Consumer Reports has published an in-depth article on forced arbitration, uncovering the devastating negative impact it has had on the rights of American consumers by limiting their options to seek justice and compensation when products turn out to be faulty or harmful.
Arbitration clauses are hidden in the fine print of millions of “take it or leave it” consumer contracts (i.e., when simply buying a dishwasher or TV). These agreements take away an individual’s constitutional right to hold manufacturers publicly accountable when they are defrauded or harmed by products that are faulty or unsafe.
Studies have shown that most consumers have no idea that they’ve agreed to arbitration.
These clauses also prevent consumers from filing class action suits in cases where large numbers of people suffer the same harm.
Consumer Reports notes that “because arbitration proceedings are private, and because arbitration clauses almost always forbid plaintiffs from joining together, companies can use arbitration to preemptively crush consumer challenges to their practices, no matter how predatory, discriminatory, unsafe—and even illegal—they may be.”
Forced arbitration was not always so inescapable. For instance, in the mid-1990’s when front-loading washers became extremely popular because of their impressive performance and energy efficiency, it wasn’t long before owners began to complain of mold buildup, foul smells, and ruined laundry.
It turned out that the rubber gaskets around the doors trapped moisture, among other problems. After this discovery, class action lawsuits involving millions of washers followed, and by 2017 settlements favorable to owners had been reached with Bosch, Electrolux, LG, and Whirlpool.
When asked, “What would happen if the mold problem emerged today?” Lieff Cabraser partner Jonathan Selbin, who was lead counsel in the LG and Whirlpool suits, said “For one thing, it would be hard to find a lawyer.” According to Selbin, nowadays it’s “highly unlikely” he would take on a case with such a broadly written mandatory arbitration clause in place. In fact, before taking new cases, he now always asks whether an arbitration clause is in effect. “It’s become a threshold inquiry right up there with whether the problem is real,” noted Selbin. “And without a lawyer, consumers rarely prevail. Just 6 percent of people who represent themselves in arbitration win, research shows.”
About Jonathan D. Selbin
Jonathan Selbin is a senior partner in Lieff Cabraser Heimann & Bernstein LLP’s New York office. He chairs the firm’s Economic Injury Product Defect Practice Group, and is a long-time member of the firm’s Executive Committee.
Jonathan litigates consumer protection and defective products class action lawsuits against many of the nation’s most prominent corporations, and has been appointed by courts around the country to lead such litigation on behalf of consumers. He has argued and obtained favorable appellate opinions in multiple Courts of Appeal, including in the Fifth, Sixth, Seventh and Ninth Circuits. His work on behalf of consumers was featured in a September 2014 Forbes article and a March 2016 National Law Journal article.
Together, cases in which Jonathan has played a lead role have resulted in court-approved class action settlements with combined total payouts to class members exceeding $3.25 billion in cash, plus other relief, such as extended and enhanced warranties.
Jonathan is a 1993 magna cum laude graduate of Harvard Law School, and clerked for Honorable Marilyn Hall Patel in the Northern District of California from 1993-1995.
In 2017, Jonathan and his family founded the Selbin Voting Rights Fellowship at Equal Justice Works, funding a rolling two-year fellow working to ensure fair access to voting in at-risk communities.