How a Lawsuit Over Hot Coffee Helped Erode the 7th Amendment (2014)
The article is wrong in one very important detail regarding the Federal Arbitration Act. The author states,<p><pre><code>  The legal basis for outsourcing legal proceedings is a 1925
  law passed by Congress specifying arbitration as an option
  for “merchants” who agree to a private alternative.
</code></pre>
Actually, nowhere in the statute is the word merchant or merchants used. That word is used in the legislative history (i.e. the debates and arguments). But from the plain text of the statute, a layman reading would have it apply to all commerce that would otherwise be governed by federal law. You have to rely on some presently out of favor legal interpretative devices to believe that the law should only apply between merchants.<p>The _real_ issues are,<p>1) What kinds of commerce are reachable? This bill passed in a time when the Federal Courts held a substantially narrower interpretation of Congress&#x27; powers over commerce. And even proponents of modern, so-called plain text interpretation usually admit that in some circumstances, especially involving constitutional issues of powers, you want to see a more clear articulation of an intent to extend power so broadly.<p>2) SCOTUS upended over half a century of settled precedent. First when it held that the FAA was enforceable in state courts applying state law, and again when it decided that state law defenses to enforceability (i.e. state-specific definitions of unconscionability) could not be used.<p>3) Deciding that state law defenses are not useable is ironic give the plain text limitation that arbitration agreements are enforceable &quot;save upon any grounds that exist at law or in equity for the revocation of any contract&quot;. There&#x27;s a sound argument that this exclusion doesn&#x27;t capture state-based grounds. But that argument necessarily depends on the historical legal context--at the time the law couldn&#x27;t have reached nearly as much commerce as SCOTUS allows today. And it wasn&#x27;t until 1938 until Erie Railroad v. Tompkins exalted state law in choice of law matters.<p>These details matter because if you try to debate the Federal Arbitration Act with knowledgeable defenders you lose all credibility by repeating falsehoods like the author did. We really need change in this regard: 1) stop so-called tort reform, and 2) fix SCOTUS&#x27; error in applying the FAA so broadly. It helps if people stick to facts.<p>Many conservatives love the FAA; and many conservatives love so-called tort reform. But the inevitable outcome of both these things will be centralization of consumer protection in federal government agencies. A modern democracy simply won&#x27;t stand-by while corporations cheat and injure people. The question is, which system do you want:<p>1) One that is decentralized, relatively equitable (1000 years of careful balancing of interests between plaintiff and defendant), and with more freedom for states to experiment, or<p>2) One that is centralized in a few government regulatory bodies, where the little guy will almost always get screwed, and businesses are subject to the whims of each passing administration on major issues, turning every major business dispute into a political issue.<p>The latter is what you get when you take away the ability for people to seek out individualized justice in the courts. And the outcome will not (and is not) good for anybody.