Will new member of Supreme Court Nominating Commission tip balance in Brownback’s favor?

Lenin V. Guerra, an Olathe attorney, was recently chosen by default to fill an open seat on the Kansas Supreme Court Nominating Commission, a group that has significant influence over the naming of Supreme Court justices.

That commission has been the subject of intense and heated debates in the Kansas Legislature in recent years. Critics say it unfairly limits a governor's ability to name justices and gives too much control to the very attorneys who practice in front of the court.

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Should Iowa Ditch Judicial Retention Elections?

"Judges and justices often make unpopular decisions, and these decisions may come back to haunt them come election season.

For Supreme Court justices in Iowa, that’s every eight years. And this November, Chief Justice Mark Cady, along with Justices Daryl Hecht and Brent Appel will be on the ballot.

Voters will not be asked to choose between the current justices and a challenger; rather with a retention election, voters are simply asked if each justice should keep his or her job.

But, many dislike Iowa’s judicial retention system.

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Kansas House to debate measure to change selection of Supreme Court justices

"The Kansas House will debate a bill Wednesday to change the way Kansas Supreme Court justices are selected.

HCR 5005 would amend the state’s Constitution so that Kansas Supreme Court justices would be appointed by the governor and confirmed by the Senate, similar to the way judges are selected at the federal level.

If the proposal obtains a two-thirds majority in both the Kansas House and Senate, it would be added to the November ballot statewide.

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Professor calls for centrist approach to arbitration against citizens

Tuesday, October 06, 2015

LAWRENCE — In the wake of the 2008 financial crisis and subsequent call for Wall Street reform, Congress enacted the Dodd-Frank Act, which created a new federal agency, the Consumer Financial Protection Bureau. Among the CFPB’s charges is to consider new rules on the often-controversial business practice of arbitration clauses in consumer contracts. While such consumer arbitration agreements divide judges, legislators and interest groups along predictable political lines (progressive vs. conservative), a University of Kansas law professor argues in a new article that a centrist approach makes more sense.

The article, forthcoming in the Harvard Journal on Legislation, is titled “The Politics of Arbitration Law and Centrist Proposals for Reform.” Its author, Professor Stephen Ware, has also been invited by the CFPB to participate in its field hearing Wednesday, Oct. 7, in Denver.

Ware’s forthcoming article proposes centrist reforms for law regarding “adhesion contracts,” the agreements that businesses present as “take it or leave it” to consumers.

“Although some contracts are the result of negotiated drafting by two parties represented by lawyers, most contracts that individuals have are adhesion contracts, drafted by businesses, and the individual simply decides whether or not to consent,” Ware said.

Many of these consumer adhesion contracts now have clauses providing that disputes will be resolved in arbitration rather than litigation.

These “adhesive arbitration clauses” in consumer contracts are at the center of a variety of hotly contested legal issues that are much more controversial than the issues raised by arbitration agreements between businesses.

The conservative approach is to stay with the status quo established by the 1925 Federal Arbitration Act and broad interpretations of that act by the Supreme Court. Some of these broad interpretations were made by the Supreme Court’s five justices appointed by Republican presidents over dissenting votes from the court’s four justices appointed by Democratic presidents. A particularly key 5-4 decision interpreted the Federal Arbitration Act to pre-empt states’ efforts to preserve consumer class actions from adhesive arbitration clauses prohibiting such lawsuits.

At the other end of the political spectrum are those who would simply ban all arbitration clauses in consumer contracts. This approach, advocated by many progressives, is contained in a bill supported by most congressional Democrats. While enactment of that bill is unlikely while Republicans control Congress, the CFPB already has the power to ban all arbitration clauses in an important category of consumer contracts — financial services, such as credit cards, checking accounts and payday loans. So, Ware says, “the action has shifted now from Congress to the CFPB.”

Ware’s article goes beyond proposing reforms to offer the CFPB drafting specifics — the language of a rule — with which the CFPB could enact into law the reforms he proposes.

In between the conservative status quo of broadly enforcing consumer arbitration clauses and the progressive approach of banning them entirely, Ware advocates an intermediate position. It rests on the principle that “adhesive arbitration agreements should be treated like other adhesion contracts,” Ware said. “This approach, which I’ve been developing incrementally in a series of articles for over 20 years, is for courts to enforce consumer arbitration clauses unless one of three exceptions applies.”

Exceptions Ware calls for:

  • When a party to the contract argues the contract containing the arbitration clause was induced by fraud, duress or other misconduct;
  • When the arbitration clause prohibits class actions under circumstances in which a contract lacking an arbitration clause but otherwise prohibiting class actions would be unenforceable;
  • When arbitration has already occurred and a party argues that the arbitrator made an error of law, the court should review the arbitrator’s ruling closely before enforcing it.

Ware’s arguments are timely as the CFPB has completed its study of consumer arbitration and is expected to issue new rules soon. Ware said he is glad the CFPB is interested enough in his views to invite him to participate in Wednesday’s field hearing. He hopes the current political climate is one in which the CFPB will be attracted to his centrist approach.

“The basic principle behind these positions — behind the centrist position — is that, with few and relatively uncontroversial exceptions, adhesive arbitration agreements should be as enforceable as other adhesion contracts, but not more so,” Ware wrote. “In other words, this article rejects conservative-supported anomalies that enforce adhesive arbitration agreements more broadly than other adhesion contracts, and proposes — contrary to progressives — that once these anomalies are fixed, adhesive arbitration agreements should be as generally enforceable as other adhesion contracts.”

Ware is an expert on arbitration law who has authored two books and dozens of journal articles on the topic. His scholarship has been cited by the Supreme Court and in at least 28 other federal and state cases. Ware has testified on arbitration before both houses of Congress and in court as an expert witness. 

Nursing homes' use of binding arbitration comes under fire

"Though some patients, their families, attorneys and patient advocacy groups have been battling binding arbitration agreements in nursing homes for years, the vast majority of nursing homes now use them, said Greg Crist, a spokesman for the American Health Care Association, an industry group. Industry groups and their lawyers argue the agreements are a useful tool for saving patients and facilities time and money—cash that is better spent on patient care.

Sue the Bank? You May Get Your Shot

"The Consumer Financial Protection Bureau is moving toward new rules giving borrowers more rights to sue banks and credit-card companies, the agency's latest attempt to shift the balance of power to consumers from financial institutions.

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The proposals under consideration would ban companies from including arbitration clauses that block class-action lawsuits in their consumer contracts for a broad range of financial products.

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Bankruptcy Automatic Stay: How It Works, Tips & More

"The automatic stay in bankruptcy is a temporary federal injunction that immediately stops most collection efforts by creditors, collection agencies and government entities against debtors and their property. It is one of the most beneficial features of bankruptcy, putting creditors on equal footing in regard to their claims and providing debtors temporary reprieve from aggressive collection activities as they seek to restore their financial standing.

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