Mandatory binding arbitration

<div class='quotetop'>QUOTE(dumas @ Sep 19 2006, 02:58 PM) [snapback]321767[/snapback]</div>

You won't be able to buy ANY car these days without signing one of these. Likewise most employers are now requiring new employees to sign these. AS much as I hate them, these are a fact of life.

Arbitration is in theory a good thing, but in practice it is not.

Arbitration is a business, and a company (like Toyota) will send all its arbitration to one of the large arbitration firms. If this firm consistently rules against Toyota, they will likely take their business elsewhere.

Yes, it's unfair, but these days ALL car companies use them. Get used to it, or get used to riding the bus.

This applies to used cars as well, as any delaership will now make you sign one of these.

Only by doing a private party sale can you avoid this (even then the seller can include this if he/she wants).

 

<_< As for me... I tell them to "NO WAY, José!!!" To surrender your rights to litigate should the Dealer damage your car when servicing or repairing it seems a bit much. (Assumed: This Agreement would remain in force after a new car was delivered...) Sounds like they want to save $$$ on their liability insurance coverage.

 

<div class='quotetop'>QUOTE(Charles Suitt @ Sep 19 2006, 03:24 PM) [snapback]321798[/snapback]</div>

Check your documents. Chances are you signed one. They will not sell a car without one these days. Standard operating procedure now.

 

Just make a notation in the margin that you signed under duress, stupid sales person will never read it. Or, sign with a name other than your own, they will never catch that either. Don't know if any of the above will hold in court - but it might give you a leg to stand on.

 

<div class='quotetop'>QUOTE(kirbinster @ Sep 19 2006, 05:29 PM) [snapback]321870[/snapback]</div>

Not a chance. First, it is NOT duress. Duress: "1)Strictly, the physical confinement of a person or the detention of a contracting party's property; 2)Broadly, a threat of harm made to compel a person to do something against his or her will or judgment; 3)The use or threatened use of unlawful force." from Black's Law Dictionary. This is ignoring the fact that if you write this is being signed under duress it obviously isn't.

The second is not valid either. It is fraudulent to not sign something that is part of a contract simply to avoid not being bound by that. Why not just sign some other name to the part where you agree to pay them, but sign your real name on the title. Free car! Nope, sorry, doesn't work like that. It is understood these days that signing an arbitration agreement is common practice. A judge will not have sympathy for you in trying to cheat the system. And good luck in trying to find a lawyer in trying to defend you.

 

They may be common, but I wonder how much they have been tested. In general you cannot sign away a right you do not currently have. I don't currently have the right to sue Toyota or my dealership over damage that I have not yet received, so I cannot sign that right away. I would guess a good lawyer could get you around a "binding arbitration" agreement. Particularly if all dealerships require one for the purchase of a new car. Not being able to purchase a new car without giving up some of your rights sounds like it might qualify as duress, especially to a skilled enough lawyer.

 

And as a follow up, I didn't remember being asked/forced to sign a binding arbitration agreement with my dealership (or with Toyota for that matter) when I purchased my Prius, but I wanted to check the paperwork before making the claim that I hadn't. Nothing of the like in my paperwork, nor do I recall any mention of such an agreement at the dealership. Same goes for the other new cars (also Toyotas) that I've purchased. Where are people running into such agreements?

 

i'll check my paperwork but i don't recall signing one of those.

 

Just checked mine, and there is nothing of the sort. Car was bought at Tony Devino's in Ogden Utah.

 

<div class='quotetop'>QUOTE(dumas @ Sep 19 2006, 03:38 PM) [snapback]321916[/snapback]</div>

Hmmm...Southeast Region. Not owned by Toyota, and maybe their business practices are such that their dealers need it for protection.

 

<div class='quotetop'>QUOTE(archermoo @ Sep 19 2006, 06:12 PM) [snapback]321903[/snapback]</div>

More than you or I will ever know. Only Toyota and the arbitration company they use will ever know. They have non-disclosure requirements.

<div class='quotetop'>QUOTE(archermoo @ Sep 19 2006, 06:12 PM) [snapback]321903[/snapback]</div>

Not so. You have the inherent right to sue someone IF there is a cause to sue. With an arbitration agreement, you waive that right, even if you have a reason to sue.

<div class='quotetop'>QUOTE(archermoo @ Sep 19 2006, 06:12 PM) [snapback]321903[/snapback]</div>

There are often ways around an arbitration agreement. If there is a statutory right to sue, then no agreement can take that away. It all depends on the details of the situation. I'll say this though, in most circumstances you will end up sitting across from Toyota at an arbitration.

<div class='quotetop'>QUOTE(archermoo @ Sep 19 2006, 06:12 PM) [snapback]321903[/snapback]</div>

Not a chance. No sane lawyer would try and argue that. Check the definition I posted. Duress is universally interpreted as some threat of physical harm. Unless Toyota tells you that they are going to kill you or cut of your hands or something like that if you don't sign it, there isn't any duress. NO lawyer would try and argue that not being able to buy a new car counts as duress. The opposing party would file a FRCP 12(B)(6) Motion to dismiss for failure to state a claim. Judge would grant the motion. Non-legaleese = you have no case now get out of my court.




Also, the dealership may keep the signed copy of the arbitration agreement. I'm sure they'll make a copy of you want. But trust me, if you own a Prius, you signed one. Someplaces incproprate them in the fine print as a standard part of the contract and/or financing agreement, so it would not have been a separate document. Read all the fine print, it's there somewhere. Some states don't require disclosure of them, some do. States also vary the extent of the agreements to different levels. You'd have to check with your state's code to see.

Speaking of financing, check the contract for anything you've bought recently and had financed. I guarantee that on most (if not all) there is an arbitration agreement. I just bought some a new washer/dryer set at Best Buy with a 24 month no-interest deal. I read the contract later, and sure enough there is an arbitration agreement.


These days pretty much every business deal where you have to sign somehting has an arbitration agreement. Get used to them. Right now there is really no way to do anything about them short of a Congressional act. Problem is that te people with the $$$ love arbitration. Saves them billions. You or I may be sued once or twice in our lives if were unlucky (or careless). Inmagine how many times a huge corporation (even a goodie like Toyota) is used every year. On a corporate level, between big businesses where milions or billions ar at stake it makes sense to arbitrate. On a person to a business dispute it makes less sense.


Disclaimer: I'm not providing any legal advice here, merely some information. If you need actual advice, retain the services of a lawyer.

 

DISCLAIMER: I am an attorney. I run a litigation practice, and I'm a trial attorney. I believe in the people i represent and I fight as hard as I can for them. period.

That being said, arbitration clauses are indeed a dime a dozen. They seem to be everywhere these days. My personal opinion is that I absolutely HATE THEM!! Especially the AAA Binding Arbitration clauses in the AIAA Contracts.

It is my humble opinion that no one, NO ONE should ever surrender their absolute constitution right to a trial by a jury of their peers. That being said, I have had many clients come to me for assistance after signing a contract with a binding arbitration clause. Judges here love them. It relieves the Judges from the responsibility of making a decision. They can pass the buck to someone else, and as elected officials, that is indeed a real break for them.

How do I handle them? I have had many clients who have signed these type documents and some have actually proceeded to arbitration. Some clients have been satisfied, some dissatisfied. Probably 80% of the time I just sue the bastards. They have to come to Court to at least assert the arbitration clause as a defense and ask the court to stay the suit. By that time, I've already sent out volumes of discovery, Interrogatories, Requests for Production, and Requests for Admissions. If they ever so much as answer one of these, they have waived the arbitration clause, there are cases directly on point.

I also sue them for Unfair and Deceptive Trade Practices, Constrcuctive Fraud, asserting as affirmative defenses to any counterclaim that the contract was an adhesion contract anyway, and would have been a restraint of trade to require this provision in all sales contracts.

So, the short answer is if you have a problem, sue them anyway. Exercise your rights!! They'll only assert the arbitration clause anyway, and they may not be successful. Yes, get a smart attorney, but attorneys are like doctors, if you don't like yours, get a second opinion. There are some of us out here who really do care. Care about our clients, the causes we support, and trying to make this world, or at least our corner of it, a better place.

Thats my soapbox for the evening. My 2 cents worth, and my opinion. and I realize its only worth just that..... 2 cents (but I get more for that opinion from 9-5 )

Peace all......

p. s. DocVijay is correct in much of what he said above, Especially the part about asserting duress as a defense to a binding arbitration clause. Only in perhaps a very extreme situation would that work, and it would probably not be the type of situation you would normally run into purchasing a car, unless they locked you in a room for hours, dripping water on your forhead, while ducktaped to a cold metal chair......

 

<div class='quotetop'>QUOTE(DocVijay @ Sep 19 2006, 05:15 PM) [snapback]321959[/snapback]</div>

Doc, I know that your are a law student, but didn't your Civil Procedure professor teach you that the Federal Rules of Civil Procedure apply mostly in the federal courts but not in the overwhelming majority of state courts? Besides, some states, California for example, have very pro consumer legislation that makes it easy to void mandatory arbitration clauses in most situations where it was not specifically negotiated by the parties (such as when it is standard language in a boiler plate contract).

Read Rangerdavid's post, he's got it right.

 

<div class='quotetop'>QUOTE(Rangerdavid @ Sep 19 2006, 08:41 PM) [snapback]321973[/snapback]</div>

Amen there about hating them. In theory they sound good, but in practice they are horrible. It would be a wonderful day when they got rid of them completely! I would love to be able to focus solely on finding a way to keep these out of business dealings for the little guys like us. If corporations want to keep using them in their dealings with each other, then fine, but leave me out of it.

As I pointed out and Rangerdavid also showed, there are ways around it. I didn't go into the detail of how like he did, but then again he has more practical experience, while mine is all theory right now. As he pointed out, you can always file a suit. Anyone can sue sue for any reason. All it takes is a few forms and about a $100 or so. Filing a lawsuit is easy. Winning one is a different case. If you can somehow convince a judge that you have a reason not to arbitrate then great. If you can get the company to slip up and waive the arbitration agreement, even if inadvertantly, then great. There are two views of this. The first is that these big corporations are sued enough to have learned not to fall for these tactics. While this may often be true, they are also huge organizations with often less than perfect communication. So sometimes things go your way.

Anyway, just because you sign one does not mean that your out of luck should something happen.

For example, those liability release forms that you have to sign when participating in risky activities really don't hold up very well in court. But most people sign it and assume that it means they have no recourse. If they can discourage a decent number of people to never file suit, then those are as good as cases they won. If someone sues, it often doesn't matter if they "signed away their life" to them. It all depends on the situation.

Anyway, if you do run into a problem, hire a lawyer. They'll be able to give you advice on what to do in your situation.

...and read that fine print. You'll be surpised at what you find. Credit cards, banks, cars, homes, any sort of financing, you name it. They are everywhere now.

<div class='quotetop'>QUOTE(IsrAmeriPrius @ Sep 19 2006, 09:32 PM) [snapback]322004[/snapback]</div>

Whoops, replied while I was replying.

Yes, I learned that. But I also learned that many states have adopted most of the Federal Rules in some capacity. In state court you might not file a FRCP Rule 12 motion, but there would be some equivalent motion to dismiss rule in the state rules. All states differ to some degree, so it's impossible to learn them all. For us, we focused on Federal, and supplemented with Florida as necessary.

As for California's position on the agreements, I did say a few posts ago that, "Some states don't require disclosure of them, some do. States also vary the extent of the agreements to different levels. You'd have to check with your state's code to see."


Finally I did read Rangerdavid's post. I know he got it right. If you read his post you'd have seen that I did too.

 

I don't think I had one of those shoved down my throat.
.
How about landing on (800) 331-4331 first thing tomorrow morning
and complaining VEHEMENTLY about this dealer practice?
.
_H*

 

Actually I just bought my Prius last week and specifically looked for that clause. It was well hidden a few years ago on my 4Runner. It was on page 1 of the purchase agreement and was NOT binding. It said that either party could go to court after arbitration. Very unusual but it does refute the statement that everyone signed a binding agreement.

 

<div class='quotetop'>QUOTE(Ghostrider @ Sep 19 2006, 10:13 PM) [snapback]322033[/snapback]</div>

Actually, I didn't say binding. I just said arbitration agreement. And there was one there, wasn't there.