1996, Lackey and the Buggses (“Lackey class”) commenced a class action suit in the

Court of Common Pleas on the same grounds as the Bazzles.

16 Lackey filed for class certification, and Green Tree filed for a motion to compel arbitration; Green Tree won its motion on appeal, but the trial court never rendered judgment on the motion for certification.

17

The parties then entered arbitration with the same arbitrator as the Bazzle class. The arbitrator certified the Lackey class in

January 2000 and eventually awarded the class $9.2 million in damages, and approximately $3.1 million in attorney’s fees and costs.

18 After the *412 trial court confirmed the award in December 2001, Green Tree appealed and the South Carolina

Supreme Court granted certiorari, consolidating the Lackey and Bazzle actions.

19

The state Supreme Court ruled that the arbitration agreements contained in the financing contracts were silent on the matter of class arbitration; therefore, as a matter of state law, the agreements permitted class arbitration.

20 The United States

Supreme Court granted certiorari to determine whether the state court’s ruling was consistent with the FAA.

21

B. Plurality Opinion

In a fragmented decision, the plurality remanded the case so the arbitrator “may decide the question of contract interpretation

- thereby enforcing the parties’ arbitration agreements according to their terms.” 22 Justice Breyer, writing for the plurality, ruled that the language of the arbitration clause neither clearly prohibited nor clearly allowed class arbitration.

23 Rather than attempting to resolve the ambiguity, Justice Breyer determined that this question was for the arbitrator to decide, as the parties agreed to submit to the arbitrator “[a]ll disputes, claims, or controversies arising from or relating to” the contract, and the propriety of class arbitration was a dispute arising from the contract.

24 Accordingly, under the FAA’s requirement that arbitration agreements be enforced according to their terms, the Court vacated the South Carolina Supreme Court’s holding and remanded the question of the agreement’s meaning to the arbitrator for further decision.

25

*413 C. Concurrence

Justice Stevens agreed with the plurality that the language in the arbitration contract was ambiguous, and, in theory, the arbitrator, rather than the trial judge, should have made the initial determination.

26 Justice Stevens believed that, since the

FAA does not prohibit class arbitration, the state Supreme Court properly applied South Carolina law.

27 Although certification arguably was made by the wrong decision-maker (the judge rather than the arbitrator), Stevens would nonetheless have affirmed the South Carolina court’s decision because the ruling was correct as a matter of law.

28 Despite his unique legal analysis, he concurred with the plurality in order to create a controlling precedent.

29

D. Dissent

The dissent differs markedly from the plurality on two levels. First, Chief Justice Rehnquist, writing for the dissent, interpreted the arbitration clause to constitute a complete bar on class arbitration. He interpreted the clause “one arbitrator selected by us with consent of you” to mean that Green Tree reserved the right to choose a different arbitrator for each of its claims.

30 Therefore, he argued that the decision of the South Carolina Supreme Court should be reversed because, by misinterpreting the clear language of the clause, it failed to enforce the agreement on its terms.

31 Second, and more essentially, Rehnquist stated that, even if the language was indeed ambiguous, the court, rather than an arbitrator, should resolve that ambiguity because of the issue’s substantive nature.

32

E. Thomas’ Dissent

Justice Thomas agreed with Justice Stevens that the South Carolina Court’s decision should be affirmed. His reasoning,





however, significantly diverged from the other Bazzle opinions because he argued that the FAA simply did not apply to proceedings in state court.

33 This ruling was consistent with several other dissents he *414 wrote in the previous cases such as Allied-Bruce Terminix Cos. v. Dobson and Doctor’s Associates, Inc. v. Casarotto.

34

II. Effect of Bazzle on the Federal Common Law’s Scope of Judicial Authority

While the various interpretations of the basic language of the arbitration clause strongly impacted the outcome of Bazzle, more crucial were the underlying rationales employed by each opinion. The plurality focused on arbitration’s aid to overall judicial economy and consequently conceived a broad scope of procedural matters to be properly settled by the arbitrator.

The dissent’s desire to both closely adhere to the FAA’s mandate to enforce an agreement on its terms and to protect the inferable interests of all parties, compelled the dissent to not only narrow the realm of procedure by categorizing class arbitration as a substantive issue for court determination, but to also overturn the South Carolina court’s interpretation of the contract.

The Bazzle opinions attempted to answer two questions which relate to the scope of judicial authority: (1) what issues of contract interpretation should remain in the purview of the court and which should be transferred to an arbitrator? and (2) if contract language is unclear, how (i.e. analytically) should it be interpreted?

A. Scope of Judicial Authority: Substance v. Process

Whether an issue is substantive or procedural became the central question in determining the forum for class certification for both the plurality and dissent. On a theoretical level both the plurality and dissent agreed that the arbitrator should determine matters of procedure and the judiciary, matters of substance. However, the plurality ruled that class certification was essentially procedural whereas the dissent argued it was substantive.

35 The terms “substance” or “procedure,” however, lose much of their meaning in this context because they are merely the labels used to describe a set of *415 legal issues that can be separated only through the balancing of preexisting normative values regarding judicial efficiency, personal autonomy, and the reach of the courts. This Part will analyze the plurality’s and dissent’s debate over the categorization of class certification as intrinsically substantive or procedural.

The plurality believed that “the relevant question here is what kind of arbitration proceeding the parties agreed to.” 36

“[A]rbitrators are well situated to answer that question” because they are more familiar with the arbitration process, the parties, and the facts involved.

37 In addition, the arbitrator should decide this case in particular because of the particular arbitration clause’s “sweeping language concerning the scope of the questions committed to arbitration ...”

38 The general presumption of arbitral decision-making should only be overcome if clear evidence exists that “the parties intended courts, not arbitrators, to decide a particular and arbitration-related matter . . .” 39

The plurality found its most relevant precedent in Howsam v. Dean Witter Reynolds, Inc., where the Court decided that a

National Association of Securities Dealers (“NASD”) arbitrator ought to determine whether the statute of limitations on a complaint had run according to the terms of the arbitration agreement.

40 The Howsam Court divided gateway matters into two categories: “questions of arbitrability,” which fall under the purview of the court due to their more legally substantive nature, and questions for the arbitrator, which are usually procedural in nature.

41 In applying the Revised Uniform Arbitration

Act of 2000 that stated that the arbitrator should determine issues that are “conditions precedent” to arbitration, the Court listed several of these conditions, such as “time limits, notice, laches, [and] estoppel.” 42 The Court reaffirmed that time limits are not a “matter of arbitrability” but a “condition precedent,” and therefore, one of the gateway matters falling within the purview of the arbitrator.

43 Similarly, class certification in Bazzle concerned “neither the validity of the arbitration clause nor its applicability to the underlying dispute between the parties,” nor did it concern “a *416 state statute or judicial procedures;” therefore, certification is procedural.

44 Certification, by extension, thus resembles a “condition precedent” more than a “matter of arbitrability” and should be adjudicated by an arbitrator.

The dissent opposed the plurality’s categorization of class certification as procedural. Placing great significance on the choice of arbitrator, the dissent believed that class arbitration removes this right from one of the parties who must abide by one arbitrator’s decision for a multitude of claims.

45 The Chief Justice wrote that class arbitration is a matter of substance since

“just as fundamental to the agreement of the parties as what is submitted to the arbitrator is to whom it is submitted.”

46 This equation of “what” and “whom” is a vital logical step in the dissent’s argument because “the decision of what to submit to the arbitrator is a matter of contractual agreement by the parties, and the interpretation of that contract is for the court, not for the





arbitrator.” 47 The dissent thus defines class arbitration as a matter of the essential substance of the agreement, and, more importantly, of a more fundamental contract dispute that underlies procedure.

The dissent cited as its primary source of law First Options of Chicago, Inc. v. Kaplan, declaring it more applicable to Bazzle than the Howsam decision.

48 In First Options, the Supreme Court, in a unanimous opinion, overruled an arbitrator’s award unfavorable to the Kaplans because they did not agree to submit themselves personally to a “workout” agreement pertaining to debts incurred by their company.

49 The fact that only the Kaplans’ corporate entity signed the documents with an arbitration requirement meant the Kaplans as individuals did not clearly submit themselves to arbitration.

50 As a result of this ambiguity, the Court found that to force the Kaplans to submit to arbitration in the first place violated the terms of the contract and that any award thereafter could not be enforced.

51 Similarly, the Bazzle dissent feared parties would be forced to arbitrate issues that they did not intend to arbitrate, 52 thereby violating the *417 terms of the contract. In contrast to the plurality’s preference for judicial economy in using the arbitrator to make a broad range of decisions, the dissent placed greater weight on the parties’ set of inferable interests. The dissent found that the defendant reasonably sought to insulate itself from “the risk of substantial damages awards [being] in the hands of a single arbitrator.” 53

The unanimity of the First Options opinion (as well as much of the language of Howsam) established a facially simple rule. If something is truly a “question of arbitrability,” the parties should expect the courts to decide the issue.

54 On the other hand, if the controversy appears to deal with the dispute-resolving procedure, then the parties should expect the arbitrator to decide.

While the fairness of any such rule based on an assumption of the parties’ knowledge of the law may be questionable, the idea of using precedents to ex-ante alert future parties as to what will be considered the default rules remains one of the staples of contract law.

55

Despite the evidence of a fairly clear rule determining who should examine which theoretical category of issues, the plurality decided that the arbitration clause’s broad language referring to virtually all claims arising from the contract to the arbitrator removed the issue of class certification from the court’s purview.

56 The dissent, conversely, found that the issue of how the arbitrator is selected, or its corollary, whether Green Tree can select different arbitrators for each claim in order to diversify its risk of adverse judgments, is a matter of substance, “more akin to the agreement as to what shall be arbitrated, a question for the courts.” 57 The debate in Bazzle highlights how the outcome of every disputed issue will depend on each Justice’s preexisting notions of the issue’s importance and categorization as a matter of essential substance or procedure.

B. Scope of Judicial Authority: Interpretation of Ambiguity

How should the necessary clarification be made in determining the aim of a contract if its language is unclear as to the parties’ intent? Both the plurality’s and dissent’s answers to this question lead back to their central disagreement about who should interpret contracts. While more clearly drafted language may have resolved the *418 Bazzle dispute in a lower court, the plurality’s and dissent’s conflicted balancing of the normative values of efficiency and equity, which underlie the substance-procedure debate, largely obviates any dispositive effect of a textualist reading of text which is arguably ambiguous.

The Federal Arbitration Act provides statutory guidance in dealing with arbitration contracts in that “Congress’ principal purpose [was to] ensur[e] that private arbitration agreements are enforced according to their terms.” 58 The Court’s emphasis on reviewing the terms of the contract moved away from its traditional application of the statute or precedent towards enforcing terms. The plurality and dissent held divergent views on the proper framework with which to view arbitration clause interpretation. While both attempted to follow the FAA’s mandate, the plurality remained rooted in the language of the arbitration clause and its deference to the arbitrator, while the dissent seemed to take a more a priori stance favoring judicial review leading them to believe that courts are the proper venue. But despite this disagreement, both opinions showed a striking similarity in their willingness to introduce normative reasoning to support their respective categorizations of issues as procedural or substantive. This evolution becomes most clear in analyzing two arbitration cases the plurality and dissent draw upon - Volt Information Sciences v. Stanford University and Mastrobuono v. Shearson Lehman Hutton.

59 These cases resulted in virtually contrary rulings on the issue of state law provisions in arbitration contracts, but the evolution from Volt’s strict interpretational methodology to Mastrobuono’s focus on the parties’ intent, illustrates a notable aspect of the way the

Court will resolve ambiguous language such as that used in Bazzle.

60

Volt and Mastrobuono both involved parties disputing the importance of state choice of law provisions in arbitration clauses.

In Volt, a contractor wanted to compel arbitration per its contract with Stanford University, which filed a motion staying arbitration pending related litigation with other contractors.

61 The Court ruled that California law supported Stanford’s position, and since both parties had consented to the choice of law provision naming California as the relevant jurisdiction,





the judiciary was restricted by the clear terms *419 of the contract.

62 Essentially, the Court allowed parties to opt out of FAA provisions by including a state choice of law provision that allowed a stay of arbitration where the FAA on its own would not.

63

In Mastrobuono, an investor’s suit against a brokerage firm for mishandling his account resulted in arbitration in which the arbitrator awarded punitive damages. The defendant argued that the arbitrator’s award of punitive damages should be vacated because the agreement contained a New York choice of law provision, and New York law barred arbitrators from awarding punitive damages.

64 The Court interpreted other provisions of the contract to allow punitive damages and upheld the arbitrator’s award as “within the scope of the contract,” effectively invalidating that element of the state choice of law provision.

65

The Court came to these contradictory decisions because of a philosophical difference in determining the parties’ intent. Even though both cases involved interpreting the effects of state law provisions in an attempt to enforce agreements on their terms, the Volt Court relied on a literal interpretation of the contract language whereas the Mastrobuono Court concentrated on the intent and motivations of the parties.

The Volt Court reasoned that, since the parties are “at liberty to choose the terms under which they will arbitrate,” all of their intent should be contained in the wording of the contract.

66 The strength given to contract language also derives from the theory that arbitrating parties lack preexisting rights that are not addressed in their contract. In a discussion about whether a party had waived an FAA-guaranteed right, the Court ruled that, “it had no such right in the first place, because the parties’ agreement did not require arbitration to proceed in this situation.” 67 Taking these considerations into account, the Volt Court stood firmly in a tradition of rigid contract interpretation which the Court took upon itself to provide.

Mastrobuono contains a more comprehensive interpretation of the language contained in the contract. Ambiguity obviously exists - the state law agreed upon in the choice of law provision contradicted *420 the NASD rules which the parties agreed would govern the arbitration.

68 The Court here approached its decision on two grounds. First, and consistent with Volt, it parsed out the plain meaning of the language and the logical paradox of following the respondent’s interpretation.

69

Second, and more holistically than Volt, the Mastrobuono Court considered the parties’ motivations and intent. The respondent’s position was met partially by a logical and normative critique, since “[r]espondents drafted an ambiguous document, and they cannot now claim the benefit of the doubt. The reason for this rule is to protect the party who did not choose the language from an unintended or unfair result.” 70 The Court implied that the party in the weaker bargaining position must be shielded not only from results accidental or “unintended,” but those strategically planned and “unfair.” 71

Furthermore, the Court made an explicit assumption about the plaintiff’s knowledge and intent:

As a practical matter, it seems unlikely that petitioners were actually aware of New York’s bifurcated approach to punitive damages, or that they had any idea that by signing a standard-form agreement to arbitrate disputes they might be giving up an important substantive right. In the face of such doubt, we are unwilling to impute this intent to petitioners.

72

Although the Court’s general tendency to interpret contracts as valid and the nuanced technical reading of the specific provisions are both essential in understanding this outcome, the emphasis on normative values and a concern for plaintiffs’ rights and parties’ intent represent a significant departure from the literalist Volt analysis.

73

The Bazzle plurality and dissent initially attempted to frame their decisions as strict language interpretation like Volt, but eventually turned to normative reasons as in Mastrobuono to support their theoretically dispositive procedural or substantive holdings. The plurality and dissent alike proclaimed they were doing nothing but enforcing the arbitration clause per its own language as an interpretation of the parties’ intent.

74 While both looked at the language, the plurality only went so far as to say that it was unclear, *421 while the dissent found that it unambiguously supported the defendant.

75 However, the surprising change from Volt was that both sides used normative and preexisting reasons to buttress their categorization of class certification as procedural or substantive. The plurality, while engaging in a discussion of the language of the contract, raised the argument that since the matter before them “concern[ed] contract interpretation and arbitration procedures,” it was naturally more efficient for the arbitrator to address it.

76 In addition, the plurality argued that, given the wide scope of issues the arbitration clause deferred to the arbitrator, the parties may well have expected an arbitrator to decide such a matter.

77

The dissent’s normative argument for finding intent centered more on fairness and party autonomy than on efficiency. The dissent argued that the corporate party may wish to diversify its risk rather than concentrate the possibility of “substantial damages awards in the hands of a single arbitrator.” 78

III. Implications of Bazzle





A. Importance of Bazzle

Bazzle remains important for two reasons. First, the case represents a significant departure on several levels from prior rulings on class arbitration. Second, the opinion provides a clear example of the Court rather openly employing normative values to support what was framed as a disagreement over legal theory. While in this case, each side referenced efficiency and fairness in its debate over substance and procedure, the existence of these policy concerns and their relative importance in the debate, aid in predicting how the court will rule on future arbitration issues.

As discussed above, arbitration as a means of adjudicating disputes has exploded in the last few decades. However, class arbitration has consistently, and largely successfully, been avoided by corporate defendants.

79 Federal courts have generally ruled that plaintiffs cannot proceed as a class under agreements that are silent on the availability of class actions unless both parties consent to such procedures.

80 The Bazzle decision overrules this line of cases by *422 allowing an arbitrator to certify a class when an agreement is silent or ambiguous on that issue.

81

The Court’s decision to allow arbitrators to initially address contractual interpretation in this way represents a significant departure from the prevalent trend in judicial thought. Appellate courts traditionally agreed that determination to certify a class should lie with trial courts rather than arbitrators 82 for a number of reasons, including concerns about due process rights for the unrepresented class members, 83 the logistics of certifying classes, 84 and a desire to maintain the judiciary’s greater power in matters such as discovery.

85 Furthermore, “the old common law hostility toward arbitration, and the failure of state arbitration statutes to mandate enforcement of arbitration agreements,” required the power and legitimacy of the federal judiciary to meet the Congressional goal of making arbitration a viable process.

86 The decision in Bazzle reverses the historical trend of court involvement, while still supporting the efficacy of the arbitration process: not only did the court remand the case with the instruction that the arbitrator should make the decision, but also held that the arbitrator needed to rethink class certification explicitly without the influence or direction of the trial court.

87

By deeming the arbitrator the appropriate party to make decisions such as class certification, Bazzle illustrates two tendencies. First, matters of procedure (the plurality’s rationale for choosing the arbitrator as the proper adjudicatory entity) may encompass a larger percentage of disputes than previously believed. Second, and more *423 subtly, Bazzle implies that arbitrators are qualified to make complex legal decisions, such as the certification of a class of plaintiffs, and that therefore courts should, at least at the beginning of the dispute, confine itself to enforcing an agreement on its terms.

88

B. The Unanswered Question: Are Complete Bans on Classwide Arbitrations Unenforceable?

It is quite likely that defendants will quickly change the language of their arbitration agreements to render much of the previous discussion moot with respect to class arbitration. Defendants use arbitration agreements, at least in part, to prevent class proceedings.

89 Therefore, if possible, they will avoid writing agreements that are silent or ambiguous as to class arbitration in order to prevent an unfavorable interpretation by an arbitrator. Defendants that have not already expressly banned class arbitration will likely quickly move to do so.

The question left unanswered in Bazzle is whether a complete ban on classwide arbitration could be unenforceable as an unconscionable agreement under state law. It is likely that the Court will hold that any per se rule that holds “no class action” arbitration agreements to be unconstitutional is preempted by the FAA because such a rule would fail to determine whether, on the facts of each case, the plaintiff’s rights could still be vindicated in an arbitral forum even without the availability of class certification.

An analysis of the unconscionability issue is fundamentally different than that examined in Bazzle because it goes to the enforcement of a clear arbitration clause rather than the interpretation of an ambiguous or silent provision. The Court cannot escape this question by pushing it to the arbitrator, as the plurality did in Bazzle, because a question of enforceability is necessarily one for the courts to decide.

90 Ironically, by writing more explicit arbitration provisions, *424 drafters necessarily include the courts in the arbitration process, an outcome an arbitration provision is meant to avoid.

This section will (1) review previous Supreme Court holdings to place this question in its proper context; (2) examine relevant state and lower federal court opinions; (3) predict a decision by the Supreme Court on this issue and what impact such a decision will have on parties who use arbitration agreements; and (4) discuss a legislative alternative.

1. The Supreme Court’s Treatment of Arbitration Agreements

The Supreme Court has long held that the primary purpose of the FAA is to enforce arbitration agreements on their terms,





thereby placing the agreements on the same footing as contracts.

91 The interpretation of contracts is a state law question; therefore, arbitration agreements are interpreted under applicable state statutes.

92 Accordingly, standard contract defenses such as fraud, duress, or unconscionability can be applied to invalidate arbitration agreements.

93 These exceptions to enforceability coincide with the FAA’s admonition that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 94 With respect to unconscionability claims in particular, the Court has clearly stated that the standards used to evaluate arbitration agreements must be the same as those used to examine other types of contracts.

95 Unenforceability arguments based on contract theories are one of the few potentially anti-arbitration areas of state law that the FAA has not yet preempted. The Court deliberately left open such arguments to allow states to protect their citizens against “unfair pressure” to assent to an arbitration agreement.

96

In Bazzle, the Chief Justice seemed eager to cut away even more state authority in the arbitration context. By arguing that the

South Carolina Supreme Court’s interpretation of the parties’ arbitration clause was clearly erroneous and should be overruled, the Chief Justice implicitly used the FAA’s preemption powers to place arbitration *425 agreements on a more privileged footing than other contracts.

97 The Chief Justice would never reinterpret other ambiguous clauses in the contract because contract law is a state matter, but he was willing to engage in an interpretational exercise on the ambiguous arbitration provision because of the FAA’s directive to enforce agreements according to their terms. One valid interpretation of this FAA directive would be to leave the interpretation of unclear terms to state courts, as such decisions are chiefly matters of contract interpretation. The Chief Justice rejected this approach in favor of a more interventionist posture that essentially makes the interpretation of an arbitration agreement not only a state issue, but a federal question as well. Whether

Chief Justice Rehnquist opened the door for further federal intervention in arbitration agreement interpretation remains to be seen, but his reasoning lays the foundation for superceding the traditional interpretative role of state courts and threatens to make arbitration agreements nearly impervious to state scrutiny.

The plurality recognized this incongruity in Chief Justice Rehnquist’s opinion when it noted that “[t]he Chief Justice believes that Green Tree is right; indeed that Green Tree is so clearly right that we should ignore the fact that state law, not federal law, normally governs such matters...” 98 Justice Stevens in his concurrence noted that South Carolina could rule as a matter of state law that the agreement was silent and silent agreements allow classwide arbitration because “[t]here is nothing in the

Federal Arbitration Act that precludes either of these determinations...” 99 In order to prevent the potential inconsistencies among federal and state courts described below, the Supreme Court will likely hear a representative case to determine whether the FAA preempts a state court ruling that a “no class action” provision in an arbitration agreement is unconscionable because the decision fails to enforce an agreement according to its terms.

2. State and Lower Federal Courts’ Treatment of Arbitration Agreements

Determinations of unconscionability are generally a matter of state law; therefore, state courts must take the lead in determining whether agreements banning classwide arbitration are unenforceable. Generally, state courts have been unsympathetic to this *426 argument.

100 There have been, however, a few exceptions in which a “no class action” provision was a factor in judicial determination of unconscionability.

101 Most interesting are a line of California cases that aggressively used unconscionability to declare “no class action” agreements unenforceable.

102 In Szetela v. Discover Bank, a California state appellate court found a “no class action” provision in an arbitration agreement to be unconscionable because, even though it was styled as a mutual prohibition on class actions, Discover would never sue its customers in class action litigation.

103 After

Szetela, another California appellate court considered the same arbitration provision in a different case and explicitly rejected

Szetela, finding that § 2 of the FAA preempted any state law finding that a “no class action” provision was unconscionable.

104 The issue is now on appeal before the California Supreme Court.

105

Relying on state court opinions that have found “no class action” provisions in arbitration agreements enforceable, the federal court of appeals are nearly unanimous in upholding such agreements.

106 The Ninth Circuit, however, has twice relied on

Szetela to find arbitration *427 agreements unenforceable at least in part because they contained “no class action” provisions.

107 As unconscionability arguments regarding mandatory arbitration agreements increase among plaintiffs, 108 uncertainty over the validity of such agreements may cause companies to discontinue their use or seek alternative means of reducing litigation costs.

109

3. Likely Supreme Court Ruling

The Supreme Court has long displayed an unwillingness to let state public policy interfere with otherwise valid agreements to arbitrate.

110 In Green Tree Financial Corp.-Alabama v. Randolph, the Court explored the outer bounds of arbitration agreements that were enforceable under the FAA.

111 The FAA serves its purpose as long as a prospective litigant can





vindicate his/her rights in arbitration.

112 By opining that, in theory, large arbitration costs could invalidate an arbitration agreement because such costs would effectively prevent a plaintiff from vindicating his/her rights, 113 the Court sketched a test *428 which courts can use to determine the validity of an agreement’s provisions. When joined with the FAA’s primary purpose of enforcing agreements on their terms, this test becomes one whereby all arbitration agreements must be enforced unless the agreement’s provisions create a forum in which the plaintiff cannot effectively bring his claim.

While Chief Justice Rehnquist now appears readily willing to overturn erroneous state court decisions regarding arbitration, the Bazzle plurality is also willing to limit state authority by investing arbitrators with decision-making power that had previously belonged to state courts. Both the Bazzle plurality and dissent, for very different reasons, seek to limit the extent to which states can influence the arbitration process. While the dissent does argue that class certification is a “substantive” matter and should be decided by the courts, a state court acting in this capacity must interpret an ambiguous contract in light of federal interpretational guidelines.

114 As discussed above, the dissent nominally allowed state courts to keep their interpretational power, but, through the FAA’s preemption authority, introduced federal oversight whereby the Supreme

Court could overrule a decision that, at least in the Court’s view, fails to enforce an agreement according to its terms.

115

Unconscionability arguments are always fact specific and turn on the merits of each case; therefore, there may be instances where a “no class action” provision could be struck down. The analysis, however, must focus on the plaintiff’s ability to assert his rights in arbitration rather than the relative benefits of such provisions to either party. In Szetela, the court omits any analysis of whether individual claims could be brought in arbitration.

116 Instead, the court focuses on the benefits to the defendant of the no class action provision and the perceived detriments to the plaintiff.

117 By assuming that most plaintiffs will choose not to assert their claims in arbitration, the court concludes that consumers have no effective forum in which to seek redress.

118 This conclusion, however, assumes that arbitration agreements must provide a forum that most plaintiffs would seek to use. This is not the case. Arbitration must only provide a forum where plaintiffs can vindicate their rights; i f they choose not to use that forum because their perceived benefit is slight, that does not *429 mean the forum is inadequate.

119 As Randolph indicates, any state law interpretation that, like Szetela, focuses on the perceived benefits or detriments of a specific provision rather than the adequacy of the forum created, will not likely withstand scrutiny in light of the Court’s avowed desire to enforce arbitration agreements on their terms.

120

If the Court strikes down complete bans on class actions, it is likely to appropriate the reasoning used by the dissent in Bazzle to justify overruling the South Carolina Supreme Court’s contract interpretation.

121 Unconscionability is, in essence, a matter of contract interpretation in the context of circumstances surrounding the agreement’s formation. While the Court will undoubtedly claim that it is merely fulfilling its statutory mandate to enforce arbitration agreements on their terms, its decision may implicitly create a federal common law doctrine regarding unconscionability of arbitration agreements. The three dissenting Justices in Bazzle have already demonstrated that they will not likely be deterred from meddling in state law interpretations when such interpretations would invalidate, in whole or in part, express clauses of an arbitration agreement.

Effectively, the Court would be continuing its longstanding effort to insulate arbitration agreements from state law provisions that fail to enforce agreements on their terms.

4. A Legislative Alternative

Assuming the Court continues to rigorously enforce arbitration agreements that ban class actions as long as they maintain an

*430 adequate forum, any movement towards less expansive enforcement of arbitration agreements must come from

Congress.

122 In a dispute that garners compelling arguments from either side, the legislature is uniquely situated to correct any inequities that the law has created.

123 There is evidence that Congress has taken note of the debate and is considering action.

124 By either revising particularly important statutes to preclude waivers of judicial remedies or amending the FAA to exempt certain types of agreements, Congress can more adequately meet the needs of reform than any piecemeal attempt to regulate arbitration by a divided Supreme Court.

Conclusion

The Bazzle case is an important step in the Court’s treatment of class arbitration for three reasons. First, by endorsing the competence of the arbitrator to make complex legal decisions, and by recognizing the judicial economy in allowing him or her to make such a decision, the plurality’s opinion represents an important victory for the autonomy of the arbitration process. Second, while the debate over substance and process is far from resolved, the Court’s willingness to incorporate normative values to supplement or even supplant abstract legal theory demonstrates an evolution from its earlier analytical practices. Third, while the question of the Court’s behavior when contract language is unambiguous or even silent may





arguably be predictable, the Court’s reaction to language that clearly prohibits class arbitration may be materially different.

Despite the invocation of normative elements to interpret an agreement, the plurality and dissent clearly support the FAA’s mandate to enforce an arbitration clause on its terms. This may result in overturning any future per se state rules that categorize “no class action” provisions as unconscionable.

Footnotes

1 Green Tree Fin. Corp. v. Bazzle, 123 S. Ct. 2402 (2003) .

2 See Edward Wood Dunham, The Arbitration Clause as Class Action Shield, 16 Franchise L. J. 141 (1997) (providing an argument for the use of mandatory arbitration to avoid class actions). See also Robert B. Kershaw, Mandatory Binding Arbitration -

Goliath’s New Defense, 36-AUG Md. Bar J. 28 (2003); Robert M. Jaworski & Henry M. Cronk, Mortgage Lenders’ New

Regulator: The Plaintiff’s Bar, 57 Bus. Law. 1275, 1279 (2002) ; Carroll E. Neesemann, Yes: Permitting Courts to Strike Bar on

Class Actions in Otherwise Clean Clause Would Discourage Use of Arbitration, 8 No. 3 Disp. Resol. Mag. 13, 15 (2002) ; Alan S.

Kaplinsky & Mark J. Levin, Excuse Me, But Who’s the Predator?, 7-JUN Bus. L. Today 24, 25-26 (1998).

3 For a review of arguments against class actions and a rebuttal to those arguments, see Charles Silver, “

We’re Scared to Death”:

Class Certification and Blackmail, 78 N.Y.U. L. Rev. 1357 (2003) .

4 For a comprehensive review of the history of the legal status of arbitration agreements in the United States, see generally Roger S.

Haydock & Jennifer D. Henderson, Arbitration and Judicial Civil Justice: An American Historical Review and a Proposal for a

Private/Arbital and Public/Judicial Partnership, 2 Pepp. Disp. Resol. L.J. 141 (2002) ; Stephen L. Hayford, Unification of the Law of Labor Arbitration and Commercial Arbitration: An Idea Whose Time Has Come, 52 Baylor L. Rev. 781 (2000) .

5 Bazzle v. Green Tree Fin. Corp., 569 S.E.2d 349, 352 (S.C. 2002) , vacated, 123 S. Ct. 2402 (2003) . For relevant text of the arbitration agreement, see Bazzle, 123 S. Ct. at 2405 .

6 Id.

7 Id.

8 Id.

9 Green Tree, 569 S.E.2d at 352 .

10 Id. at 353.

11 Id.

12 Id.


14 See id.





15 Id.

16 Id.


18 Id. at 354.

19 Id.

20 Id. at 359.

21 Green Tree Fin. Corp. v. Bazzle, 123 S. Ct. 2402, 2404 (2003) .

22 Id. at 2408.

23 The pertinent section of the arbitration clause states,

All disputes, claims, or controversies arising from or relating to this contract or the relationships which result from this contract ... shall be resolved by binding arbitration by one arbitrator selected by us with consent of you. This arbitration contract is made pursuant to a transaction in interstate commerce, and shall be governed by the Federal Arbitration Act ...

Id. at 2405.

24 Id. at 2407.

25 Bazzle, 123 S. Ct. at 2408.

Even though an arbitrator certified the Lackey class, the Court held that the trial court’s ruling in the

Bazzle action likely influenced the arbitrator’s decision. The court remanded the Lackey case as well so that the arbitrator could decide the issue without undue influence of a court decision. Id. at 2407.

26 Id. at 2408

27 Id.

28 Bazzle, 123 S. Ct. at 2408 .

29 Id.

30 Id. at 2410-11.

31 Id. at 2411.

32 Bazzle, 123 S. Ct. at 2409 .





33 Id. at 2411.

34 Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995)

; Doctor’s Associates, Inc. v. Casarotto, 571 U.S. 681 (1996). Justice

Thomas’ dissent will not be discussed in depth in this comment because his theory regarding the inapplicability of the FAA is present in many of his opinions and does not address the primary debate of substance versus procedure or the normative values called upon by the plurality or dissent. While the plurality and dissent do incorporate normative values in their holdings in debating procedure and substance, and ultimately the proper arbiter of class certification, their analyses show a greater willingness to engage in the facts of the situation at hand rather than arguing on an abstracted theoretical level.

35 Bazzle, supra note 20, at 2407, 2409-10.

36 Id. at 2407.

37 Id.

38 Id.

39 Bazzle, 123 S. Ct. at 2407 .

40 Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 86 (2002) .

41 Id. at 83 (italics removed).

42 Id. at 85 (italics removed).

43 Id.

44 Bazzle, 123 S. Ct. at 2407 .

45 Id. at 2411.

46 Id. at 2409.

47 Id.

48 Bazzle, 123 S. Ct. at 2409 .

49 First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947 (1995) .





50 Id. at 941.

51 Id. at 947.

52 Bazzle, 123 S. Ct. at 2409 (quoting First Options, 514 U.S. at 945) .

53 Bazzle, 123 S. Ct. at 2411 .

54 Howsam, 537 U.S. at 83-84 .

55 See generally discussion of ex-ante perspective in Robert E. Scott & Jody S. Kraus, Contract Law and Theory (3d ed. 2003).

56 Bazzle, 123 S. Ct. at 2407 .

57 Id. at 2410.

58 Volt Info. Sci., Inc. v. Bd. of Trs. of the Leland Stanford Jr. Univ., 489 U.S. 468, 478 (1989) .

59 See id.; Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995) .

60 See Mastrobuono, 514 U.S. at 57-58; Volt, 489 U.S. at 468 .

61 Volt, 489 U.S. at 470 .

62 Id. at 479.

63 Id.

64 Mastrobuono, 514 U.S. at 55 .

65 Id. at 64.

66 Volt, 489 U.S. at 472 (quoting Bd. of Trs. of the Leland Stanford Jr. Univ. v. Volt Info. Sci., Inc., 240 Cal. Rptr. 558, 561 (Cal.

Ct. App. 1987) ).

67 Id. at 475.






69 Id. at 63.

70 Id.

71 Id.


73 Id. at 62-63.

74 Bazzle, 123 S. Ct. at 2407, 2409 .

75 Id. at 2406.

76 Id. at 2407.

77 Id.

78 Bazzle, 123 S. Ct. at 2411 .

79 See supra note 2.

80 See, e.g., Champ v. Siegel Trading Co., 55 F.3d 269, 274 (7th Cir. 1995) (discussing similar holdings by the Second, Fifth, Sixth,

Eighth, Ninth, and Eleventh Circuits). The First Circuit, however, held that state law provisions allowing class arbitration did not violate the FAA if an agreement was silent on the issue. New England Energy Inc. v. Keystone Shipping Co., 855 F.2d 1, 5 (1st

Cir. 1988) . State courts have generally come to the same conclusion as the majority of the circuit courts of appeals. However,

Pennsylvania and California agree with the First Circuit. See Dickler v. Shearson Lehman Hutton, Inc., 596 A.2d 860, 865 (Pa.

Super. Ct. 1991) ; Keating v. Superior Ct., 645 P.2d 1192 (Cal. 1982) rev’d on other grounds sub nom. Southland Corp. v.

Keating, 465 U.S. 1 (1984) .

81 Bazzle, 123 S. Ct. at 2406-07.

Even the dissent indicates that a truly silent agreement would not necessarily preclude a court from certifying a class. Id. at 2410.

The Fifth Circuit recently applied Bazzle in exactly this manner. See Pedcor Mgmt. Co. v. Nations

Personnel of TX, Inc., 343 F.3d 355, 363 (5th Cir. 2003) .

82 See supra note 80; see generally Jean R. Sternlight, As Mandatory Binding Arbitration Meets the Class Action, Will the Class

Action Survive?, 42 Wm. & Mary L. Rev. 1 (2000) .

83 Sternlight, supra note 82, at 52.

84 Id. at 49.

85 Note, Classwide Arbitration: Efficient Adjudication or Procedural Quagmire?, 67 Va. L. Rev. 787, 800 (1981) .





86 Southland Corp. v. Keating, 465 U.S. 1, 14 (1984) .

87 Bazzle, 123 S. Ct. at 2408 .

88 Id. at 2407.

For an argument against the ability of arbitrators to make these types of decisions, see Keating, 645 P.2d at 1215-17

(Richardson, J., dissenting).

89 See supra note 2.

90 In Prima Paint Corp. v. Flood & Conklin Mfg. Co., the Supreme Court endorsed the “separability” doctrine whereby claims attempting to void an arbitration clause due to fraud, unconscionability, or similar defenses go to the very making of the arbitration agreement itself and are for a court to decide. However, similar claims attempting to void the contract as a whole are matters for an arbitrator to decide. 388 U.S. 395, 403-404 (1967) . In the “no class action” provision hypothetical analyzed here, the unconscionability claim would be directed at the arbitration clause itself, not the contract as a whole, making it a decision for a court rather than an arbitrator.

91 See Volt, 489 U.S. at 474 .

92 See id. (adding a state choice of law provision that contradicts the FAA is usually precluded). See also discussion supra, Part

II.B., concerning Volt and Mastrobuono.

93

See Doctor’s Assocs., Inc. v. Casarotto, 571 U.S. 681, 687 (1996).

94

9 U.S.C. § 2 . This provision also illustrates Congress’ intention to place arbitration agreements on the same legal footing as other contracts.

95 Perry v. Thomas, 482 U.S. 483, 497 n.9 (1987) .

96 Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 281 (1995) .

97 Bazzle, 123 S. Ct. at 2411 (Rehnquist, C. J., dissenting).

98 Id. at 2406.

99 Id. at 2408.

100 Alan S. Kaplinsky & Mark J. Levin, The

Gold Rush of 2002: California Courts Lure Plaintiffs’ Lawyers (But Undermine Federal

Arbitration Act) By Refusing to Enforce “No-Class Action” Clauses in Consumer Arbitration Agreements, 58 Bus. Law. 1289,

1290-1291 (May 2003) .

101 See Powertel, Inc. v. Bexley, 743 So. 2d 570 (Fla. Dist. Ct. App. 1999) ; State ex. rel. Dunlap v. Berger, 567 S.E. 2d. 265 (W. Va.





2002) ;

102 See generally 19 No. 8 Term. of Employment Bulletin 5 for an overview of California unconscionability doctrine as applied to binding arbitration agreements.

103 118 Cal. Rptr. 2d 862, 867 (Cal. Ct. App. 4th 2002) , cert. denied, 537 U.S. 1226 (2003) . In Szetela, the court held that the no-class action provision provided the customer with no benefit whatsoever; to the contrary, it seriously jeopardized customers’ consumer rights by prohibiting any effective means of litigating Discover’s business practices. Id. at 868. In a second case before the same California appellate division, the court relied on Szetela to invalidate a no class action provision as unconscionable under Nevada law. See

Mandel v. Household Bank (Nevada), Nat’l Assn., 129 Cal. Rptr. 2d 380 (Cal. Ct. App. 4th 2003)

, cert. granted, 65 P.3d 1284 (Cal. 2003) . The court held that “Nevada mirrors California in its analysis of unconscionability, and we assume the result in Szetela would be the same had Nevada law applied.” Id. at 386 (citation omitted).

104 Discover Bank v. Superior Court, 129 Cal. Rptr. 2d 393, 396 (Cal. Ct. App. 2nd 2003) , cert. granted 65 P.3d 1285 (Cal. 2003) .

105 The California Supreme Court granted certiorari to both Discover Bank, 129 Cal. Rptr. 2d at 396, and Mandel., 129 Cal. Rptr. 2d at 380 .

106 Kaplinsky & Levin, supra note 101 at 1290-91. Federal courts, however, have recognized other grounds on which to invalidate arbitration agreements. See, e.g., Shankle v. B-G Maint. Mgmt. of Colo., Inc., 163 F.3d 1230, 1234 (10th Cir. 1999) (holding that an excessive fee splitting arrangement in an arbitration agreement caused arbitration to fail the “adequate forum” assumption underlying the Supreme Court’s decision in Gilmer). See

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991) .

107 See Ting v. AT&T, 319 F.3d 1126 (9th Cir. 2003) , cert. denied 124 S. Ct. 53 (2003) ; Ingle v. Circuit City Stores, Inc., 328 F.3d

1165 (9th Cir. 2003) , cert. denied 72 U.S.L.W. 3486 (2004) . The arbitration agreement examined in Ting contained multiple unconscionable elements, but the court seems to indicate that the class action bar alone would be enough to constitute substantive unconscionability under California law. Ting 319 F.3d at 1150.

Similarly, Ingle reviewed an agreement rife with unconscionable elements but indicates that the class action bar alone would be enough to constitute substantive unconscionability absent a showing of business necessity. Ingle 328 F.3d at 1175.

The Ting decision also caused a circuit split over a related issue: whether the Communications Act preempts state law unconscionability claims. The Seventh Circuit, in Boomer v. AT&T, analyzed the same arbitration agreement considered in Ting, but did not reach the unconscionability issue because the Communications Act preempted such claims. 309 F.3d 404, 423 n.11 (7th Cir. 2002) .

108 Professor Jean. R. Sternlight has stated that such arguments have already begun to increase as binding arbitration becomes more common. See

Stephanie Francis Cahill, Pushing the Arbitration Envelope: Circuits Split on States’ Power Over Mandatory

Agreements, 2 No. 7 A.B.A. J. E-Report 1 (Feb. 21, 2003) .

109 A decision by the Supreme Court forbidding class arbitration waivers may cause companies to reconsider the advantages of arbitration because both cost savings and risk allocation issues will change under a class arbitration regime. See Kaplinsky &

Levin, supra note 100, at 1298-99.

110 See, e.g., Keating, 465 U.S. at 1 (holding that the FAA preempts California statute requiring judicial consideration of claims). To the extent that Szetela relies on such arguments, they will clearly be preempted by the FAA. See Szetela, 118 Cal Rptr.2d at 868

(holding that, in addition to being unconscionable, the arbitration provision is unenforceable because it violates state public policy in promoting judicial efficiency through class actions).

111 Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) .





112 Id. at 90.

113 Id.

114 Bazzle, 123 S. Ct. at 2410 (Rehnquist, C.J., dissenting).

115 Id.

116 Szetela, 118 Cal. Rptr. 2d at 867-868 .

117 Id.

118 Id.

119 Generic arguments against the adequacy of arbitration as an effective forum for resolving disputes have long since been dismissed by the Supreme Court. See Gilmer, 500 U.S. at 31 (holding that, by agreeing to arbitration a party “trades the procedures and opportunities for review of the courtroom for the simplicity, informality and expedition of arbitration.”); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 628 (1985) ; Rodriguez de Quijas v. Shearson/American Exp. Inc., 490 U.S. 477, 481

(1989) (describing suspicion of arbitration as “far out of step” with the Court’s current views). In fact, Congress designed the

FAA to “overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate,” therefore, the Court is unlikely to be sympathetic to similar adequacy concerns on the part of plaintiffs who have agreed to arbitrate. Dean Witter Reynolds, Inc. v.

Byrd, 470 U.S. 213, 219-220 (1985) .

120 Randolph, 531 U.S. at 89-90 (holding that the court rejects “generalized attacks on arbitration that rest on suspicion of arbitration as a method of weakening the protections afforded in the substantive law to would-be complainants.” (quoting Rodriguez de

Quijas v. Shearson/American Exp. Inc., 490 U.S. 477, 481) (internal quotation marks omitted)).

121 Specifically, “the holding of the Supreme Court of South Carolina contravenes the terms of the contract and is therefore pre-empted by the FAA.” Bazzle, 123 S. Ct. at 2409 (Rehnquist, C. J., dissenting).

122

State legislatures are, of course, hamstrung in this area by the Supreme Court’s vigorous use of preemption to invalidate anti-arbitration state law provisions. See Keating, 465 U.S. at 1 .

123 For arguments favoring legislative action to reform mandatory arbitration, see Richard M. Alderman, Pre-Dispute Mandatory

Arbitration in Consumer Contracts: A Call for Reform, 38 Hous. L. Rev. 1237 (2001) ; For arguments supporting the current regime, see Eric J. Mogilnicki & Kirk D. Jensen, Arbitration and Unconscionability, 19 Ga. St. U. L. Rev. 761 (2003) ; See also

Christopher R. Drahozal, “

Unfair” Arbitration Clauses, 2001 U. Ill. L. Rev. 695 (2001)

.

124 See Consumer Fairness Act of 2003, H.R. 1887, 108th Cong. (2003); See also Sen. Russell D. Feingold, Mandatory Arbitration:

What Process Is Due?, 39 Harv. J. on Legis. 281 (2002) .

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