Prepared Statement of Senator Chuck Grassley of Iowa
Ranking Member, Senate Committee on the Judiciary
Hearing on “The Federal Arbitration Act and
Access to Justice: Will Recent Supreme Court Decisions Undermine the
Rights of Consumers, Workers, and Small Businesses?”
Tuesday, December 16, 2013.
Mr. Chairman, thank you for holding this hearing. It’s always helpful to have experts in particular areas of the law come here to testify. I expect we’ll learn a great deal today from our panel of witnesses.
The Federal Arbitration Act was enacted in 1925 “in response to widespread judicial hostility to arbitration agreements.” Courts have held that the Federal Arbitration Act reflects the fundamental principle that arbitration is a matter of contract. And the Supreme Court, as we’ll discuss today, has said that courts are to place arbitration agreements on equal footing with other contracts.
We find arbitration agreements in many consumer contracts. These form contracts used in cell phone service agreements or credit card agreements routinely include an arbitration clause. Sometimes we read these agreements; sometimes we don’t. But then again, form contracts have long outnumbered custom drafted contracts. So this isn’t something new.
As with anything, there are pros and cons to arbitration clauses. We’ll hear about both today. I expect we’ll also hear that businesses, in the wake of recent Supreme Court cases, still must decide whether to include arbitration clauses in their user agreements. Despite the predictions from some that arbitration clauses would become the default position.
I look forward to hearing from our witnesses today. Particularly, I look forward to testimony explaining what we can expect following the Supreme Court’s decision in the American Express case. Absent class action provisions, will consumers really lack an ability to have their dispute adjudicated? Also, what direction will we see arbitration clauses move going forward?
In the wake of the American Express and AT&T Mobility cases, I hope the witnesses can separate myth from reality, today, and give us a clear picture of what’s next.
Thank you again, Mr. Chairman. I look forward to this hearing.