Supreme Court Considering Far-Reaching Cases This Term

I remember as kid growing up in Texas that a generalized fear settled in when the Texas legislature convened every other year for its regular sessions. The general sentiment of those of us who didn't own oil wells, ranches or corporations was, "Quick, nail everything down tight. They're going back into session."

When it comes to consumer safety, it may be that the U.S. Supreme Court will come to resemble the Texas legislature. This term, the Court considers whether federal regulations will preempt state law claims in injury cases.

What does that mean?

Preemption is a legal term that describes the relationship between federal law and the laws of the states. Because federal law is supreme, Congress can make laws that displace state rules. Sometimes this is a good thing. For example, without preemption, states would be free--if they chose--to allow slavery. That, of course, is unacceptable.

Unfortunately, preemption can also be used to eliminate consumers' access to the courts. In the pending case of Riegel v. Medtronic, Inc., the Court will hear a claim from the manufacturer of a potentially dangerous catheter that it should not face a claim from a consumer who died when the product malfunctioned, even if it was defectively designed. Medical equipment manufacturers are relying on the Medical Device Amendments, claiming that Congress eliminated the rights of injured consumers to sue for damages when injured by careless manufacturers.

Maybe the Court will steer by principle and stick with the well-developed rules that consumers retain the ability to have a jury decide whether the manufacturer was in the wrong. Or maybe it's a new era reminiscent of the Texas legislature. The Court hears argument in early December, with a decision expected by June.

David F. Sugerman
www.pspc.com
Paul & Sugerman, PC

Comcast Loses Another Arbitration Clause Case

In September 2007, the U.S. Court of Appeals for the 11th Circuit followed a clear trend when it ruled that Comcast could not enforce its mandatory arbitration clause against subscribers who brought an overcharge case against Comcast. In Dale v. Comcast Corp., 498 F.3d 1216 (11th Cir. 2007), the Court ruled that the arbitration clause was unconscionable and unenforceable because it made consumers’ pursuit of claims nearly impossible.

The case is part of a growing trend in which federal and state courts are scrutinizing mandatory arbitration clauses. Full disclosure: Paul & Sugerman represents consumers in litigation against Comcast and has successfully fought the Comcast arbitration clause in Oregon. That case--Martin v. Comcast--is still pending.

The problem with mandatory arbitration clauses is that they are often one-sided and unfair. A requirement that both parties go to arbitration isn’t necessarily so bad IF both sides agree. But often these clauses are buried in fine print. Worse, they frequently contain other provisions that hurt consumers, like limits on recovery of attorneys fees, prohibitions on class actions, and elimination of certain types of damages. The one-way clause often includes a choice of arbitration services that favor large corporations. In the end, it’s often about as fair as a rigged ring toss at a carnival.

It’s nice to see things turning back toward the middle. This is one area in which the pendulum went way out of whack.

David F. Sugerman
www.pspc.com
Paul & Sugerman, PC