(The Return of) Ignatz, by Sam Heldman

Tuesday, June 24, 2003

I love that name -- Bazzle. Sounds like a muppet, or a minor character in Harry Potter. But really, it was a very important Supreme Court decision, issued yesterday, that got overshadowed by the major news that the Supreme Court narrowly decided not to make the law worse on affirmative action. Here (pdf) is the opinion. Here is where I discussed the case before it was argued.

Last week, the news was full of stories about Congressional efforts to corral all significant class actions into federal courts, rather than letting them be litigated in state courts. (Companies think that federal courts are less hospitable to class actions, and so naturally companies want to be in federal court because without class actions there can be no effective enforcement of many consumer and employment laws). Thanks to the trend exemplified in Bazzle, however, the choice between federal or state courts might end up being a moot point in many class actions -- because more and more, in consumer-company or employee-employer relationships, we see arbitration "agreements" being slipped in amongst the fine print, such that you "agree" that you will arbitrate rather than sue if you ever have a claim against the company.

Companies also like to claim that, in arbitration, there's no such thing as a class action -- that each consumer, or employee, must fight his or her fight alone, shouldering all the costs. Companies take this stance, naturally, because they don't want class actions -- they want most of their behavior to go unchallenged by the people whom it affects. But Bazzle is good news for consumers and employees in this regard: the Court seemingly rejected the theory that there is something ipso facto impossible or improper about having an arbitrator certify a class and grant relief to the class.

I have said before that -- in contrast to some progressive lawyers -- part of my brain welcomes arbitration, because (a) many arbitrators are better for consumers and employees than are many judges, and (b) arbitration can be a powerful tool for fairness, if the arbitrator is a good one. So, I welcome the opportunity to present a good class action to an arbitrator, if that opportunity ever comes.

There still remain many battles to be fought, as companies make new efforts to shove arbitration "agreements" down consumers' and employees' throats that explicitly forbid class arbitration. Then we will really get down to the nub of the question: are companies allowed to do that, so as to protect their own ability to violate consumer and employment laws with relative impunity? Bazzle didn't reach that question in its fullest form, because the Court held that the arbitrator should have been allowed to determine whether a class action was appropriate under the language of this "agreement". Still, Bazzle is a very important step towards ensuring that corporations cannot grant themselves immunity from effective enforcement of the laws, because Bazzle recognizes that arbitral class actions are appropriate.

posted by sam 10:02 AM 0 comments


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