Congress and the U.S. Supreme Court appear headed for collision over mandatory arbitration in consumer and employment contracts.

Two actions over the last month moved the branches closer to impact: The justices agreed to decide next term whether a class action ban in a cell phone arbitration agreement is unconscionable — one of the hottest issues in arbitration. And major financial reform legislation, which would give government agencies the power to ban or limit mandatory arbitration agreements, moved into a House-Senate conference committee.

The Court has taken a steady stream of arbitration challenges in the past decade or so. Although the justices have divided narrowly on some issues, their decisions have generally been pro-arbitration, according to litigators and scholars. That trend is in contrast to the increasing skepticism shown by lower courts and lawmakers about arbitration's claim to greater efficiency and less cost than court litigation.

“I think there's no doubt the Court is very positive to arbitration in general,” said F. Paul Bland, senior attorney with Public Justice, a Washington-based public interest law firm. “There are a number of big battles coming up where companies have provisions in clauses that, at least in some particular cases, do act as get-out-of-jail free cards.”

By far the biggest pending battle is AT&T v. Concepcion, the cell phone case that the justices will hear next term. Kenneth Geller, a partner in the Washington office of Mayer Brown, represents AT&T Inc.; Deepak Gupta of Washington's Public Citizen Litigation Group is counsel to Vincent and Liza Concepcion.

Although he believes the AT&T arbitration agreement, is “about as consumer-friendly a regimen as I can think of,” Andrew Tulumello, vice chairman of the class action practice group in the Washington office of Gibson, Dunn & Crutcher, predicted the class action issue likely would closely divide the Court.

But public momentum is moving away from mandatory arbitration agreements, he said, adding, “I can imagine a scenario where, if AT&T won, you could see an effort to legislatively override the decision. It's visible enough an issue and the type of thing people care about. People hate those waivers in consumer agreements.”

via Law.com – Arbitration Showdown Looms Between Congress, Supreme Court.

Congress and the U.S. Supreme Court appear headed for collision over mandatory arbitration in consumer and employment contracts.

Two actions over the last month moved the branches closer to impact: The justices agreed to decide next term whether a class action ban in a cell phone arbitration agreement is unconscionable — one of the hottest issues in arbitration. And major financial reform legislation, which would give government agencies the power to ban or limit mandatory arbitration agreements, moved into a House-Senate conference committee.

The Court has taken a steady stream of arbitration challenges in the past decade or so. Although the justices have divided narrowly on some issues, their decisions have generally been pro-arbitration, according to litigators and scholars. That trend is in contrast to the increasing skepticism shown by lower courts and lawmakers about arbitration's claim to greater efficiency and less cost than court litigation.

“I think there's no doubt the Court is very positive to arbitration in general,” said F. Paul Bland, senior attorney with Public Justice, a Washington-based public interest law firm. “There are a number of big battles coming up where companies have provisions in clauses that, at least in some particular cases, do act as get-out-of-jail free cards.”

By far the biggest pending battle is AT&T v. Concepcion, the cell phone case that the justices will hear next term. Kenneth Geller, a partner in the Washington office of Mayer Brown, represents AT&T Inc.; Deepak Gupta of Washington's Public Citizen Litigation Group is counsel to Vincent and Liza Concepcion.

Although he believes the AT&T arbitration agreement, is “about as consumer-friendly a regimen as I can think of,” Andrew Tulumello, vice chairman of the class action practice group in the Washington office of Gibson, Dunn & Crutcher, predicted the class action issue likely would closely divide the Court.

But public momentum is moving away from mandatory arbitration agreements, he said, adding, “I can imagine a scenario where, if AT&T won, you could see an effort to legislatively override the decision. It's visible enough an issue and the type of thing people care about. People hate those waivers in consumer agreements.”

via Law.com – Arbitration Showdown Looms Between Congress, Supreme Court.