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Contra arbitration: AG lawsuit, House hearing, now class-action

From The Minneapolis/St. Paul Business Journal, "Class action suits filed against NAF":

Three people have filed class action lawsuits against the National Arbitration Forum (NAF), alleging the company hid its ties to credit-card companies and handed down unfair rulings.

The claims in the suits closely follow those made by the Minnesota Attorney General's office earlier this month. That suit, which accused the NAF of masking its relationships with the debt collection industry, was settled last week. As part of the settlement, NAF agreed to exit the consumer arbitration business. It did not admit to any wrongdoing.

The plaintiffs' bar campaigns against arbitration. Minnesota's AG sues an arbitration company. A House committee holds a hearing and releases a damning report. And now a class-action suit. Almost as if there were a plan. Wonder what comes next.

Oh yes, it's Congressional action. From the American Association of Justice, a news release, "Legislation Critical In Settling Arbitration Landscape." The bills to ban pre-dispute consumer arbitration are H.R. 1020 and S. 931.

Earlier posts...

UPDATE (2:45 p.m.): Other developments, as reported in the WSJ Law Blog:

[Former Miami Herald writer Martin] Merzer reported that, only a day after the American Arbitration Association announced that it has suspended all of its consumer arbitration activities, JPMorgan Chase, one of the nation's largest credit-card issuers, announced it, according to creditcards.com, would no longer submit disputes to arbitration and was reevaluating the inclusion of arbitration provisions in its consumer contracts.

Writes Merzer about the AAA-JPMorgan-back-to-back news: "Two more supporting beams have crumbled and now, with astonishing speed, the entire edifice of the mandatory credit card arbitration system is collapsing."

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.