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March 3, 2008

JUSTICE, AMERICAN STYLE....Halliburton, it turns out, is immune from criminal prosecution when its female employees are gang raped in Iraq, and recently a Texas judge ruled that they're immune from civil suit too. Why? Because their employment contracts contain a binding arbitration clause. So no matter how egregious their conduct, Peggy Garrity writes that you're probably out of luck if you want compensation:

This is a preview of the demise of the jury system intended by the innocuous-sounding tort reform movement. "Tort reform" is a deliberately deceptive term coined in the 1980s by tobacco, pharmaceutical, insurance and gun lobbyists and lawyers who set about to transform our civil justice landscape by eliminating corporate exposure to civil liabilities. After years of an all-out campaign, at the heart of which was relentless media propaganda, judicial selection and legislation, the courthouse doors are rapidly being closed to average citizens, who will be shunted off into a lucrative private legal system presided over by retired judges employed by alternative dispute-resolution providers.

Word. Elsewhere in this morning's paper, we learn that having already decided that injured patients can't sue medical device makers, the Supreme Court is likely to extend that ruling to apply to makers of prescription drugs too:

The U.S. Supreme Court, in an 8-1 decision, ruled last month that patients injured by most medical devices can't sue their manufacturers. And this fall, a similar case could extend the same legal protection to the much larger pharmaceutical industry — a frequent target of lawsuits.

....In recent years, documents and e-mails uncovered in court cases have shown that some companies kept safety issues involving their products from the FDA. "Without the tort system, what reasonable assurance do we have we will learn about the bad actors?" asked David Vladek, a law professor at Georgetown University.

Well, that's sort of the whole point, isn't it? If you'd like to learn more, I have two reading suggestions. First is Blocking the Courthouse Door, by Stephanie Mencimer, a comprehensive look at the business community's relentless attempt to shield itself from liability for just about everything. (Review here.) If that sounds a little too heavy for your taste, try John Grisham's latest opus, The Appeal. Sure, it's John Grisham, so the quality is a little iffy. But The Appeal features an evil corporation buying justice in Mississippi, a Karl Rove-like campaign manager smearing a liberal Supreme Court justice for fun and profit, and the religious right cast in a supporting role as dupes of the business community that really calls the shots in the Republican Party. It's great liberal porn for your next trip to the beach.

Kevin Drum 11:59 AM Permalink | Trackbacks | Comments (36)
 
Comments

I'd like to correct just a couple of misconceptions in that column (and Kevin's post). First off, arbitration is not some kind of star chamber proceeding that's necessarily stacked against the plaintiff. Depending on what system is used, both sides get input into who is and is not on the panel, and most arbitration outfits have an array of arbitrators, both those that could be considered pro-defendant and pro-plaintiff. You don't get a jury, though, and that's of course a big issue.

Second, contrary to the impression left by the column, you can appeal an arbitration result -- or, rather, you petition to vacate it. It's an extremely limited form of review, but if the arbitration was just a complete farce, courts will step in and refuse to recognize it.

That said, with respect to Title VII, I strongly think that Congress should step in and amend it to make illegal any arbitration agreements that apply to such claims. Employers just have too much power to force emlpoyees to "agree" with such provisions, and they really should be subject to trial in open court, given the important societal interests that are implicated in addition to the purely private ones.

Posted by: Glenn on March 3, 2008 at 12:12 PM | PERMALINK

Ah, Freedom!

Smells like ... Gang Rape.

USA! USA! USA!

Posted by: John McCain: More of the Same on March 3, 2008 at 12:14 PM | PERMALINK

So rape goes to arbitration without recourse. How about if one of these women had died as a result of the brutality of their assaulters? No witness = no crime?

We were worried about what the Bushies have done to the rights of those accused of terrorist activites. Seems like no one will have rights such as due process and habeus corpus before they are through shredding the Constitution.

Posted by: DanZo on March 3, 2008 at 12:14 PM | PERMALINK

The U.S. Supreme Court, in an 8-1 decision

With the current make up of the court so evenly divided between conservatives and liberals, it takes a lot of arrogance to get all hot and bothered about a 8-1 decision. I don't have the time, but I think it would be important that those who want to discuss this case really should read the opinions before they commit to arguing a miscarriage of justice on anything which gets 8 members of the SCOTUS to agree.

Posted by: John Hansen on March 3, 2008 at 12:19 PM | PERMALINK

The Washington Post had an editorial Saturday about the devices decision. The Post thinks the answer is to create a governemnt fund to pay for injuries. The paper says this should be like the vaccine fund.

Naturally, the Post sees this as a major step on the way to protecting corporations from consumers.

Posted by: md 20/400 on March 3, 2008 at 12:20 PM | PERMALINK
Word. Elsewhere in this morning's paper, we learn that having already decided that injured patients can't sue medical device makers, the Supreme Court is likely to extend that ruling to apply to makers of prescription drugs too:
Hey, don't blame the Supreme Court. This is a straightforward federalism issue. In the Medtronic case (the 8-1 decision referred to), the Court found that the federal law governing medical devices made it clear that state law claims were pre-empted and therefore not available for suit. If you don't like the result, don't blame the courts, call your congressman and ask that the law be changed. Posted by: Alex Knapp on March 3, 2008 at 12:20 PM | PERMALINK

I'm not sure Grisham should be any guide to how the legal system works. Right now in Mississippi, it's the liberal trial lawyers buying off the judges. In fact, Grisham's pal Dickie Scruggs looks likely to end his days in prison.

Posted by: Frolic on March 3, 2008 at 12:24 PM | PERMALINK

[This IP traces to a spam-bot!!!]

Posted by: Al on March 3, 2008 at 12:24 PM | PERMALINK

The fact that something is legal does not automatically mean it is just. That is where the outrage lies, Hansen. Duh.

Posted by: Blue Girl, Red State on March 3, 2008 at 12:27 PM | PERMALINK

One of the problems with mandatory arbitration provisions that I never see mentioned is that they effectively eliminate punitive damages. Arbitrators are allowed to compensate, but not punish in most justidications. Punishment, whether by incarceration or in the form of punitive damages, is the sole province of the sovereign. Thus, when you sign away your right to sue (a procedural right), you're signing away your right to seek punitive damages (a substantive right).

In this case, if the woman can prove her allegations, any rational jury/judge would award significant punitives. Now she's SOL on punitives.

Posted by: Doug on March 3, 2008 at 12:38 PM | PERMALINK

Halliburton, it turns out, is immune from criminal prosecution when its female employees are gang raped in Iraq, and recently a Texas judge ruled that they're immune from civil suit too. Why? Because their employment contracts contain a binding arbitration clause.

Wow, this is what the Republicans want to turn Americans' rights into? Sounds like the trial lawyers' lobbyists aren't powerful enough. If they were there would be ways to sue these bastards.

Damn the Republican propagandists who work to create these situations.

Posted by: Swan on March 3, 2008 at 12:48 PM | PERMALINK

Simple solution to taking away all my legal rights to recourse: Remington 12 gauge. Maybe some of those legal eagles and CEO's should find out there are worse things than getting sued. (Note to FBI: Just joking to make a point.)

Posted by: Tigershark on March 3, 2008 at 12:49 PM | PERMALINK
The fact that something is legal does not automatically mean it is just. That is where the outrage lies, Hansen. Duh.
Courts don't try to get just results; they get results demanded by the law. Duh. Posted by: jpe on March 3, 2008 at 12:51 PM | PERMALINK

That was my point...

Posted by: Blue Girl, Red State on March 3, 2008 at 12:54 PM | PERMALINK

Kevin- "liberal porn" ???

You sound like an unhinged conservative talking about a Paul Krugman book. Why don't you just say no the next time an impulse, or whatever, to write something like that confronts you?

Posted by: Swan on March 3, 2008 at 12:55 PM | PERMALINK

I notice that many of the decisions that get folks annoyed are purely statutory decisions. If you don't like the decision about what the law means, change the law.

Posted by: freelunch on March 3, 2008 at 12:56 PM | PERMALINK

The 8-1 decision went the way it did because the statute that sets up FDA regulation of medical devices contains an express preemption provision. That is, the statute itself says that it preempts state law. The Court didn't have much room to reach a different result.

There is no comparable express preemption provision that applies to prescription drugs. The drug companies' argument there is that there should be implied preemption of suits against drug companies where the plaintiff is claiming that an FDA-approved warning label is inadequate. Basically they're saying that lawsuits of this kind interfere with the agency's attempt to get the warnings right, because they create incentives for the drug companies to give different warnings to avoid liability. This has been FDA's official position under the Bush administration, and FDA wrote it into a regulation in 2006.

The fact that the Court found express preemption in the device case doesn't mean that they will find implied preemption in the drug case. One thing is pretty likely, though: if the drug companies lose that case, they probably will lobby Congress hard for an express preemption provision.

Posted by: The Fabulous Mr. Toad on March 3, 2008 at 1:08 PM | PERMALINK

If Haliburton is immune from its liability protecting its employees, then are its employees immune from criminal prosecution for executing their rapists?

Posted by: Brojo on March 3, 2008 at 1:14 PM | PERMALINK

Just another way Bush and Cheney (through the company they have a financial stake in) are raping America.

Sadly, that's not as metaphorical as it should be.

Posted by: Mark D on March 3, 2008 at 1:28 PM | PERMALINK

If Haliburton is immune from its liability protecting its employees, then are its employees immune from criminal prosecution for executing their rapists? Posted by: Brojo

Seems like an obvious quid pro quo (tit-for-tat, an eye-for-an-eye) that I would support.

Posted by: on March 3, 2008 at 1:53 PM | PERMALINK

Guns are the answer. When the court system fails and fails spectacularly, that is why we have guns.

Posted by: Praedor Atrebates on March 3, 2008 at 2:05 PM | PERMALINK

Kevin,

That new Grisham novel is based in part on Georgia Supreme Court Justice Carol Hunstein, a moderate, who was targeted by Bernie Marcus (HomeDepot) and his cronies because they thought she was on the wrong side of the tort reform issue. Normally a race for the state supreme court could be effectively waged statewide for under a half million dollars. Marcus et al. shelled out 1.2 million for her opponent, a lawyer with Homeland Security. Hunstein dug up some dirt on the lawyer and ran one of the harshest campaign ads in Georgia history. It was effective - she won another term.

Posted by: jen flowers on March 3, 2008 at 2:15 PM | PERMALINK

Brojo: If Haliburton is immune from its liability protecting its employees, then are its employees immune from criminal prosecution for executing their rapists?

Seems like an obvious quid pro quo ... an eye-for-an-eye

Consider that "an eye-for-an-eye" is straight from the Code of Hammurabi, the poetic justice is especially appropriate. I'll spring for the ammo.

Posted by: alex on March 3, 2008 at 2:21 PM | PERMALINK

two problems i see with arbitration clauses:

1) the corporation often contracts with an arbitration organization to hear cases. you really expect a fair hearing under such circumstances?

2) consumers, workers et al increasingly have little choice but to agree to arbitration in many instances, effectively surrendering their constitutional rights. it's one thing to attempt to mediate a solution to a dispute between two sides, thus legitimately avoiding a costly court battle. it's another to mandate a system in which one side has a near guarantee of being held harmless even under the most egregious circumstances.

Posted by: mudwall jackson on March 3, 2008 at 2:21 PM | PERMALINK

The trend toward arbitration and away from public civil trial has been driven by several factors. First, civil courts began finding their dockets swamped by drug cases in the 1980s and the trend has continued. Because criminal cases have both statutory and constitutional speedy trial requirements, all civil cases began to be pushed further and further down the docket, to the point where many civil cases now wait for years for resolution in the court systems in the US. The courts themselves have played an active role in creating arbitration as a wholesale alternative to civil trials.

Second, commercial arbitration has blossomed. Many companies like arbitration because the results are normally kept confidential. Further, because most commercial arbitration is the result of arbitration clauses in contracts between companies, the companies can craft their own rules for arbitration, including the relief available, the extent of discovery and the speed of the process. (There is great truth to the saying that justice delayed is justice denied. Many corporations are willing to pay into a private judicial system to ensure that they have timely resolutions to their disputes.)

The type of arbitration that causes the most trouble is the type that pits an ordinary citizen against a powerful interest such as a big corporation. Some of these systems work adequately, such as labor arbitration agreed to in collective bargaining agreements. In this case, the individual has the union backing her in two ways: (1) The union bargained for a system that has some substantial protections for both company and worker; and (2) the worker has the benefit of union assistance in the process itself.

Those protections can be totally absent in many arbitration proceedings. There is a classic case in which a person who had purchased a ticket for a pleasure cruise had a dispute with the cruise line, only to find that the arbitration clause required arbitration in a distant forum, and imposed many other burdens on the ticketholder. The courts upheld the arbitration clause with the rationale that the ticket purchase was equivalent to a freely bargained contract.

So, I have to disagree with Glenn's comments above. Some arbitration systems do provide a variety of potential arbitrators, but in most regimens there is no requirement for that. Further, when the arbitration arises from contract, the party with the bargaining power (such as the cruise line) can easily stack the process in a way that ensures it will have sympathetic arbitrators.

As to Glenn's second point, I have been involved in the process of overturning an arbitration award. The cases where an award is vacated are very few and far between. Most important, though, is that awards are not vacated because of a sense of unfairness. Courts repeatedly uphold outrageous awards. Most of the time, when courts vacate an award, they do so because there was some formal flaw in either the award itself or the process of initiating or conducting the arbitration. And even then, most of the time those cases are sent back to arbitration.

Posted by: anoregonreader on March 3, 2008 at 2:34 PM | PERMALINK

The answer is simple: no arbitration for felony criminal acts against persons. Period. A discrimination case? Perhaps arbitration is OK...though there should be a law that if there are more than x number of cases of similar discrimination then the issue leaves arbitration and goes to the courts for PERMANENT correction.

If a felony is committed (rape, assault, murder) then no arbitration - straight to criminal court and then civil court for proper economic punishment.

Posted by: Praedor Atrebates on March 3, 2008 at 3:08 PM | PERMALINK

Oh, and as a poster said above: remember people, if the company is immune for criminal actions by its employees and there is no punishment for the criminals committing acts officially, you DO have an equal right to kill the person who victimized you. You CAN kill your rapist. You CAN kill the person that killed your son/daughter. You CAN kill or beat into a coma a person that physically assaulted you. Goose:Gander and all that.

Posted by: Praedor Atrebates on March 3, 2008 at 3:10 PM | PERMALINK

I make my living being tech writer. One of my accounts is for an ex-judge in LA who works for an arbitration group. The judge was used quite extensively for almost a year and half by one corporation (note: every case was an Individual vs. Corp...until the judge ruled twice against them. Haven't seen them since.

So yeah...totally f'n fair.

Posted by: quiltpox on March 3, 2008 at 3:11 PM | PERMALINK

What most folks don't understand is that blocking access to courts is the very reason to destroy that society that allowed those actions to occur.

It's a reason for war, and wars are usually bloody to some degree.

It does look as if the U.S. wants a big bloody civil war; and a lot of those companies are going to be destroyed in the process.

Oh well...nothing is forever.

Posted by: James on March 3, 2008 at 4:26 PM | PERMALINK

I complete agree with both Praedor Atrebates' posts. I would further add that I would like to see a Constitutional amendment making all contracts that stipulate an individual surrendering one of their rights under the Bill of Rights, null and void.

Posted by: Dr. Morpheus on March 3, 2008 at 4:42 PM | PERMALINK

Maybe it's time to make solicitation of surrender of civil rights to be illegal, or at least a void contract.

Posted by: Neil B. on March 3, 2008 at 6:13 PM | PERMALINK
[R[emember people, if the company is immune for criminal actions by its employees and there is no punishment for the criminals committing acts officially, you DO have an equal right to kill the person who victimized you. You CAN kill your rapist. You CAN kill the person that killed your son/daughter. You CAN kill or beat into a coma a person that physically assaulted you. Goose:Gander and all that.
Yes, you can. You can also go to prison thereafter if a jury unanimously finds that, at the time of the killing, a reasonable person (not you individually) would have believed that deadly force was not necessary to prevent death or serious bodily injury. Posted by: John in Nashville on March 3, 2008 at 7:23 PM | PERMALINK

Twenty years ago, libertarians argued that we should get rid of regulations on business, because the tort system provided sufficient incentive against corporate wrongdoing, making administrative law costly and unnecessary.

As soon as we dumped regulatory law, however, those same libertarians started agitating for "tort reform."

As the post notes, there is now nothing to prevent American business from doing whatever it wants, no matter who or how much it hurts.

One result is that London is now again becoming the world's financial center, as the American financial sector has become more opaque and corrupt, and is less trusted by investors.

Posted by: Nancy Irving on March 4, 2008 at 4:09 AM | PERMALINK

Nancy,

No, it is the wisdom of legislators and regulators, as exemplified by Sarbanes-Oxley, that drives business to London.

People, do you really think the problem is it is too difficult to sue corporations? Many lawyers make a very good living off of scaring companies into paying.
The horrible publicity a company receives when defending against a sexual harassment claim, or a racially-motivated termination, make most companies settle, no matter how flimsy the case.
Greedy lawyers have been quick to capitalize, and the legal system is sometimes a racket for lawyers and unscrupulous "victims".
Some people hate corporations, and think this hurts them, but in the long run, they just hire more lawyers (so again, lawyers win), raise their prices, and legitimate cases are swamped in the sea of ambulance-chasing.

Posted by: Joe on March 4, 2008 at 6:23 AM | PERMALINK

Extraordinary book on the abuses of corporate trial attorneys:

"The Best Defense" by Ralph Nader. He's at his best documenting the abuse of the legal system by many white shoe law firms.

A must read.

Posted by: ron feinman on March 4, 2008 at 6:28 AM | PERMALINK

Glenn, the first commentator, has this right. Arbitration does not equal one-sided victory for the defendant. On the other hand, there is some merit to the argument that employment disputes might be better left to the court system as a carve out to the general rule allowing consensual arbitration.

Posted by: Chunche on March 4, 2008 at 9:57 AM | PERMALINK
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