Minnesota Senator Al Franken, among others, responded to the Supreme Court’s Concepcion decision by introducing a bill called the Arbitration Fairness Act of 2011 (S.987, also in the House as H.R. 1873) last May, which would legislatively nullify arbitration provisions in various types of agreements. The Senate Judiciary Committee heard two hours of testimony on the bill last Thursday (Oct. 13), from speakers including Minnesota’s Attorney General (in support of the legislation), a representative of the Chamber of Commerce (opposing the legislation), an emergency room doctor (who supports the legislation and told the committee of her bad experience arbitrating a discrimination claim), a member of the non-profit Public Justice (in favor of the legislation) and a law professor (also opposing the legislation). The remarks of each speaker are available here.
Senator Franken opened the hearing with this comment: “Personally, I’m troubled that our private arbitration system is, at least in part, eclipsing the United States Supreme Court, the highest court in the land. Perhaps today’s hearing can help us determine whether there is a sound middle ground -one where we use arbitration to the fullest fair extent, but allow our Supreme Court to fulfill its role as the true final arbiter.”
If passed, the Arbitration Fairness Act would invalidate any contractual arbitration clause that requires arbitration of an employment dispute (other than those with labor unions), consumer dispute, a claim involving constitutional rights, or a statutory discrimination claim. The bill specifies that any dispute over whether the Arbitration Fairness Act applied would be decided by a court, even if the litigant did not raise a challenge to the arbitration provision itself (contrary to the Prima Paint decision and its progeny). The Senate Judiciary Committee will continue to take some testimony and comments about the Act until October 20, and then the Chair will decide whether the Act will go any further.
A similar bill was introduced in 2009 (Arbitration Fairness Act of 2009) in the U.S. House and Senate. The 2009 bill was slightly different than the 2011 legislation: instead of invalidating arbitration clauses covering constitutional or discrimination claims, the 2009 version invalidated arbitration agreements in franchise disputes. However, despite its 126 co-sponsors in the House and Senate, and the more liberal composition of the Congress at that time, the Arbitration Fairness Act of 2009 did not gain any traction and never made it out of its respective committees. Unless there is significant public reaction to the Concepcion v. AT&T Mobility decision that persuades Congress to make this bill a priority for both parties, the Arbitration Fairness Act of 2011 is also unlikely to be passed. But it may continue to raise legislative awareness of the policy issues raised by the U.S. Supreme Court’s recent rulings on arbitration.