Today, the U.S. Supreme Court decided Arthur Andersen LLP v. Carlisle, No. 08-146. One of the issues resolved by the Court is whether a contract to arbitrate a dispute is enforceable by a nonsignatory party to the agreement. The text of the opinion is here. We will blog on this case after we read it.

As previously blogged here, the debate over predispute arbitration clauses in contracts between businesses and consumers, employees, and franchisees is heating up. Supporters of the Arbitration Fairness Act of 2009 held a press conference last week on “Fairness Arbitration Day.” See related posts after the jump. In contrast, Professor Omri Ben-Shahar from the University of Chicago, spoke recently on the “Myths of Consumer Protection Law.” Part of the lecture, discussed at the University of Chicago Faculty blog is here: Myth #2: Consumers need access to courts Many boilerplate licenses—standard contract terms that are often reused—require mandatory arbitration or place the forum to settle abuses far away. These provisions make litigation an infeasible choice. The consumer protection advocates believe everyone deserves their day in court, making these types of contracts unenforceable. But even if we had broad freedoms to sue, would it help us? If everyone had the freedom to sue, some would exercise that right and others would not. The people exercising their right to sue for inadequate consumer products would raise the products’ price. People who do not utilize their right to sue would have to pay this higher price, in effect subsidizing the litigious group. It seems intuitive that only people who are informed of their legal rights will exercise them. Those that are informed would likely tend to be the affluent and wealthy users. Thus, instead of helping the class of people that consumer advocacy is most protective of—uninformed and poor consumers—broad legal rights serve as a subsidy from the have-nots to the haves. On the other hand, legal rights to sue for inadequate products may deter businesses from pursuing illegitimate tactics. This would benefit all consumers. But this assumes that litigation is a good mechanism to distinguish the unfair and deceitful practices. Many observers believe that the outcomes of consumer protection suits are impossible to predict, undermining any desirable deterrent effect. Related Posts: Consumer Protection Measure Introduced In Senate, Arthur Delaney, The Huffington Post, May 1, 2009. Why Allowing Pre-Dispute Arbitration Opt-Out Clauses Is not Effective Consumer Protection, Jeff Sovern, Consumer Law & Policy Blog, May 1, 2009. Corporations Only Want Arbitration Fairness for Themselves, Not Workers, Paula Brantner, Today’s Workplace, April 30, 2009. A SEC Commissioner Opposes Mandatory Arbitration, Jill Gross, ADR Prof Blog, April 25, 2009. A Blow to Workers’ Rights, New York Times Editorial, April 3, 2009.

Holly Hayes has joined the team of Karl Bayer, Dispute Resolution Experts. Holly received a Masters in Health Administration from Duke University and her BA from Southern Methodist University. Holly brings a strong hospital operations background to medical malpractice mediations including a focus on clinical quality. Holly managed her own consulting firm for eight years with consultations including development of clinical service line toolkits; writing an international services business plan; conducting an operating room assessment; developing two internet graduate management courses composed of over 25 modules including strategic planning, finance and strategic alliances; and serving as project manager for an annual $70 million bio-med initiative. From 1997 to 2001, Holly was Assistant Vice President, Duke University Health System (DUHS) responsible for planning and business development for Duke’s $1.5 billion health care facility network. She worked at Duke for a total of 12 years in a variety of operational and corporate planning positions. Find out more about Holly’s background here. She can be reached at holly@karlbayer.com.

Need CLE credits? The State Bar of Texas Annual Meeting and CLE will take place on June 25-26, 2009 at the Hilton Anatole in Dallas. The Alternative Dispute Resolution Section Program will be on June 25. Visit this link for more information. Technorati tags: arbitration, ADR, law, State Bar of Texas CLE