Professor Ray Warner will be in Vienna, Austria, this week working with United Nations UNCITRAL Working Group VI. Working Group VI is preparing an international model law on secured transactions.
The American Banker ran Professor Jeff Sovern’s op-ed, Arbitration Clauses Trap Consumers with Fine Print, on the St. John’s Arbitration Study. Professor Sovern collaborated on the study with Professors Elayne Greenberg and Paul Kirgis, and the director of St. John’s Institutional Assessment, Yuxiang Liu. The full study can be found here.
DiLorenzo’s Papers Published in New York Law Journal and Accepted World Congress of the International Society for the Philosophy of Law and Social Philosophy
Professor Vincent DiLorenzo’s article, “Congress Exempts Condominiums from the Interstate Land Sales Act,” was published in the New York Law Journal on November 12, 2014. The article examines the provisions of the Interstate Land Sales Act that allow purchasers to revoke contracts for the sale of condominiums when developers (a) have not complied with the registration and disclosure requirements of the Act, or (b) have not complied with the contractual requirements contained in the Act, including limits on available remedies for breach. HR 2600, passed in September and signed by the President, exempts condominiums from the registration and disclosure requirements of the Act. However, it is not clear if Congress intended to exempt condominium developers from the Act’s contractual requirements. This article explores that ambiguity in the statute and the courts’ interpretation of the scope of earlier exemptions that arguably extended to the Act’s contractual requirements.
In addition, Di Lorenzo’s paper, “Reason, Cognition and Emotion: A Study of Regulatory Standards and Enforcement Policy,” was accepted and will be presented at the World Congress of the International Society for the Philosophy of Law and Social Philosophy.
Professors Jeff Sovern, Elayne Greenberg, and Paul Kirgis, along with Yuxiang Liu, have posted a draft of their article, ‘Whimsy Little Contracts’ with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements, to SSRN. Here is the abstract:
Arbitration clauses have become ubiquitous in consumer contracts. These arbitration clauses require consumers to waive the constitutional right to a civil jury, access to court, and, increasingly, the procedural remedy of class representation. Because those rights cannot be divested without consent, the validity of arbitration agreements rests on the premise of consent. Consumers who do not want to arbitrate or waive their class rights can simply decline to purchase the products or services covered by an arbitration agreement. But the premise of consent is undermined if consumers do not understand the effect on their procedural rights of clicking a box or accepting a product.
This article reports on an empirical study exploring the extent to which consumers are aware of and understand the effect of arbitration clauses in consumer contracts. We conducted an online survey of 668 consumers, approximately reflecting the population of adult Americans with respect to race/ethnicity, level of education, amount of family income, and age. Respondents were shown a typical credit card contract with an arbitration clause containing a class action waiver and printed in bold and with portions in italics and ALLCAPS. Respondents were then asked questions about the sample contract as well as about a hypothetical contract containing what was described as a “properly-worded” arbitration clause. Finally, respondents were asked about their own experiences with actual consumer contracts.
The survey results suggest a profound lack of understanding about the existence and effect of arbitration agreements among consumers. While 43% of the respondents recognized that the sample contract included an arbitration clause, 61% of those believed that consumers would, nevertheless, have a right to have a court decide a dispute too large for a small claims court. Less than 9% realized both that the contract had an arbitration clause and that it would prevent consumers from proceeding in court. With respect to the class waiver, four times as many respondents thought the contract did not block them from participating in a class action as realized that it did, even though the class action waiver was printed twice in bold in the sample contract, including one time in italics and ALLCAPS. Overall, of the more than 5,000 answers we recorded to questions offering right and wrong answers, only a quarter were correct.
Turning to respondents’ own lives, the survey asked if they had ever entered into contracts with arbitration clauses. Of the 303 respondents who claimed never to have done so and who also answered a question asking whether they had accounts with certain companies that include arbitration clauses in their contracts, 264, or 87%, did indeed have at least one account subject to an arbitration clause.
These and other findings reported in this Article should cause concern among judges and policy-makers considering mandatory pre-dispute consumer arbitration agreements. Our results suggest that many citizens assume that they have a right to judicial process that they cannot lose as a result of their acquiescence in a form consumer contract. They believe that this right to judicial process will outweigh what one respondent referred to as a “whimsy little contract.” Our results suggest further that citizens are giving up these rights unknowingly, either because they do not realize they have entered into an arbitration agreement or because they do not understand the legal consequences of doing so. Given the degree of misunderstanding the results demonstrate, we question whether meaningful consent is possible in the consumer arbitration context.
Peggy McGuinness presented her forthcoming book chapter, “Treaties, Federalism and the Contestation of Missouri v. Holland,” at the Pace University Law School faculty colloquium on October 22. The Chapter will appear in Treaty Practice of the United States (Dubinsky, Fox, Roth eds., Cambridge Univ. Press) to be published in 2015. Professor McGuinness participated in a panel discussion of the book at International Law Weekend at Fordham Law School on October 25.
The Philadelphia Inquirer story, Consumers Rarely Use the Right to Cancel a Contract reports on Professor Jeff Sovern’s article, Written Notice of Cooling-Off Periods: A Forty-Year Natural Experiment in Illusory Consumer Protection and the Relative Effectiveness of Oral and Written Disclosures, forthcoming in the University of Pittsburgh Law Review. The article also quotes from an interview with Professor Sovern. The article states:
Sovern, who teaches consumer law and civil procedure at New York’s St. John’s University Law School, analyzed survey responses from 155 businesses that informed consumers of their right to cancel a deal. It rarely seemed to matter. . . .
“I’ve been teaching these laws for more than a quarter-century, and I’ve been wondering if they actually helped anybody,” [Sovern] told me last week.
For the full story, with additional quotes and discussion of Sovern’s research go to the full article.
This Friday, October 10th, Professor Eva Subotnik will join Professor Molly van Houweling of UC Berkeley Law School and Professor Daniel Gervais of Vanderbilt Law School for a panel discussion at Columbia Law School’s symposium addressing the concerns of professional authors, artists and performers and suggesting changes to law and practice that would benefit authors and encourage creativity. Professor Subotnik will present a talk entitled “Actors and Artists as Authors,” forthcoming in the Columbia Journal of Law & the Arts, which will explore the degree to which different kinds of creative professionals can and do benefit from the status of “author” under the Copyright Act.
Marc DeGirolami’s new essay, Constitutional Contraction: Religion and the Roberts Court, will be published in a symposium issue of the Stanford Law and Policy Review next year. Here is the abstract:
This essay argues that the most salient feature to emerge in the first decade of the Roberts Court’s law and religion jurisprudence is the contraction of the constitutional law of religious freedom. It illustrates that contraction in three ways.
First, contraction of judicial review. Only once has the Roberts Court exercised the power of judicial review to strike down federal, state, or local legislation, policies, or practices on the ground that they violate the Free Exercise or Establishment Clauses. In this constitutional context the Court has been nearly uniformly deferential to government laws and policies. That distinguishes it from its two predecessors — the Rehnquist and Burger Courts — both of which exercised judicial review more regularly.
Second, contraction in the range of voting patterns. The votes of the Justices in law and religion cases overwhelmingly are either unanimous or split 5-4, with relatively few separate dissents or concurrences expressing distinctive approaches, and with the split correlating with partisan political or ideological divisions. The “liberal” and “conservative” wings vote in bloc, and frequently reason in bloc as well. This again contrasts with the voting patterns of prior Courts in religious freedom cases.
Third, contraction in coverage. As a substantive matter, the Court is narrowing the religion clauses. Every member of the Court seems now to accept that Employment Division v. Smith properly interpreted the Free Exercise Clause. Matters are more complicated for the Establishment Clause, where there is far greater division among the Justices. Nevertheless, the essay claims that the Court is moving in a variety of ways toward a narrow interpretation of the Establishment Clause as well.
Whether the Roberts Court’s contraction of the religion clauses, and its general preference for narrow readings of both, are positive developments will depend on one’s views about fundamental questions of constitutional interpretation. Yet there is a conceptual unity to the Court’s approach — logical and complementary, even if not inevitable: just as the Rehnquist Court narrowed the scope of constitutional protection for free exercise, so, too, is the Roberts Court narrowing the scope of constitutional prohibition under the Establishment Clause. In this corner of constitutional law, the Court is gradually withdrawing from the scene.
Professor Cheryl Wade was invited to participate at a Financial Roundtable on comparative corporate governance sponsored by the law schools at the University of British Columbia and Osgoode Hall last month. Each participant contributed a chapter about corporate governance, finance, or securities law that discussed where the world is in the aftermath of the financial crisis.
Professor Wade’s article, Gender Diversity on Corporate Boards: How Racial Politics Impedes Progress in the United States, was just published in a symposium issue of the Pace University School of Law International Law Review on Comparative Sex Regimes and Corporate Governance.
Professor Patricia Montana’s article, Legal Education Reform: Simulating Complex Litigation Practice in an Advanced Legal Writing Course, has been accepted for publication in a German, peer-edited law journal called “Zeitschrift für Didaktik der Rechtswissenschaft” (ZDRW). The journal focuses on legal education and is published quarterly by Nomos, one of the four leading publishing houses in Law in Germany. Her article will appear in the first issue of 2015 and will be printed in English.