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Clinic Files Amicus Brief with U.S. Supreme Court

March 31, 2010

The law school’s Appellate Litigation Clinic filed an amicus curiae brief with the U.S. Supreme Court in Rent-A-Center, West, Inc. v. Jackson, which will be heard on April 26. The case will decide if a corporation can impose a contract that bars courts from reviewing the fairness of an arbitration provision.

Professor Richard H. Frankel and 3L John L. Dougherty were the primary authors of the brief, which was filed March 31, on behalf of the National Consumer Law Center and Consumer Action.

The brief argues that courts should be allowed to determine if an arbitration provision is unconscionable, instead of giving the arbitrator sole authority to decide the matter.

The U.S. Court of Appeals for the Ninth Circuit found that Rent-A-Center, which required employee Antonio Jackson to sign an agreement to arbitrate any claims he might have against the company as a condition of employment, had imposed an unconscionable requirement.

Citing Jackson’s assertion that he lacked the bargaining power to meaningfully assent to the agreement and provisions that preserved Rent-A-Center’s right to litigate claims against him, the Court of Appeals found that the fairness of the arbitration provision should be decided by a court.

The brief acknowledges that arbitration can be a fair process, but cites conflicts of interest and corrupt practices that have emerged in consumer arbitration, such as shared ownership of a firm that handles consumer loans and a firm that arbitrates disputes surrounding those loans.

“It shows how easy it is for bad actors to abuse or misuse arbitration for financial gain,” Frankel said.

Dougherty, one of eight students enrolled in the Appellate Litigation Clinic, said the well-documented evidence that the arbitration system can be corrupted demonstrates the need for courts to intervene in disputes.

The case has broad implications for consumers, Dougherty said, noting that they seldom realize that they are subject to arbitration agreements linked to products they buy, rent or lease.

“If you buy a new computer, a cell phone or an iPod, you are agreeing to a clause merely by unsealing the package,” said Dougherty, who quickly had to get up to speed on arbitration agreements.

Dougherty said that’s been an exciting, if challenging aspect of the clinic, which opened in September and handles appellate matters in state and federal courts that involve issues from predatory lending and mortgage foreclosure to constitutional issues and prisoners’ rights.