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The Lawsuit Industry’s Attack on Arbitration Is Cynical and Selfish

3 minute read
Joyce is president of the American Tort Reform Association

Until the former Miss America, family-values conservative and former Fox News anchor Gretchen Carlson filed a lawsuit last summer alleging she’d been sexually harassed by her boss, Roger Ailes, mainstream media and the progressive left had been far more inclined to mock Carlson than to stand with her.

But thanks to efforts by America’s profit-seeking and always opportunistic lawsuit industry, Carlson is suddenly a media darling. With reliably generous campaign contributions, the plaintiffs’ bar commands the obedience of Senate Democrats who, as TIME recently reported, have made Carlson the latest poster child in their long-running quest to erode and ultimately repeal the 91-year-old and frequently upheld Federal Arbitration Act (FAA).

With Congress’s authority under the Commerce Clause of the Constitution (Article I, Sec. 8), the bipartisan FAA has effectively made arbitration clauses in lawful contracts legally enforceable for nearly a century. As recently as 2008, 2011 and 2012 the U.S. Supreme Court has upheld both the law’s reasonable promotion of arbitration as a low-cost alternative to litigation and, importantly, its preemption of state laws intended to subvert it.

Carlson’s employment contract with Fox News reportedly included an arbitration clause. Before courts could decide whether that clause prohibited her lawsuit against Ailes, the case was settled. But in less notable cases, arbitration works efficiently and fairly to resolve individual disputes between buyers and sellers of goods and services, employees and employers, and even businesses that enter into more complex contractual arrangements with one another.

And that, as self-interested class-action lawyers see it, is the problem. Arbitration saves participants time and money, preserves taxpayer-provided court resources and avoids the awarding of multimillion-dollar fees to such lawyers, the costs for which are otherwise passed on to the rest of us in the form of higher consumer prices or lower wages and benefits.

The lawsuit industry and its allied lawmakers have repeatedly sought in the past to use sympathetic cases ripped from the headlines to advance their anti-arbitration agenda. Elderly nursing home residents, military service veterans and alleged victims of violent crime have all starred in previously failed efforts to carve out statutory exceptions to the FAA. Carlson’s is but the latest case to be cynically seized upon.

Congressional majorities should continue to reject this cynicism. Lawmakers can stand strong against workplace supervisors who misuse their power without buying into wealthy trial lawyers’ propaganda. After all, most Americans believe our nation suffers too many lawsuits, not too few—especially residents in states such as Missouri, the “Show Me Your Lawsuits State,” where many judges’ shameless favoring of plaintiffs invites evermore lawsuits that burden consumers, jobseekers and taxpayers.

Arbitration is not and was never intended to be a wholesale replacement for civil litigation. But it can help ease overburdened court dockets without denying an individual’s right to seek just compensation. The FAA reasonably promotes arbitration by protecting Americans’ right to enter mutually beneficial contracts without the lawsuit industry selfishly insisting on a cut. Thus Congress and the courts should preserve arbitration and the FAA.

Joyce is president of the American Tort Reform Association in Washington, D.C.

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