Forget that day in court

Thanks to tort reform, closed-door arbitration instead of courtroom hearings are becoming more common.

By Peggy Garrity

March 3, 2008

Events in a federal district court in Texas last month should have provoked outrage across the country -- legal, judicial and moral outrage. A young American woman already denied the right to criminal justice in Iraq was insulted for a second time when a judge denied her the right to sue for civil relief in a U.S. court.

What was the reason? There was a binding arbitration clause in her employment contract. The judge said: "Sadly, sexual harassment, up to and including sexual assault, is a reality in today's workplace." He then sent the case to binding arbitration as requested by Halliburton and its former subsidiary, KBR, snuffing out the civil case of their employee, a mother of five who had filed a lawsuit alleging sexual harassment and assault by co-workers while on the job in Iraq.

A second woman is likely to face the same fate in the same court, in a case alleging that she was drugged and brutally gang-raped by co-workers in Iraq and then held incommunicado, without food or water, in a shipping container by the same employer. In an unbelievable statement to the Equal Employment Opportunity Commission, KBR said that after a medical examination, the woman was "taken to a secure unlisted living container where she could rest." It is hard to imagine any greater trauma to an already traumatized and injured rape victim than terrifying and forcible isolation immediately after the violent event. Adding insult to injury, the rape kit used by a military doctor in examining the victim was reportedly handed over to Halliburton/KBR, and doctor's notes and photos of her bruises are missing.

There was no criminal prosecution of the alleged perpetrators because they worked for a defense contractor, which is exempt from criminal sanctions under an order enacted by the Coalition Provisional Authority in Iraq during L. Paul Bremer III's tenure as its administrator.

That decision was outrageous enough. But now the Texas court ruling appears to say that because of the arbitration clause, these women have no standing in a U.S. civil court either.

This is a preview of the demise of the jury system intended by the innocuous-sounding tort reform movement. "Tort reform" is a deliberately deceptive term coined in the 1980s by tobacco, pharmaceutical, insurance and gun lobbyists and lawyers who set about to transform our civil justice landscape by eliminating corporate exposure to civil liabilities. After years of an all-out campaign, at the heart of which was relentless media propaganda, judicial selection and legislation, the courthouse doors are rapidly being closed to average citizens, who will be shunted off into a lucrative private legal system presided over by retired judges employed by alternative dispute-resolution providers.

Many Americans would be surprised to learn they are barred from pursuing a case in court because of boilerplate binding arbitration clauses buried in forms they signed with banks, real estate and escrow companies, auto dealerships, medical care providers (including hospitals) and many other people and entities that may have caused them harm. Yet that's often the case (and what happened to the two Halliburton employees would have been the same, even if they'd been in Wisconsin rather than Iraq).

Arbitration was marketed as "faster and cheaper." Well, it certainly is for these business interests. It is a different story for the rest of us.

In such arbitration proceedings, there is no public or media access, no rules of evidence or procedure, no court transcript, no jury and, most important, no appeal -- no matter what. Quite simply, there is no accountability in binding arbitration, in which the arbitrators and alternative dispute-resolution providers are paid by the corporate defendants -- who are also likely to guarantee repeat business.

Binding arbitration clauses were drafted and put into form contracts by lawyers for the corporations that stood to benefit from them the most. And, it could be argued, the real "judicial lottery" harped on by the tort reformers was the one implicitly offered to members of the judiciary, who are now cashing in.

Tort reform is a game of bait-and-switch in which ordinary citizens have been snookered by carefully orchestrated and relentless propaganda into seeing a phantom boogeyman in the much-reviled "trial lawyer" who brings "frivolous lawsuits" to "runaway juries" that render "out of control verdicts" in "judicial hellholes," making insurance rates and the costs of all goods and services go up.

Well, none of those expenses have gone down, have they? All the while, the real target was the justice system set up by our founders to protect the average citizen, and now it is in serious peril.

Peggy Garrity is a plaintiffs' civil rights lawyer in Santa Monica.