Diffusing disputes: the public in the private of arbitration, the private in courts, and the erasure of rights.

Author:Resnik, Judith
Position:Continuation of II. The Creation and Erasure of Rights into IV. Metrics of Effective Vindication, Adequacy, and Unconscionability D. "Mass" Arbitration Clauses Without a Mass of Claims, p. 2849-2894 - Arbitration, Transparency, and Privatization: Contextualizing and Analyzing Recent Developments in U.S. Arbitration Regimes

In addition to encouraging parties to exit the court system, judges superintend court-based settlement efforts. (220) As their procedures incorporate ADR, the practices of judges come to resemble those of neutrals and arbitrators. Together, that cohort and their work constitute a field (in the sociological sense proposed by Pierre Bourdieu), (221) in which reflexive exchanges normalize the avoidance of the public regulation entailed in adjudication in favor of diffusing disputes to diverse private sites. Control over access by third parties becomes a matter of largesse, rather than right. (222) At the high end of international arbitrations, the overlapping sets of lawyers and arbitrators are developing a community of norms. And for the small-dollar claims of consumers and employees, the repeat player purveyors of arbitration clauses overlap with ADR providers to designate certain organizations as authoritative decision makers. As adjudication becomes repositioned as the product of "unnecessary litigation," the rationales for public funding of courts weaken. Decisions to cut public investments in courts or to close courthouses become more difficult to contest. (223)

Earlier, I offered the phrase Dispute Diffusion to capture this developing normative orientation, aligning and conflating adjudication with its alternatives. Implementation comes through a host of statutes and regulations constituting what I termed Alternative Civil Procedure Rules (ACPR). Unlike the tidiness of the 1938 Federal Rules of Civil Procedure (numbered from 1 to 84) and their counterparts in each state (all of which are produced and disseminated by the governments of the issuing jurisdictions), locating ACPR requires much more effort. One needs to piece together sub-constitutional doctrine, statutes, and government-promulgated rules authorizing outsourcing, link such provisions to often hard-to-find manuals and protocols of hundreds of ADR providers, and learn whether specific arbitration clauses proffered when purchasing goods and services or applying for jobs impose modifications. (224)

The reason to group this array of sources together is to show their common function. Unsurprisingly, the many mini-codes of procedure incorporate some of the methods and values of the Federal Rules. And just as the substantive effects of the 1938 Federal Rules have come to be widely acknowledged, (225) so too must the substantive norms imported into the ACPR be brought into view.

At their inception, the 1938 Federal Rules aimed to ease barriers to the federal courts by shaping trans-substantive, uniform, national provisions that expanded opportunities for obligatory information exchange among the parties and that vested discretion in trial judges, who were empowered to render public decisions based on the claim's merits. (226) In the mid-1960s, rule revisions facilitated the filing of class actions--thereby enabling the entry of schoolchildren, prisoners, consumers, employees, and many others into court. (227) The way was paved by dozens of new federal statutory rights, the creation in 1974 of the Legal Services Corporation, and fee-shifting provisions for civil rights and employment discrimination plaintiffs. (228)

The influx of diverse claimants helped to clarify the political and social consequences of adjudication--the inevitable "substance" of rules of "practice and procedure"--that made plain the stakes of different procedural opportunities. (229) After heated debates about the processes for drafting rules, federal legislation in 1988 imposed new requirements: proposed changes had to go through a period of public notice and comment prior to their approval or modification by layers of committees, reviewing the rules before sending them to the Supreme Court. Further, the time for congressional override after promulgation by the Court was expanded, to run for 180 days. (230) Rule-making hearings became contested exchanges in which self-identified groups affiliated with "plaintiffs" or "defendants" sought to influence decisions on pleadings, discovery, aggregation, and trials.

The Alternative Civil Procedure Rules now emerging come in part from the public sector; new federal rules incorporating ADR go through the processes outlined above, just as rules for state-based arbitration or other forms of ADR go through those jurisdictions' requirements. Further, state regulations affect some of the rules; for example, California requires arbitration providers to waive fees for indigent claimants using arbitration within that state. (231)

But alternative rules are also produced by private providers, free to specify procedures without public input. The variability in ACPR renders it normatively deregulatory. To the extent that some providers--such as the AAA--solicit input from outsiders and are concerned about limiting expenses of parties, they do so by choice. Thus, the AAA's decisions to convene a task force to produce its 1998 "Consumer Due Process Protocol" imposing fee schedules with caps, to create ethical standards, (232) and to revise its rules and fee schedules are matters of "internal policy." (233) Likewise, the AAA's standards of "Ethical Principles," such as "commitments to diversity" and "information disclosure and dissemination," are choices, (234) and many other ADR providers do not follow these AAA efforts at self-regulation. Further, the manufacturers and services that impose arbitration clauses make a host of choices; according to one review of 188 U.S.-based "social media providers," about forty percent mandated arbitration, and many did not meet the "due process fairness tests" of the AAA. (235) Indeed, identifying terms in arbitration clauses, ADR providers, and learning about their rules and caseloads are research projects in themselves. (236)

In addition to variability, ACPR do not insulate decision makers' independence from parties; rather, ACPR shape an insider system with its own political economy, reliant on a web of confidential interactions inhibiting connections to the body politic. One could--if energetic--search the fifty state websites to make a list of the name of every person appointed or elected to be a judge in state and federal courts. Further, one could review thousands of pages of data on court filings and outcomes and look at individual dockets, many of which are now on electronic filing systems. (237) And one could walk into the thousands of courthouses around the country to read files and to watch judges, when they are on the bench.

But no central registries account for the hundreds of ADR decision makers, the claims filed before them, their rules, fees, or outcomes. The AAA, for example, does not have a list of all the institutions identifying it as the administrator of their arbitrations, (238) and the AAA does not offer a public directory of its own arbitrators. (239) Instead, confidentiality is one of the AAA's Ethical Principles, committing the organization to keeping information about proceedings private. (240) Watching the work is also not an option. The major providers advertise confidentiality as a signature of their processes; the hearings are generally closed, and the rules permit arbitrators to bar third parties from attending hearings. (241) While many arbitration clauses are "silent on confidentiality," (242) some oblige participants to keep information and outcomes private. (243)

Aggregate data and individual filings are also not made publicly accessible, except as required under federal or state law. For example, the AAA complies with state mandates requiring posting of data, but takes down that information when the obligation to post (generally for five-year periods) expires. (244) Some redacted employment awards are also made available. (245) Researchers seeking to capture trends need to obtain special access to ADR providers' files or archive data before those materials disappear from the Internet.

Complainants and their lawyers have parallel challenges. One consumer cannot know from arbitration dockets whether another won or lost based on identical allegations of overcharges or product defects, just as one employee cannot generally know if another succeeded on discrimination or on other claims of rights. Individual decisions come into the public purview through limited routes, such as when awards are contested; the rulings of arbitrators are generally enforceable in, albeit not directly reviewable by, courts. (246) As the AAA explained to the United States Supreme Court, which agreed with the argument against the appellate review called for in an arbitration clause, "finality" --translated as limited court oversight--is intended to produce economy. (247) Thus, the Court chose to close off judicial reconsideration even when the parties had sought court review of the lawfulness of the outcome of arbitration. (248)


    Contract, not coercion, was the centerpiece of arbitration in much of the nineteenth and twentieth centuries. The obligations to participate and to comply flowed from shared decisions to eschew the public arena. Negotiating parties could design their own idiosyncratic procedures, select their decision makers, and stipulate remedies to suit their preferences. Arbitrators in turn derived their power from and owed their loyalties to the parties' intent, rather than governing law. The "ability to tailor processes to fit particular circumstances and needs" (249) invited autonomous self-fashioning. Arbitration was seen to promote economic growth (250) and, as Michael Helfand discusses in this volume, the welfare and well-being of sub-communities. (251)

    Arbitrations were also private in two other senses of that word. First, during the nineteenth century, parties who decided to arbitrate could not turn to the public system to enforce that obligation. (252) Rather, as a matter of "public" (the word chosen) policy, courts...

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