Why would anyone take on $172,000 of debt; incur additional expenses for housing, food, and incidental; and lose three years of earning potential to get less than a 40% chance of a job? This article exposes a real problem with the legal industry and with the student loan industry.
The fallout from Concepcion continues. AT&T Mobility LLC v Concepcion (2011) 131 S Ct 1740 ruled generally that the Federal Arbitration Act (“FAA”) preempted state law. The opinion recognized, however, that the FAA “permits agreements to arbitrate to be invalidated by `generally applicable contract defenses, such as fraud, duress, or unconscionability,’ but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” Concepcion, 131 S. Ct. At 1746.
The California Supreme Court has tried to exclude a number of disputes from the FAA preemption. Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066 (Broughton) and Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303 (Cruz) combined to create the “Broughton-Cruz Rule” that deemed arbitration provisions unenforceable as contrary to public policy if they require arbitration of claims for injunctions under the California Unfair Competition Law, The California False Advertising Law, or the California Consumer Legal Remedies Act. Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 invalidated predispute waivers of an employee’s right to bring a representative action under the Labor Code Private Attorneys General Act of 2004.
In McGill v. Citibank, N.A., the Fourth District of the California Court of Appeals will likely give the California Supreme Court another opportunity to evaluate what disputes, if any, that California courts will except from federal preemption.
In McGill, an individual sued Citibank for unfair competition and false advertising in connection with a credit insurance plan. Citibank petitioned to compel arbitration under its account agreement with the plaintiff. The trial court granted the petition with respect to the monetary claims, but denied it with respect to the claims for injunctive relief, relying on the “Broughton-Cruz Rule.” The plaintiff relied on Iskanian, likening her claims to those of an individual making claims in lieu of the Attorney General.
The Fourth District Court of Appeals reversed, siding with federal court decisions that Concepcion preempted the “Broughton-Cruz Rule” and required all claims to be arbitrated. The opinion distinguished Iskanian, holding that a true Private Attorney General action is properly a “state” action, while the injunctive claims of Ms. McGill are not, even though they intend to help people similarly situated.
California has long tried to preserve the interests of individuals subject to the “small print” of arbitration agreements imposed upon them by people, businesses, and others with superior bargaining power. The federal courts, starting with Concepcion, seek to promote arbitration agreements. With McGill, at least one District Court of Appeal is thinking the same way. The extreme budget cuts facing many Superior Courts should encourage a policy favoring dispute resolution outside of the court system, but such a policy should not be so broad that it denies civil justice to the citizens of California. Iskanian could be the right balance, but the question remains as to whether McGill might tip the balance in the wrong direction.
The December 2014 issue of California Lawyer contains a sobering article for anyone thinking of going to law school. The cost is excessive, the debt overwhelming, and the job prospects not nearly bright enough to warrant the expense.
I love what I do, but if I recently graduated from college, I cannot see how law school and the practice of law makes any sense.
In an article in the ABA Journal, the managing partner of Bingham discusses the firm’s options for mergers and even the remote possibility of bankruptcy.
As a law student and a young attorney, I thought that working at the old McCutchen firm would have been a great fit for me. Unfortunately, the McCutchen firm did not think that I would have been a great fit for me.
A quarter century later, I am a solvent attorney…
It is a bizarre business.
Stephen Nash, the Executive Officer of the Superior Court of Contra Costa County, provides a sobering look at court financing in Contra Costa County and throughout the state. These funding shortfalls hit the civil side most dramatically since the criminal side must keep up to preserve constitutional rights of the accused. As a result, civil justice becomes a hazy event far in the future.
Send a message to your State Senator or Assembly representative to provide proper funding to our courts. It is not just an attorney problem, it is a problem for all Californians.
Judge Goode provides a snapshot of the current budget issues in Contra Costa County in Contra Costa Lawyer Online. The last time I appeared to get a trial date, I needed to avoid a number of dates in Spring of 2014. The judge was able to avoid any conflicts since the next available date for trial was April 2015. The courts in this county are overwhelmed. If the system needs to make more cuts, then they will disproportionately affect the civil side, making the concept of civil justice even more illusory.
This is an outstanding article from Justice James Marchiano (Ret.) on the history and consequences of the evolution of ADR in the civil justice system.
As an aside, I miss case management conferences with (then) Judge Marchiano. If both sides arrived early, then you could have a cup of coffee with the clerk and bailiff and rise to first on the calendar.
This article from the ABA Journal identifies a handful of law schools across the country that have reduced tuition.
A college senior who is likely graduating with student loan debt cannot consider taking on so much more debt in an uncertain job market.
In an article in the University of Iowa Law Review, The Psychology Of Procedural Preference, UC Davis Law Professor Donna Shestowsky analyzes ADR options and preferences available to civil litigants.
This article is more an indictment of the budget crises facing courts across the nation than an analysis of the trends in ADR. Almost every dollar eliminated from a court’ s budget comes out of the civil side, since criminal proceedings enjoy constitutional protections that trump budget cuts. In a civil judicial system where resources dwindle by the day, the idea of a jury trial, if not the broader idea of civil justice, becomes more of a far off ideal than a practical reality.
One example from the article is that litigants prefer mediation over nonbinding arbitration. This is not a surprise, as nonbinding arbitration too often produces a result that is unsatisfactory to one side, resulting in a request for a trial. It still exists, at least in California, because a judge can order it for certain cases, such as those with an amount in controversy less than $50,000.00 while mediation remains purely voluntary. I cannot remember the last time a judge ordered one of my cases to nonbinding arbitration because I know better than to reject mediation, especially in counties that have mediation panelists who will provide low- or no-cost mediation services for appropriate cases.
Mediation in the hands of a trained professional gives parties to a dispute the best chance at an economically positive outcome. State courts should do more to encourage mediation, but we must recognize that mediation cannot replace true civil justice. Our budget system must treat and fund the judicial branch as a coequal branch with the legislative and the executive and not as an ungrateful recipient of shrinking largesse.