Bill Text: NJ SR68 | 2016-2017 | Regular Session | Introduced
Bill Title: Urges Congress and President of US to enact "Arbitration Fairness Act of 2015."
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2016-09-26 - Introduced in the Senate, Referred to Senate Labor Committee [SR68 Detail]
Download: New_Jersey-2016-SR68-Introduced.html
Sponsored by:
Senator LORETTA WEINBERG
District 37 (Bergen)
Senator NICHOLAS J. SACCO
District 32 (Bergen and Hudson)
SYNOPSIS
Urges Congress and President of US to enact "Arbitration Fairness Act of 2015."
CURRENT VERSION OF TEXT
As introduced.
A Senate Resolution urging Congress and the President of the United States to enact the "Arbitration Fairness Act of 2015."
Whereas, The litigation process can be cumbersome and expensive, and alternative methods of dispute resolution, such as arbitration, have developed over the years in order to reduce the burden of litigation on both litigants and the court system; and
Whereas, The "Federal Arbitration Act" (FAA) was signed into law in 1925 in order to facilitate the use of private arbitration for disputes arising out of contracts, maritime transactions, or commerce, as a means of avoiding delays and the high costs of litigation; and
Whereas, The FAA was originally intended to apply to disputes between parties of similar sophistication and bargaining power; however, a series of decisions by the Supreme Court of the United States has rendered the FAA applicable to commercial disputes between consumers and business proprietors as well; and
Whereas, Consumers tend to be disadvantaged, in terms of financial resources and legal expertise, as compared to a proprietor with whom they conduct business; and
Whereas, When a proprietor requires a consumer to sign an elaborate contract containing a mandatory binding arbitration clause, which is often not clearly understood by the average consumer, the consumer is denied a meaningful choice as to whether to submit a dispute to arbitration or to exercise his right to a fair hearing in a court of law; and
Whereas, Consumers are further disadvantaged when a proprietor retains the right to select an arbitrator without input from the consumer, providing the arbitrator with incentive to find in favor of the proprietor in order to continue the profitable relationship; and
Whereas, Mandatory binding arbitration further diminishes a consumer's rights while protecting unscrupulous business practices by eliminating the ability of a consumer to join with other aggrieved consumers in bringing a class action law suit against a proprietor; and
Whereas, When engaged on a truly voluntary basis, arbitration can be beneficial to all parties involved by providing a more-efficient, low-cost alternative to litigation; and
Whereas, A bill has been introduced in the United States Congress by Senator Al Franken and Representative Hank Johnson, known as the "Arbitration Fairness Act of 2015," (AFA) which would amend the FAA by precluding the use of pre-dispute binding arbitration agreements in consumer disputes; and
Whereas,
The AFA would grant jurisdiction to federal courts to determine whether
arbitration is required, thereby removing some of the hurdles a consumer may
face in seeking legal redress from a sophisticated business organization; now,
therefore,
Be It Resolved by the Senate of the State of New Jersey:
1. The Senate respectfully urges the Congress and President of the United States to enact the "Arbitration Fairness Act of 2015," currently pending before the House of Representatives as bill number H.R.2087 and the Senate as bill number S.1133.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Secretary of the Senate to the presiding officers of the United States Congress, each of the members of the Congress elected from the State of New Jersey, and the President of the United States.
STATEMENT
This resolution urges the Congress and President of the United States to enact the "Arbitration Fairness Act of 2015," (AFA) currently pending before the House of Representatives as bill number H.R.2087, and the Senate as bill number S.1133.
The litigation process can be expensive and time-consuming. To mitigate these burdens, alternative dispute resolution methods, such as arbitration, have developed over the years. In order to facilitate the use of arbitration, the Federal Arbitration Act (FAA) was signed into law in 1925, providing a legal framework for the arbitration process. Over the years, the Supreme Court has expanded the applicability of the FAA to include disputes raised by consumers.
Initially, arbitration developed as a means of resolving disputes between two similarly situated parties, in terms of power and resources; however, with the inclusion of consumer disputes, all too often, arbitration clauses are tucked into the fine print of a contract which a consumer must sign at the outset of a business transaction, often without fully understanding the rights being relinquished or the potential problems the consumer may encounter should a dispute arise.
This resolution seeks to level the playing field between businesses and consumers by urging the federal government to enact the AFA, thereby preventing large companies from preying on consumers through forced arbitration. By denying business proprietors the ability to require that consumers blindly consent to binding arbitration before a dispute has arisen, and permitting courts to hear disputes as to the validity of such arbitration clauses, the AFA will eliminate the get-out-of-jail-free card that proprietors have enjoyed, and will help to make the arbitration system a fair and just alternative to litigation, as it was intended to be.
