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July 8th, 2010 5:13 pm
Supreme Court Deals Welcome Blow To Trial Lawyers
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The United States Supreme Court’s recently-completed term provided those who treasure individual freedom with much reason to celebrate, including the affirmation of Second Amendment protections against state infringement in McDonald v. City of Chicago.

Another 5-4 decision announced the same day as McDonald received less celebration, but not because it was any less worthy.  In Rent-a-Center, Inc. v. Jackson, the Court dealt a justified and much-needed blow against the hyper-litigious trial lawyer industry in America.   At issue in Jackson was whether the threshold question of enforceability of voluntary alternative dispute resolution agreements could be decided by arbitrators, or instead by already-overburdened courts.

Naturally, trial lawyers loathe alternative dispute resolution agreements because they reduce the likelihood of runaway “jackpot jury” awards and reduce the oppressive costs of litigation, thereby lowering settlement value.  Although the trial lawyers’ bar dishonestly claims that alternative dispute resolution “deprives plaintiffs of their day in court,” that is simply not true.  Arbitrators who decide such cases are typically experienced judges rather than random jurors off the street, and the full array of discovery and remedies are typically available to plaintiffs who have truly suffered.  The deciding arbitrator is also agreed upon mutually by the parties beforehand, thus ensuring an unbiased decisionmaker.  But because the chance of a runaway jury award is reduced, ambulance chasers absolutely loathe them.  And had the Supreme Court ruled that overburdened courts must determine threshold questions of enforceability of such agreements, trial lawyers would have reason to cheer.

Fortunately, the Supreme Court ruled correctly, albeit by only a frightening 5-4 margin.  Writing for the majority, Justice Antonin Scalia noted that plaintiff Jackson signed the alternative dispute resolution voluntarily, and it made no sense to distinguish enforceability questions from other matters on which disputes center.  For the dissenting minority, Justice John Paul Stevens claimed that the result was “unfair,” as if the plaintiff had no ability to walk away from the agreement when it was offered to him.

Alternative dispute resolution is an underappreciated way to reduce outrageous “jackpot justice” awards in a fair, speedy, inexpensive way, which is why trial lawyers detest them.  Come to think of it, trial lawyers’ hysterical opposition to alternative dispute resolution is evidence enough of their value.  A hearty “bravo” to the Supreme Court.

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