This Supreme Court Case Could Really Cost the Economy A Lot

This could really create a lot of jobs for lawyers.

A seemingly divided Supreme Court on Wednesday debated whether the judiciary should play a role in arbitration cases, the process used by businesses to sort out tens of thousands of disputes as an alternative to going to court. . . .

Chief Justice John Roberts suggested expanded judicial review is appropriate in this instance, pointing to the fact that the two sides negotiated a contract with court review as one of its provisions. Justices David Souter, Ruth Bader Ginsburg and Antonin Scalia suggested Mattel might be seeking more latitude than the law allows for parties to negotiate expanded judicial review in arbitration cases. The American Arbitration Association says a cornerstone principle of federal law is that arbitrators' awards are final and binding. If parties to a dispute are allowed to engage in expanded judicial review, arbitration will become a prelude to lawsuits instead of a substitute, the association said in court papers. . . . .

But this takes the cake:

The wireless industry says that in the absence of court review, parties may decide they are unwilling to "bet the company" on arbitration. The result would be a decline in the number of disputes sent to arbitration and an added workload for already-overburdened courts. . . .

As Roberts points out, if the companies wanted the option to go to court, they can put that in the arbitrarion agreement. You would need to have some explanation for why companies can't figure out what is in there interest (supposedly though this wouldn't then apply to the wireless industry). Even opening up this question up will raise the risks of using arbitration agreements.



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