Source: http://summaryjudgments.lls.edu/2015/06/article-iii-mandatory-arbitration-and.html
Timestamp: 2019-04-25 07:55:10+00:00

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[W]hen courts have sought to justify arbitration on the ground that parties “consented” to bring claims in arbitration rather than in court, they have not applied the “knowing and voluntary” definition of consent recently applied in Sharif. If courts did look for knowing and voluntary consent they would find that while many business-to-business arbitration agreements meet the test, few if any consumer and employment clauses do so.
(H/T Jeff Sovern). I wonder whether Sternlight’s argument cuts more broadly. "Mandatory arbitration" refers to "take-it-or leave" it agreements forged between businesses and consumers before a dispute arises. But do you think the same analysis could apply to recent efforts by policymakers to encourage or require similar corporate dispute resolution programs after-the-fact? Some thoughts after the jump.
A number of commentators describe how mass corporate settlement programs increasingly compete with federal courts to resolve mass litigation,  including Dana Remus and I. More and more, the United States legal system has encouraged or required potential defendants—particularly corporate defendants threatened by numerous similar lawsuits—to design their own elaborate corporate dispute resolution systems following a mass disaster or other pattern of wrongdoing. The Oil Pollution Act of 1990 (“OPA”), for example, practically required BP to set up its own claims facilities, operating out of strip-malls around the Gulf region, to automatically reimburse claims for damages stemming from the Deepwater Horizon spill.  Federal regulatory agencies routinely require airlines, common carriers, financial entities to develop mass settlement programs through regulations and enforcement actions. And increasingly, federal courts have rejected class actions when defendants have already established “superior” out-of-court plans to compensate consumers or recall goods.  In each case, public actors have encouraged or required businesses to establish their own settlement programs--relying on private claim officers, commercial economies of scale, and elaborate internal appeal systems--as a substitute for dispute resolution in court.
And yet, you also could question whether some of these systems involve the same "knowing and voluntary" consent problems that Sternlight identifies above. Even though many corporate settlement programs explicitly or practically require potential plaintiffs to waive their rights to sue in court, in many cases, aggrieved claimants may not consent in any meaningful way. Faced with losing their jobs after an oil spill or with the prospect of foreclosure following a banking crisis, individuals may feel they have little choice but to participate in a corporate dispute resolution program. Moreover, determinations are rarely “negotiated”; rather, most settlement programs render top-down, “off-the-rack” decisions by relying on claim forms, grids, and matrixes similar to those used by public administrative agencies to adjudicate benefits for unrepresented veterans, disabled children, and coal miners. Finally, courts have long enforced post-injury releases of liability with even less scrutiny than arbitration agreements, even for boilerplate agreements involving physical injuries that do not manifest until well after the contract is signed.
What do you think? Does mandatory arbitration or mass corporate settlement systems raise Article III concerns? If so, should courts be more willing to scrutinize arbitration agreements or post-injury releases in such programs? Or are these kinds of alternative dispute resolution, as the Supreme Court has said (even in Sharif, itself), so different that the opposite is true? Would greater judicial review of mass settlement agreements create opportunities for federal judges to expand their own power?
 Jaime Dodge, Reconceptualizing Non-Article III Tribunals, 99 Minn. L. Rev. 905 (2015); Linda S. Mullenix, Designing Compensatory Funds: In Search of First Principles, 3 Stanford J. of Complex Litigation (forthcoming 2015); Jaime Dodge, Disaggregative Mechanisms: The New Frontier of Mass-Claims Resolution Without Class Actions, 63 Emory L.J. 1253, 1293–302 (2014); D. Theodore Rave, Settlement, ADR, and Class Action Superiority, 5 J. Tort Law 91 (2014).
 See Dana A. Remus & Adam S. Zimmerman, The Corporate Settlement Mill 101 Va. L. Rev. 129 (2015); Dana A. Remus & Adam S. Zimmerman, Aggregate Litigation Goes Private, 63 Emory L.J. 1317 (2014).
 See Oil Pollution Act of 1990, 33 U.S.C. §§ 2705(a), 2713, 2714(b) (2012). Robert Force, Martin Davies & Joshua S. Force, Deepwater Horizon: Removal Costs, Civil Damages, Crimes, Civil Penalties, and State Remedies in Oil Spill Cases, 85 Tul. L. Rev. 889, 950–51 (2011) (“OPA’s presentment requirement is . . . a mandatory condition precedent to filing suit against a responsible party. . . . In enacting this presentment requirement, Congress sought to promote settlement and avoid litigation.”).
 See 14 C.F.R. § 250.1-9 (2012) (describing the Department of Transportation’s amended “Airline Denied Boarding Compensation” policy); 49 U.S.C. §14706(f) (permitting carriers to limit liability to shippers to $.60 per pound of any shipped good or another value by “a written agreement” so long as the agreement is maintained with the Federal Motor Carrier Safety Administration and offers the shipper two or more settlement options); United States v. Brennan, 526 F. Supp. 2d 378, 381 (E.D.N.Y. 2007) (reporting that Newsday’s reimbursement program has repaid approximately $90 million); U.S. Gov’t Accountability Office, GAO-13-277, Foreclosure Review: Lessons Learned Could Enhance Continuing Reviews and Activities Under Amended Consent Orders 1, 4–5 & n.9 (2013); Adam S. Zimmerman, Distributing Justice, 86 N.Y.U. L. Rev. 500, 527–33 (2011) (describing agency settlements with corporate defendants that provide restitution to large groups of victims, like class actions).
 See, e.g., Berley v. Drefus Co., 43 F.R.D. 397 (S.D.N.Y. 1967) (refusing to certify class for those purchasing unregistered stock after defendant set up program to refund purchase price); Chin v. Chrystler Corp., 182 F.R.D. 448 (D.N.J. 1998) (refusing to certify class of plaintiffs with defective anti-lock brakes after Chrysler instituted plan to reimburse owners of vehicles with defective ABS systems); In re ConAgra Peanut Butter Prods. Liab. Litig., 251 F.R.D. 689, 699-701 (N.D.Ga. 2008); In re Aqua Dots Prods. Liab. Litig, 270 F.R.D. 377 (N.D. Ill. 2010) (refusing to certify class of consumers who purchased toys that produced comas when swallowed because of voluntary recall and refund program); accord In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 214 F.R.D. 614 (W.D.Wash.2003) (finding effective recall of pharmaceuticals containing PPA more efficient that class litigation). See also Eric P. Voight, A Company’s Voluntary Refund Program For Consumers Can Be A Fair and Efficient Alternative to a Class Action, 31 Rev. Litig. 617 (2012); Andrea Joy Parker, Note, Dare to Compare: Determining What “Other Available Methods” Can Be Considered Under Federal Rule 23(b)(3)’s Superiority Requirement, 44 Ga. L. Rev. 581 (2010).
 See, e.g., Jonathan Tilove, BP Trying to Limit its Payouts, Lawyers Say, Times-Picayune, June 10, 2010 (describing “ongoing concerns related to delayed processing times for larger loss claims, claims pending with no action taken, payment calculations for individual loss of income claims … translation of claims material and accessibility for the hearing-impaired”). See also Josh Wingrove, BP Pulls Disputed Waiver for Workers, Globe & Mail (Toronto), May 3, 2010, at A11 (describing allegations that BP sought “to pull the wool over” the eyes of local fishermen by requiring litigation waivers); Campbell Robertson, Along Gulf, Many Wary of Promises After Spill, N.Y. Times, May 10, 2010, at A12.
 Mangini v. McClurg, 249 N.E.2d 386, 392 (N.Y. 1969) (observing that “[w]hen general peace is the consideration[,] there can be no mutual mistake as to the extent of injuries, known or unknown”).

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