Gaming the System: Protecting Consumers from Unconscionable Contractual Forum Selection and Arbitration Clauses

66 Hasting L.J. 719 (April 2015)

U of Texas Law, Public Law Research Paper No. 568

43 Pages Posted: 25 Aug 2014 Last revised: 27 Mar 2015

Date Written: April 1, 2015

Abstract

The Supreme Court’s 2013 decision in Atlantic Marine v. U.S. Dist. Ct. perhaps usefully resolved the issue of the appropriate procedural means for ascertaining the proper court where the parties’ agreement includes a forum selection clause. However, the Court’s decision was predicated on the presupposition that the forum selection clause was valid ― a presupposition that begged that threshold question. Thus, the Court’s presupposition threw a significant set of antecedent questions into legal limbo, namely: (1) what body of law applies to evaluate the validity and enforceability of a forum selection clause, (2) what court should make that determination, and (3) when should that determination be made? This article explores the problem of forum selection, choice-of-law, and arbitration clauses in the context of the federal courts’ longstanding fixation on the problem of creative forum-shopping and other gamesmanship to gain litigation advantage, which strategies the courts have long eschewed. Nonetheless, despite the concerted efforts of courts and legislators to thwart such techniques through judicial fiat and legislative enactment, actors in the judicial arena continue to invent resourceful methods to circumvent new constraints. This article argues that consumer forum selection and arbitration clauses ought to be viewed through the lens of litigation gamesmanship, as procedural means whereby corporate defendants are able to establish forum advantage without any countervailing benefit to consumers who unwittingly agree to such clauses. The Court consistently has turned a blind eye and deaf ear on the problem of consumer forum selection and arbitration clauses, instead merging consideration of consumer agreements with jurisprudence developed in the dissimilar context of sophisticated business partners freely negotiating at arms-length. The Court’s continued failure to distinguish and address the problem of consumer forum selection and arbitration clauses ― left unchanged or worsened by Atlantic Marine ― calls for legislative action to close this legal advantage conferred on corporate defendants who exploit it to their economic benefit.

Keywords: forum selection clause, arbitration clause, Atlantic Marine, unconscionable forum selection clause, unconscionable arbitration clause, AT & T v. concepcion, Carnival Cruise Lines v. Shute, The Bremen, Stewart v. Ricoh, Ferens v. John Deere, Van Dusen v. Barrack, choice of law

Suggested Citation

Mullenix, Linda S., Gaming the System: Protecting Consumers from Unconscionable Contractual Forum Selection and Arbitration Clauses (April 1, 2015). 66 Hasting L.J. 719 (April 2015); U of Texas Law, Public Law Research Paper No. 568. Available at SSRN: https://ssrn.com/abstract=2485848

Linda S. Mullenix (Contact Author)

University of Texas School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1375 (Phone)

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