Remember the “Halliburton rape” case, where the national media uncritically passed along claims that a young woman had been viciously assaulted by co-workers while stationed in the Middle East, then confined to a container by beastly managers when she tried to complain, and finally suffered the ultimate indignity when her employment contract required her to submit the claims to arbitration? It’s a tale that was advanced by politicians like Sen. Al Franken (D-Minn.), by some of the usual suspects in opinion journalism, and especially by the litigation lobby as part of its campaign against contractually provided-for arbitration (as with the much-reviewed, HBO-aired “Hot Coffee“). Not a few of these advocates — like the left-leaning ThinkProgress — threw “allegedly” to the winds and flatly accused the co-workers of rape.
Unless you’d read one of the very few skeptical evaluations of the case — many of them written by Ted Frank — you may have been shocked this July when a Houston jury summarily rejected Jamie Leigh Jones’s lawsuit. Now — better late than never — the Houston Chronicle shreds the popular narrative of the affair and its media coverage in particular (ABC News: a tale of “sexual brutality, corporate indifference and government inaction.”) Is it too much to hope that anyone will be embarrassed enough to apologize?
More: As commenter E-Bell notes, journalist Stephanie Mencimer, with whom we’ve had our differences in the past, deserves due credit for this July coverage in the unlikely venue of Mother Jones. And quoth @Popehat: “‘Putting the victim on trial’ is code for ‘defending yourself and testing the evidence.’”
On upholding consumer and employee agreements to arbitrate, as in the days before the telegraph, it can take a while for the word to get from D.C. to the West Coast. [Cal Biz Lit]
Contractually stipulated arbitration works less poorly than the NYT editorialists seem to think — and lawyer-driven class action litigation not nearly as well [Daniel Fisher, Forbes, more]
For a number of years organized trial lawyerdom has made it a top priority to attack contractual clauses providing for arbitration of employment, consumer and other disputes, arguing that only litigation — that is to say, their own services — can provide the needed fairness, deterrence and compensation. Such is the Litigation Lobby’s overreach in this matter that even a veteran liberal, former Ninth Circuit judge and Carter education secretary Shirley Hufstedler, is constrained (with co-author William Webster) to part company with bills introduced by Wisconsin Senator Russ Feingold and others: “Astonishingly, such legislation would effectively abolish arbitration as a viable alternative for such disputes.” [National Law Journal]
The Center for Class Action Fairness filed an amicus brief yesterday on behalf of consumers in the Supreme Court case of AT&T Mobility v. Concepcion; Public Citizen brought a suit successfully striking an arbitration provision in a cell-phone contract as “unconscionable” because it did not provide for bringing class actions—even though consumers as a whole would be better off with the generous arbitration provision than with opportunity for the class action. Of course, then trial lawyers lose out. More at Point of Law; and Public Citizen’s page on the case has other briefs and links to (generally pro-trial-lawyer) blog commentary.
Things you’re missing if you aren’t checking out my other site:
Tucked away in the Obama administration’s proposals for revamping regulation of financial services is a provision that would apparently allow federal regulators to curtail or eliminate the preagreed arbitration of consumer complaints in stockbroker and other financial service disputes, thus shunting more cases as litigation to the civil courts. [Erin Geiger Smith, Business Insider]. Max Kennerly has a plaintiff’s-eye view.
Not a misprint: the arbitration award in Chester v. iFreedom Communications Inc., (PDF), in favor of a former chief marketing officer fired without cause, was really $4.1 billion with a b. [Dennis Westlind, World of Work via Ohio Employer's Law; JAMS, Los Angeles]
P.S.: A commenter at an Alabama site: “So much for mandatory binding arbitration always favoring the big company.”
P.P.S.: More on how it happened, including serious lapses by the defendant in responding to the action, from AmLaw Litigation Daily, National Law Journal, and Daniel Schwartz.
Today I testified before the Senate Republican Conference about the effect on the economy of excessive litigation. A podcast is available on-line and, for the insomniacs among you, the hearing will be broadcast on C-SPAN tonight at 10:56 PM Eastern and again at 2:09 AM Eastern. Also testifying was Life Without Lawyers author Philip Howard; Crystal Chodes, who lost her job because of the expense of a meritless ADA filing mill suit; Texas doctor David Teuscher; and arbitration expert and University of Kansas law professor Christopher Drahozal.
If you just prefer reading what I have to say, my written testimony is on-line also:
The total loss to the economy from excessive tort litigation above and beyond a baseline of an employment at will regime and an average industrialized tort system can be estimated at between over $600 billion and over $900 billion a year, 4.3% to 6.5% of GNP, or a tort tax of between $8,000 and $12,000/year for an average family of four. And this is very much a conservative estimate, as other economists find much stronger effects than I have estimated here, as I have not tried to estimate a number of identifiable secondary and tertiary effects of excessive tort litigation on allocation of economic resources, and as I have not tried to estimate the likely effect of recent Congressional expansions of tort liability in the last twelve months.
I was pleased to hear from multiple Congressional staffers who are regular Overlawyered readers: one even surreptitiously added the website into my official biography. Carter Wood talks about the hearing and Senator Cornyn’s remarks over at Point of Law.
Update: video on-line at C-SPAN; my segment begins at 43:15 or so. And C-SPAN2 is rebroadcasting at 4:16 pm Eastern on Tuesday, March 17, which suggests that my appearance will be at about 5 pm Eastern.
The Searle Center at Northwestern is out with a new study of consumer arbitration that suggests it’s not the bogeyman trial lawyers have been painting it as (we’ve touched on the topic before). I’ve got a summary excerpt and a few more links over at Point of Law.