Mass arbitration attack could bring Intuit to its knees
Justice for the millions ripped off by Turbotax’s “Free File” fraud.
Ever hear of “binding arbitration?” That’s a clause in a contract that says that you aren’t allowed to sue the company you’re doing business with, even if they cheat, maim or kill you. It was invented to let giant companies of equal size and power agree in advance not to spend billions and decades in court to resolve contractual disputes.
Then, Federalist Society judges led by Antonin Scalia set about clearing the way for arbitration to be crammed down everyday folks’ throats by powerful businesses. Today, it’s primarily used by doctors, mechanics, publishers, after school programs, ski resorts, fast food restaurants, gig/app work companies and tech companies of all kinds to strip the people who buy from them or work with them of the rights that Congress gave them, all at the stroke of a pen.
The advent of non-negotiable contracts with binding arbitration clauses makes a mockery of the law, and of the very idea of contracts. These clauses are a (literal) get out of jail free card for businesses that abuse the people who interact with them. They have multiplied like cancer, and today, they’re everywhere.
When you sign a binding arbitration waiver, you lose the right to sue, and, critically, to join a class action suit, which is often the only way to get justice for mass-scale, small-dollar ripoffs. Very few of us will pay a lawyer thousands to get back the $50 some business owes us, but if that business owes millions of people $50, then one lawyer can represent all of them at once through class action. But not if they’ve all clicked “I agree” to binding arbitration.
Instead of suing, binding arbitration lets you go to a fake court: an arbitration proceeding presided over by a corporate lawyer who is paid by the company you’re seeking redress against. These arbitrators overwhelming find in favor of the business that signed their paycheck, but even if you do eke out a win, you don’t set a precedent that the next person can rely on. Every arbitration case starts from scratch.
The proliferation of arbitration has rapidly eliminated the very idea of civil justice for individuals wronged by…