What is the difference between bring a lawsuit in a court of law and bringing an arbitration claim?

WRITING ASSIGNMENT – #2

INSTRUCTIONS:

Due Date: February 19, 2019

Length & Format: No more than 2 pages

Double Spaced /12 font ./ 1 in. spacing

Do NOT use outside sources; Canvas will flag any sources beyond what is listed below. This is NOT a research assignment.

Do not use extensive quotes. Paraphrase or keep any quotes to approximately one line. Points will be deducted for excessive quoting.

Pretend the Mallh case is binding Pennsylvania precedent.

In order to answer the following questions, please read the following, in the order presented.

SOURCES: 

1. Arbitration defined: Text, page 144: See Arbitration in “Alternative Dispute Resolution” and E-Contracts on page 206. See also

https://www.nolo.com/legal-encyclopedia/arbitration-pros-cons-29807.html

2: “Class action” defined: A lawsuit is one in which a group of people with the same or similar physical or economic injuries caused by the same defendant, sue the defendant in a single lawsuit. The lawsuit must be approved by a court.

3. Text: Mallh v. Showtime, page 209

4. NY Times Article on Italian Colors v. American Express (Article) and…

https://www.oyez.org/cases/2012/12-133

FACTS

Sunny Solaria purchases a standard cable TV service package from Vulture Conglomerate, a well-known provider of cable TV access, doing business in all 48 states in the continental United States.

Before having the cable system installed, Sunny was directed to a website which listed all Terms and Conditions of the contract for installation, type of services and cost. All terms were clearly set forth (although some were lengthy) and Sunny had ample time to read and understand the terms. Before agreeing to any term, Sunny had to click “I accept” and upon clicking “I accept” another pop-up would appear which stated “Are you sure you are accepting this term, if so click ‘yes’, if not, click “no?” ALL terms were subject to this double-click.

Many terms were negotiable but a few terms were not. One non-negotiable term stated in relevant part:

The parties agree that any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. The arbitration hearing shall take place at the nearest Arbitration Association to the buyer’s residence before a single arbitrator. Class actions are prohibited. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

After receiving a few bills, Sunny noticed an overcharge of $7.50 on each bill. After complaining three times over six months, he was told by two operators that it was a mistake and Sunny would be sent a refund and the charge removed; a third operator told Sunny there was no mistake. Nine months have now elapsed and the charge remains on Sunny’s bill and no refund has occurred. To make matters worse, the cable service malfunctioned a number of times, causing Sunny to go for days without service. Sunny has never received a credit for the service outages, despite language in his contract which provides for refunds of service outages of more than 24 hours. Vulture is aware of the extent of the outages.

Sunny has learned that hundreds of others have the same billing and service outage problems with Vulture and they wish to band together and to bring class action lawsuit in the Pennsylvania Courts of Common Pleas.

QUESTIONS:

1. What is the difference between bring a lawsuit in a court of law and bringing an arbitration claim?

2. Sunny claims that he did not realize what arbitration meant and that this lack of understanding is an excuse against bringing the claim in arbitration. Based on Mallh, will that defense succeed? Why or why not?

3. Can Vulture prohibit class action arbitrations based on the Italian Colors v. American Express. case?

4. What defense did Italian Colors bring against enforcement of the class action provision in its arbitration clause with American Express? Was it successful? Why or why not? 

5. Why did the dissenting Justices think the majority decided the Italian Colors case incorrectly?

Although you should completely answer all questions, most of the paper should be answering questions 2 – 4.

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