Tuesday, June 22, 2010

Why the Supreme Court's Decision in Rent-a-Center v. Jackson Matters

David Gans

Yesterday, the Supreme Court handed down its ruling in Rent-a-Center v. Jackson to a near-deafening silence. The case generated very little media coverage, drowned out by continuing coverage of the oil spill and coverage of other rulings by the Court and limited, perhaps, by the density of Justice Scalia’s majority opinion, which seems designed to make the case appear complicated, technical and narrow. But Rent-a-Center is extremely important, and its holding will likely affect thousands of Americans, another ruling in a long campaign by corporations to supplant judicial review with arbitration. This post explains why Rent-a-Center matters.

In Rent-a-Center, in a sharply divided 5-4 ruling, the conservative majority of the Supreme Court reached out to create a new rule of pleading that makes it difficult for hard-working Americans to seek justice in the federal courts to enforce their federal rights, including the right to be free of racial discrimination in employment. Citing the arbitration agreement Antonio Jackson was forced to sign as a condition of being hired by Rent-a-Center, Justice Scalia’s opinion for the Court’s five conservatives held that Jackson’s civil rights lawsuit could not be heard in federal court. Jackson’s claims, including his challenge to being forced to arbitrate his civil rights claim, could only be decided by a private arbitrator.

Justice Scalia’s opinion for the Court invents a new pleading rule – one urged by neither party in the litigation – to keep Jackson out of federal court. Parsing Jackson’s briefs, Justice Scalia finds fault with Jackson’s lawyers for attacking the validity of the entire forced arbitration agreement as unconscionable, rather than the particular provision of the agreement that gave the arbitrator the power to resolve challenges to the arbitration agreement. Because Jackson’s lawyers brought the wrong claim, Jackson loses.

This looks largely like nitpicking – and it is – but something far more serious is afoot. Justice Scalia’s opinion raises dramatically the burden on workers and other Americans across the country who are subject to forced arbitration. Justice Scalia rejects the idea that Jackson is entitled to seek justice in federal court if he can show that the arbitration agreement, in its totality, was an unfair, one-sided deal that the company forced on him as the price of getting a job. That’s the challenge that Jackson’s lawyers brought, and the Court rejected.

It’s never going to be easy for an employee to show that an arbitration agreement is unconscionable, and the Court’s ruling makes that burden a great deal heavier by refusing to look at the arbitration agreement as a whole. In Jackson’s case, for example, the Court treated it as irrelevant that the arbitration agreement was manifestly one-sided, only covering claims an employee might bring against the employer, while exempting those claims that Rent-a-Center might raise, and imposing sharp limits on an employee’s ability to gather evidence. The net result – which Justice Scalia basically concedes – is that the Court’s newly minted pleading rule will make it harder for employees to seek justice in federal court.

The Court’s holding turns on its head our constitutional tradition of access to the courts, and effectively relegates hard-working Americans like Antonio Jackson to arbitration proceedings that, all too often, are structurally biased to favor large corporations. The problem here was not the law – as Justice Stevens showed in another powerful dissent, nothing in the Federal Arbitration Act, its history, or the Court’s precedents, remotely compelled this result – it was the five conservative Justices in the majority. In fact, the Justices had already recognized that a plaintiff was entitled to bring suit in federal court notwithstanding an arbitration agreement if he or she had been forced to go to arbitration as part of an unconscionable bargain. Justice Scalia’s opinion in Rent-a-Center changed the rules to make it much harder for Americans subject to an arbitration agreement to make this showing. With millions of Americans forced to arbitrate their claims – whether by their employers, cell phone or credit card companies – it is hard to miss the obvious fact that shutting the courthouse doors to plaintiffs like Antonio Jackson will have a lasting effect on access to justice for men and women across the country.

David Gans is the Director of the Human Rights, Civil Rights & Citizenship Program at the Constitutional Accountability Center. CAC joined an amicus brief in Jackson, emphasizing that forced arbitration of civil rights claims runs counter to the text and history of the Reconstruction-era civil rights statute at issue, which was written to give Americans a right of access to federal courts. For more information on this case, please see our prior posts here and here.

Cross-Posted at Text & History

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