CAOC demands JAMS neutrals declare position

Plaintiff lawyers want to get JAMS arbitrators in California on the record about whether they think mandatory arbitration clauses that prohibit consumer class actions should be enforced.

And in a letter last week, the attorneys strongly hinted that the answer will affect neutrals' bottom line.

The Consumer Attorneys of California and five other lawyer groups sent letters to more than 100 JAMS neutrals, demanding that they state whether they believe that such clauses violate the company's longstanding standards of fairness.

In order to make an informed choice on using JAMS or its neutrals as providers, we want to know where each neutral stands on this issue," the plaintiff advocates wrote. The six organizations plan to report all responses on their Web sites. And anyone who doesn't answer will be presumed unwilling to stand against such class action prohibitions.

Melissa Anderson, communications manager for Irvine-based JAMS, said Friday that she could not comment on letter because she had not seen it yet.

About a year ago, JAMS got cheers from the plaintiff bar when the ADR provider announced a new policy, saying that it would no longer enforce contract clauses that forbid consumer and employment class actions.

That got some corporate clients and their lawyers riled up - and at least one large client took its business elsewhere.

Four months later, JAMS reversed course. At the time, the company said that the legality of class action preclusion clauses have varied by jurisdiction, and that "JAMS and its arbitrators will always apply the law on a case-by-case basis in each jurisdiction."

Some plaintiff lawyers accused JAMS of caving under financial pressure. The company insisted its about-face was "not a business issue," saying the shift in position was necessary to avoid any perception that it was favoring the plaintiff bar.

Thomas Brandi, the CAOC's designated liaison on the issue, says that some in the plaintiff bar have heard privately from "several of the JAMS judge" that they disagree with the ADR provider's current stance.

In their letter, the plaintiff lawyer groups point out that JAMS still has written standards for consumer arbitrations that say JAMS will only work with mandatory arbitration clauses that don't preclude "remedies that would otherwise be available to the consumer" under federal, state or local law.

The letter from the CAOC and other groups makes it clear that, in their eyes, "class action prohibitions" violate those standards.

And they ask each neutral to sign a statement saying whether they agree with that assessment. "The absence of a response will be deemed a lack of commitment to enforcing JAMS' Minimum Standards, the letter says.

Alan Kaplinsky, a Philadelphia-based partner at defense firm Ballard Spahr Andrews & Ingersoll who vigorously fought the policy JAMS announced last November, called the plaintiff lawyers' letter "outrageous."

"I would compare it to anybody writing a letter to a judge out of the blue, asking a judge, 'If you were to get a case that would involve a particular issue, how would you decide it?' And your response or non-response would be published on our Web site. … It's completely out of bounds."

And he contrasts it with the pressure that he and other attorneys put on JAMS to reverse its 2004 policy, pointing out that they dealt with JAMS as a body, "like if a court adopted a rule of procedure" and critics commented on it. "There's nothing wrong with that," he said.

Brandi, a San Francisco plaintiff lawyer, counters that the letters aren't pushing for a policy change, but for transparency.

He contrasts arbitration with the court system, where the proceedings are open and clients have leeway to avoid a judge with a peremptory challenge.

"What we'll know as a result of this letter is, which judges are on the record saying they'll uphold the standards of fairness," he said.

The Consumer Attorneys Association of Los Angeles, San Francisco Trial Lawyers Association, Trial Lawyers for Public Justice, National Employment Lawyers Association and National Association of Consumer Advocates also signed onto the letter.

By Pam Smith
RECORDER STAFF WRITER

The Recorder
Monday, November 7^th, 2005