Diffusing Disputes: The Public in the Private of Arbitration, the Private in Courts, and the Erasure of Rights

Judith Resnik, Arthur Liman Professor of Law at Yale Law School, has published “Diffusing Disputes: The Public in the Private of Arbitration, the Private in Courts, and the Erasure of Rights,” 124 Yale Law Journal 2015. In her article, Professor Resnik provides a different perspective regarding the effect recent Supreme Court precedent pertaining to class waivers has had on arbitration in the United States.

Here is the abstract:

Two developments frame this discussion: the demise of negotiated contracts as the predicate to enforcing arbitration obligations under the Federal Arbitration Act and the reorientation of court-based procedures to assimilate judges’ activities to those of other dispute resolution providers. From 1925 until the mid-1980s, obligations to arbitrate rested on consent. Thereafter, the U.S. Supreme Court shifted course and enforced court and class action waivers mandated when consumers purchased goods and employees applied for jobs. To explain the legitimacy of precluding court access for federal and state claims, the Court developed new rationales — that arbitration had procedural advantages over adjudication, and that arbitration was an effective enforcement mechanism to “vindicate” public rights.

The result has been the mass production of arbitration clauses without a mass of arbitrations. Although hundreds of millions of consumers and employees are obliged to use arbitration as their remedy, almost none do so — rendering arbitration not a vindication but an unconstitutional evisceration of statutory and common law rights. The diffusion of disputes to a range of private, unknowable alternative adjudicators also violates the constitutional protections accorded to the public — endowed with the right to observe state-empowered decision makers as they impose binding outcomes on disputants. Closed processes preclude the public from assessing the qualities of what gains the force of law and debating what law ought to require. The cumulative effect of the Supreme Court’s jurisprudence on arbitration has been to produce an unconstitutional system that undermines both the legitimacy of arbitration and the functions of courts.

This and other scholarly papers authored by Professor Resnik are available free of charge from the Social Science Research Network.

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