Legislation: Arbitration Fairness Act Goes to Full House Committee (Web)

On July 15, 2008, the House Judiciary Subcommittee on Commercial and Administrative Law advanced the Arbitration Fairness Act of 2007, HR 3010,  to the full committee. 

A voice vote followed a markup session in which some members expressed concerns that they wanted to address before the full committee takes action on the bill.  Ultimately, the bill was forwarded intact, with alterations expected to take place when the full committee marks up the proposal.

At the subcommittee markup, Rep. Chris Cannon, R., Utah, expressed interest in introducing an amendment to abrogate the bill’s retroactive effect.   The bill would limit the use of arbitration by barring mandatory procedures in disputes involving consumers, employment and franchises.  The bill would also bar mandatory arbitration of civil rights claims, and disputes arising under statutes intended to regulate contracts or transactions between parties of "unequal bargaining power."  As written, the bill extends to all predispute arbitration agreements, not just those made after the bill would be enacted.

Rep. Cannon agreed to withhold new amendments at the markup in order to work with the full committee for more comprehensive changes.

Rep. Melvin Watt, D., N.C., one of the House bill’s 102 co-sponsors, expressed reservations about the bill’s ambiguous language that invalidates pre-dispute arbitration agreements between parties of unequal bargaining power.   He said he believed that the vague standard would spark litigation with erratic results in different courts.  Watt stated that he would vote to move the bill out of subcommittee with the caveat that it needed work.

The subcommittee sent the original bill to the full committee with no amendments.

As of this writing, the full Judiciary Committee has not scheduled a markup of HR 3010, a committee spokesman said.  The Senate has held a hearing on a companion bill, S. 1782, but has not yet posted further action. 

Information on the bill, including the full text, can be found by searching for the “Arbitration Fairness Act of 2007,” here:  http://thomas.loc.gov.

--Timothy Klimpl, CPR Intern