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Monday, May 20, 2013

Boilerplate Symposium VI: Brian Bix on Democratic Degradation

This is the sixth in a series of posts reviewing Margaret Jane Radin's Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law.

Brian.Bix-webBrian Bix is the Frederick W. Thomas Professor for the Interdisciplinary Study of Law and Language at the University of Minnesota Law School

(The following is adapted from a much longer review that will appear in the Tulsa Law Review.)

 In her important, timely, and provocative book,  Boilerplate:  The Fine Print, Vanishing Rights, and the Rule of Law, Margaret Jane Radin offers some scathing observations regarding the motivation and effects of the terms placed in consumer and employee contracts.  She argues that the current contracting practices make a mockery of consent, and undermine the rule of law.  Radin is clearly correct in her essential claim, that for many contracting parties freedom of contract is less an ideal than a sham, and that boilerplate provisions are being used by companies to circumvent substantive rights and remedies consumers, employees, and other contracting parties would otherwise have.       

There is one issue, however, on which I might want to offer a qualified dissent, or at least suggest a slight modification.  In Boilerplate, Radin expresses concerns about the “democratic degradation,” by which she means the way in which important legislatively created rights can be (enforceably) diminished or waived through contractual agreement. (pp. 33-51) Her argument is that businesses should not be able to undo through simple contractual provisions (especially provisions that are hidden, hard to understand, and hard to avoid) what has been passed through the popular, democratic law-making process. 

BoilerplateThe difficulty with this argument is that the ability to modify or waive these rights is itself also the direct or indirect product of legislation.  The most obvious example is the Federal Arbitration Act (FAA), Pub. L. No. 68-401, 43 Stat. 883 (1925), codified as amended at 9 U.S.C. §§ 1-14, which has been the ground for enforcing the arbitration agreements Radin complains about that waive consumers’ and employees’ rights to litigate claims in court and to bring class action claims.  The ability of vendors to remove consumer’s rights has been enhanced substantially by the United States Supreme Court’s robust reading in recent years of the Federal Arbitration Act.  See, e.g., AT&T v. Concepcion, 131 S. Ct. 1740 (2011); Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (2010); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006).  (Of course, one might disagree with the reading of the FAA that the majority of the Supreme Court has given, but that is a separate issue.) 

Similarly, Congress and state legislatures certainly have the ability to make the right to litigate certain claims or to bring class actions non-waivable, and have occasionally done so.  For example, Congress has forbidden mandatory arbitration provisions in consumer credit agreements with members of the United States military. (See John Warner National Defense Authorization Act of 2007, Pub. L. No. 109-364, § 670(a), 120 Stat. 2083, codified at 10 U.S.C. §§ 987(e)(3), (f)(4).)  One can also find state laws that expressly restrict the ability of parties to waive procedural rights, at least for certain categories of transactions.  One example is the Illinois Franchise Act, where Section 4 states:  “Any provision in a franchise agreement that designates jurisdiction or venue in a forum outside of this State is void, provided that a franchise agreement may provide for arbitration in a forum outside of this State.”  815 ILCS 705/4.

Someone might object that the argument here is putting too much argumentative weight on the fact that federal or state legislatures have not acted to restrict the effect of contractual boilerplate, and that one should not make too much of legislative inaction.  However, the fact that state and federal legislatures have shown the ability and willingness to restrict the use of certain kinds of boilerplate means that the failure to do so in other circumstances is at least noteworthy.  Additionally, Congress has sometimes offered express permission to have certain types of claims resolved by arbitration or other forms of alternative dispute resolution.  For example, the Civil Rights Act of 1991 includes the following language: “Where appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including . . . arbitration, is encouraged to resolve disputes arising under [Title VII].”  Pub. L. No. 102-166, § 118, 105 Stat. at 1081.)

It is not democratic degradation, but the lesser side of American political life – the power of business interests, business lobbying, corporate money after Citizens United, etc. – that contributes significantly to the current contract law world in which rights disappear through boilerplate.  One need only watch the way that the Congress continues to hobble the Federal Consumer Finance Agency (there had once been talk of that agency acting against mandatory arbitration in consumer and employment agreements, but that now seems highly unlikely).  

[Posted, on Brian Bix's behafl, by JT]

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