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How Corporations Award Themselves Legal Immunity
Whether it's in your employment contract or the paperwork for a cell phone, it's odds on that the small print says you can't sue
Worried about the influence of money in American politics, the huge cash payouts that the US supreme court waved through by its Citizens United decision – the decision that lifted most limits on election campaign spending? Corporations are having their way with American elections just as they've already had their way with our media.
But at least we have the courts, right?
Wrong. The third branch of government's in trouble, too. In fact, access to justice – like access to elected office, let alone a pundit's perch – is becoming a perk just for the rich and powerful.
Take the young woman now testifying in court in Texas. Jamie Leigh Jones claims she was drugged and gang-raped while working for military contractor KBR in Iraq (at the time, a division of Halliburton). Jones, now 26, was on her fourth day in post in Baghdad in 2005 when she says she was assaulted by seven contractors and held captive, under armed guard by two KBR police, in a shipping container.
When the criminal courts failed to act, her lawyers filed a civil suit, only to be met with Halliburton's response that all her claims were to be decided in arbitration – because she'd signed away her rights to bring the company to court when she signed her employment contract. As Leigh testified before Congress, in October 2009, "I had signed away my right to a jury trial at the age of 20 and without the advice of counsel." It was a matter of sign or resign. "I had no idea that the clause was part of the contract, what the clause actually meant," testified Jones.
You've probably done the very same thing without even knowing it. When it comes to consumer claims, mandatory arbitration is the new normal. According to research by Public Citizen and others, corporations are inserting "forced arbitration" clauses into the fine print of contracts for work, for cell phone service, for credit cards, even nursing home contracts, requiring clients to give up their right to sue if they are harmed. Arbitration is a no-judge, no-jury, no-appeal world, where arbitrators are (often by contract) selected by the company and all decisions are private – and final.
Deadly small print is not only for subprime mortgage-seekers – and neither are the costly repercussions. When corporations evade the bills for harm, no matter how huge (for medical malpractice, say, or pension fund collapse), the liability is passed on to individuals, and then to taxpayers. A new documentary, Hot Coffee, premiering 27 June, on HBO, lays out the whole picture – and it's devastating.
First-time filmmaker Susan Saladoff starts where for many Americans, the term "tort reform" first appeared. Stella Liebeck, an 81-year-old woman, sued McDonald's over coffee that was "too hot" – and became the "welfare queen" of tort reform. Pilloried in corporate-funded PR and in the media after a jury imposed an initial $2.7m in punitive damages, lobbyists used Liebeck's case to deride "frivolous" lawsuits and bludgeon congressional and state legislators into passing laws that set maximum "caps" on damages. (Politicians all the way up to President George W Bush needed no bludgeoning: "frivolous suits" became a campaign trail hit.)
But look at the pictures Saladoff shows in Hot Coffee and you'll see Liebeck's legs seared by savage, third-degree burns, which covered over 16% of her body. As any reporter could have discovered at the time, McDonalds' protocols kept its coffee at 82-87ºC (180-190ºF). Over 700 people had been burned by it. Ten years of suits and claims had forced no change. Liebeck's suit was anything but "frivolous".
Likewise, Jones's suit. Or the big-business funded effort to unseat justices opposed to "tort reform" – also profiled in Hot Coffee. It's taken Jones nearly six years and a hearing in the US Senate to force her employer, Halliburton into open court, at last, in Houston this week. Jones tells Saladoff she's driven by concern for other young women in her position – in no position, that is, thanks to mandatory arbitration, to know the truth about past claims and what they may be getting into when they sign an employment contract.
Saladoff, a plaintiff's attorney for 25 years, is driven, too – by a belief in the seventh amendment right to a jury trial. "Tort" is a complicated word for a simple thing – "harm," she explains. The courts are supposed to be the branch of government where citizens and corporations have an equal shot. The US supreme court in Dukes v Walmart recently rejected 1.6 million workers' attempt to bring a class action case – making it a whole lot harder for Americans to band together to hold corporations accountable. Go it alone and the deck is stacked, thanks to decades of effort by corporations and the politicians they pay for.
They don't pay fair wages; they don't pay their fare share of taxes. They evade liability. What gives? Says Saladoff: "When corporations harm, there should be some way to hold them accountable."