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New House Bill Changing Arbitration Rules Could Have TCPA Implications

A gavel and an arbitration agreement

Fri, 09/13/2019 - 15:07

As one of their first acts upon returning from the August recess, the House of Representatives Judiciary Committee passed the Forced Arbitration Injustice Repeal (FAIR) Act. This bill could have consequences for Telephone Consumer Protection Act (TCPA) lawsuits in the unlikely event that it becomes enacted into law.

The bill is primarily designed to address the proliferation of mandatory arbitration agreements that make it extremely difficult—if not functionally impossible—for individual consumers and employees to sue American corporations in federal court. The FAIR Act seeks to eliminate pre-dispute arbitration agreements, which require parties to enter into arbitration and prevent the possibility of lawsuits. The bill would still allow for arbitration to exist as a possibility for resolving disputes as a voluntary, rather than mandatory, agreement.

While the bill’s advocates have touted its benefits in removing roadblocks to such things as civil rights and sexual harassment lawsuits, it is likely to impact the world of TCPA disputes. Many TCPA cases are resolved in arbitration and any sort of major reform to arbitration rules is likely to have an impact. Indeed, without forced arbitration agreements, it is likely that many plaintiffs will choose to forgo arbitration and the percentage of TCPA cases that proceed to costly, time-intensive lawsuits or class actions will increase.

The FAIR Act has 220 co-sponsors and bipartisan support in the House of Representatives, making it likely that it will will pass the House. But with Republican control of the Senate and White House, it is extremely unlikely that it will ever be enacted into law. In fact, experts give Senator Richard Blumental’s companion bill in the Senate a mere 3% chance of passing. Of course, continued Republican control of the federal government through future elections is far from assured. While the current iteration of the FAIR Act will likely not become law, the subject of arbitration law reform could return in the future.