Help Get Rid of Mandatory Binding Arbitration–Support the Arbitration Fairness Act

Your help is urgently needed on important legislation impacting on all consumers. The Arbitration Fairness Act of 2007 (House Bill H.R. 3010 and Senate Bill S. 1782) would outlaw mandatory arbitration agreements for consumer contracts.

As you know, businesses and corporations bury binding mandatory arbitration clauses in contracts for countless products and services including credit cards, new homes, and cars. These clauses force you to surrender your rights to a privatized system known as arbitration. Corporate wrongdoers and fraudulent companies protect themselves from being held accountable by hiding behind BMA clauses inserted in fine print.

Although states have tried to address this problem through their consumer protection laws, the courts have interpreted the current onerous Federal Arbitration Act to trump state laws leaving consumers very little recourse. Historically, the FAA intentionally omitted ordinary citizens from these types of agreements. The Arbitration Fairness Act would return this statute to its original intention and omit consumer, medical, franchise, and employment agreements from these pre-dispute agreements. Americans are entitled to a trial by jury; pre-dispute mandatory arbitration agreements give only one side the upper hand.

The Pennsylvania Trial Lawyers Association urges you to write to your Senators and Representatives and tell them to cosponsor this legislation. A sample letter is included below that you are welcomed and encouraged to modify. You can locate mailing info. for your Senators and Representatives by going to www.congress.org

**Sample Letter**

Re: BMA Clauses Hurt Average Americans

Dear ___________ :

I urge you to cosponsor the Arbitration Fairness Act of 2007, which would ban pre-dispute Binding Mandatory Arbitration clauses in consumer and employment contracts. This unfair practice stacks the deck against average Americans trying to hold powerful interests accountable when they have been hurt through no fault of their own.

Buried within the fine print of many consumer contracts for credit cards, home-building contracts and car purchases are clauses that force consumers to give up their rights to seek justice through the courts. These clauses have hurt thousands of Americans already, and will continue to do so if Congress doesn’t pass the Arbitration Fairness Act of 2007.

I ask you to consider the story of Guy Combs who was hurt by a Binding Mandatory Arbitration clause:

Vietnam veteran Guy Combs bought a house in his hometown of Alpine, Texas. After living in the house for only four years, Guy discovered that his home had severe structural problems. He asked his builder to repair the damage, but the builder offered to pay only $3,000 for $300,000 worth of damages. When Guy bought the home he unknowingly signed an arbitration agreement, which was not explained to him at the time. Therefore, he was forced to settle his dispute in arbitration.

Guy describes arbitration as “third world justice.” The arbitrator refused to recognize that there were damages to Guy’s home despite the testimony of twenty expert witnesses that Guy hired. The arbitration process cost him $77,000. The arbitrator billed him a flat fee of $150,000 but after negotiations he brought the fee down to $50,000 plus interest. Guy did not want to lose his ranch and, since there was no means for appeal, he paid the fees.

Guy has a PhD from Brown and he thought he understood our legal system, until his rights were eviscerated by arbitration.

Guy Combs is just one of thousands of victims of Arbitration. These clauses, buried within many consumer contracts for credit cards, nursing homes and car purchases, stack the deck against ordinary Americans and force consumers to give up their rights before a dispute even occurs.

Again, I urge you to cosponsor the Arbitration Fairness Act of 2007 which bans this unfair practice and allows hardworking Americans to seek justice through the courts, often the only place they can face powerful interests on a level playing field.

Sincerely,

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For more informaiton, ccontact PaTLA 121 South Broad Street, Suite 600 Philadelphia, PA, 19107
Tel 215.546.6451 Fax 215.546.5430