Duke Law and Roscoe Pound Institute Symposium Examined Consumer Arbitration

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It may be contained in your monthly bill, or perhaps a separate mailing that you didn’t notice. Even if you looked at it, it might not have registered as a significant event. But increasingly, consumers in the United States are being forced to give up their right to sue in court and instead agree to submit any claims to binding arbitration. While in theory arbitration might be faster, experts are concerned that businesses might be stacking the deck to make the process decidedly less fair to consumers.

mock oral argument
Duke Professor of Law Thomas Metzloff, left; Jamie Horton, account manager for Progressive Business Solutions of Raleigh; and Judge Paul Niemeyer of the Fourth Circuit Court of Appeals, participate in a mock oral argument of AT&T v. Ting during the symposium.

The growing use of arbitration was the subject of a two-day symposium at Duke Law School on Oct. 4-5. Co-sponsored by Duke Law School’s Private Adjudication Center and the Roscoe Pound Institute, the program brought more than 20 leading academics in the field to Durham to discuss the future of arbitration. The program, titled “The Coming Crisis in Mandatory Arbitration: New Perspectives and Possibilities,” examined how arbitration works and how it should be regulated in the future.

Duke Professor of Law Thomas Metzloff, who served as the lead organizer for the conference, explained that the topic is critically important because there has been a “radical expansion in the use of binding arbitration in ways that were unthinkable even a few decades ago.” The need for careful study and analysis of arbitration derives from the potential for an enormous shift of decision-making responsibility away from the courts into a private forum in ways that will surely impact fundamental values long associated with the courts, he said.

Several papers focused on what we know, or don’t know, about the arbitration process. A paper by Deborah Hensler, a leading empirical researcher on litigation, and Linda Demaine investigated how many arbitration agreements the average person is a party to. Sampling from various banks, health care organizations, car dealers and other service providers, they found that arbitration agreements are common in several arenas. Mark Budnitz from Georgia State University examined a wide number of existing arbitration agreements to analyze what they provided in terms of which party was responsible for paying what costs. His analysis revealed a serious concern that too often the agreements are unclear in those areas.

Other papers examined specific practices and raised questions about how courts should resolve the wave of disputes now arising. One practice that in particular raised concerns: The use of arbitration agreements to exclude the potential for consumers filing class actions. Jean Sternlight, from the University of Missouri-Columbia, argued in her paper for courts to reject such provisions, noting the importance of class actions in vindicating consumer rights.

The conference included an unusual feature for an academic conference. Taking time out from the presentation of papers, a mock oral argument was staged in the case of AT&T v. Ting. Ting involves an arbitration provision imposed by AT&T on its long-distance customers that, among other things, prohibited any customer from filing a class action lawsuit. After the district court judge found the agreement unconscionable, AT&T appealed to the Ninth Circuit Court of Appeals, where the case is now pending.

Judge Paul Niemeyer of the Fourth Circuit Court of Appeals presided, directed questions to Michael Quirk from Trial Lawyers for Public Justice, an organization that serves as counsel of record for Ms. Ting. The case raised fundamental questions about how the national policy articulated by the Supreme Court in favor of arbitration should be reconciled with state efforts to regulate arbitration.

Federalism concerns also were discussed in several papers. David Schwartz, from the University of Wisconsin, argued strongly that the Supreme Court’s recent federalism decisions which favor state regulatory authority should be used to overrule some of the Court’s decisions that have preempted state efforts to control arbitration.

The papers from the conference will be published in early 2003 in a special issue of Law & Contemporary Problems. A full listing of the current drafts are available at, the web site for the Roscoe Pound Institute.