Consumer Law

SCOTUS Takes Arbitration Case, Justice Department to Increase Fair Credit Enforcement, and Repoed Toddler

By Jeff Sovern

by Jeff Sovern

A few recent consumer law reports: The SCOTUS Blog has reported that the Supreme Court has granted cert in what could be an important arbitration case.  Here's their description:

Docket: 09-497
Title: Rent-A-Car, West, Inc. v. Jackson
Issue: Whether the district court is in all cases required to determine claims that an arbitration agreement subject to the Federal Arbitration Act (?FAA?) is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this ?gateway? issue to the arbitrator for decision.

• Opinion below (9^th Circuit)
• Petition for certiorari
• Brief in opposition
• Amicus brief of the Pacific Legal Foundation

One reason this may be significant is that arbitrators have an incentive to rule that such a contract is not unconscionable, since if the arbitrator finds the contract unconscionable the arbitrator would have to terminate the arbitration, thus eliminating the possibility of additional fees from the case, while if the arbitrator denies the unconscionability defense, the arbitrator can continue hearing the matter, and reap additional fees.  Consequently, a ruling that arbitrators can decide such matters is likely to reduce the number of contracts found unconscionable even in cases where such a finding would be warranted. 

The Times reports that the federal Department of Justice is creating a new unit to focus on unfair lending practices and especially reverse-redlining.  Among the reasons this seems like a particularly good move: First, it is difficult for private plaintiffs to bring successful actions under the Equal Credit Opportunity Act, and second, the subprime crisis has lent credence to claims that reverse redlining is common.

From time to time a car is repossessed with a child inside.  Here's another report on such an act.  Imagine how frightened the child must have been.  The UCC forbids self-help repossessions that breach the peace; this one, with a police helicopter search and chase involved, sounds like it qualified.

Full post as published by CL&P Blog on January 16, 2010 (boomark / email).