Cellphone Arbitration Clauses Under Attack

Time Magazine published on Sunday a joint op-ed in which Federal Communications Commissioner Mignon Clyburn (D) and U.S. Senator Al Franken (D-Minn.) argue that cellphone carriers and other communications businesses have used class action waivers in arbitration agreements to “evade accountability by effectively locking the courtroom doors on their customers.”  

The FCC contemplates a rulemaking in February 2017 with respect to arbitration clauses in consumer communications services contracts.  

Hat tip to Mark Kantor

Suit Challenging Rule Prohibiting Nursing Home Arbitration

The American Health Care Association (AHCA) sued the Department of Health and Human Services whose Centers for Medicare and Medicaid Services (CMS) issued a rule barring nursing homes from entering into pre-dispute arbitration agreements with residents.

The suit, citing the Federal Arbitration Act, asks that the court find the arbitration rule unlawful and stop enforcement of the rule after its effective date of November 28, 2016.  

Coverage of this suit by National Public Radio, and the National Law Review.

Nursing Home Arbitration Soon to End?

A new federal rule bars any nursing home that receives federal funding from requiring that its residents resolve any disputes in arbitration, instead of court. Many nursing homes receive Medicare and Medicaid funding so the rule will affect nursing homes with 1.5 million residents, according to the NY Times.

The rule is by the Department of Health & Human Services Centers for Medicare & Medicaid Services.

While nursing home arbitration agreements tend to raise all the issues raised by other adhesive agreements--plus more due to the importance of the contract compared to, say, a cellphone's--they are nevertheless agreements.

The Times unfortunately perpetuates its distorted coverage of arbitration by implying that arbitration necessarily "stymie[s] the families of nursing home residents from getting justice." One would need to know arbitrators' rulings in particular cases, and know the facts and law of the cases, to develop an informed view of the extent to which justice was done in those cases. Same with cases ruled on by judges and juries in court.