Pollice Verson, a painting by Jean-Leon Gerome depicting one gladiator slaying another. Public domain.
By Luke Herrine, Staff Editor
The decision in American Express Co. v. Italian Colors Restaurant, announced on June 20, was quickly lost in the anticipatory hubbub around same-sex marriage and voting rights. Admittedly, it would not have gotten much media attention even if it had been announced on a slow news day; the issues of contract arbitration and the vindication of rights through class action proceedings don’t generate many page views.
Yet the decision in Italian Colors, written by Justice Scalia on behalf of a five-justice majority, deserves the attention of the progressive legal community and, indeed, all citizens. It is the latest installment in a long saga of cases that has allowed corporations to insulate themselves from suit through the strategic utilization of fine print.
The specific sort of fine print at issue in Italian Colors was an arbitration clause. These clauses require any suit brought against the party that writes them to be removed from court and diverted to proceedings presided over by a private judge from an organization such as the American Arbitration Association. In 1925, Congress passed the Federal Arbitration Act after extensive corporate lobbying to counteract the distrust that many courts had for such clauses.  This was in an era before the proliferation of consumer contracts, before strong labor and employment regulation, and before the modernization of civil procedure. Passed in such a context, the FAA was meant mainly to reduce the costs of dispute resolution for businesses that sued each other.
This changed in 1984 when the Court handed down Southland Corp. v. Keating.  In Southland, the Court ruled that the FAA was “a national policy favoring arbitration,” putting into effect unsubstantiated dictum from a case it had decided a year before. Southland was the first case to rule that the FAA preempted a state policy against certain types of arbitration. It was also the first case to hint, contrary to then-established jurisprudence, that violations of rights created by statutes were just as arbitrable as arguments about the contract. It was the first case to uphold an arbitration provision in a contract of adhesion (a contract in which a consumer has no bargaining power).
Although there were many chances to turn back, Southland turned out to be the first step of a unidirectional trail towards the pro-arbitration stance of the contemporary Court. Over the past thirty years, the Supreme Court has declared that arbitration provisions must be enforced regardless of whether the claim to be argued is an antitrust claim, an employment discrimination claim, a wrongful death claim, or even a claim that the contract itself is invalid. Arbitration clauses must be enforced whether the claim is in state or federal court and whether or not the claimant had any reason to suspect that she was agreeing to such a broadly exculpatory provision. And with Italian Colors the court has finally declared that it doesn’t matter if arbitration is even an effective way of resolving the dispute as long as the parties have “chosen” to resolve their dispute that way.
Justice Scalia’s opinion—building on his prior ruling in AT&T Mobility LLC v. Concepcion—declared that, even if the suit would be prohibitively expensive to litigate without the benefit of class action, if the contract provides for one-to-one arbitration then one-to-one arbitration it shall be. Plaintiffs in Italian Colors were a group of merchants that used American Express’s charge card machines. They were suing American Express for taking advantage of a monopoly position to charge exorbitant fees, in violation of Sherman Antitrust Act § 1. The cost of an expert economic analysis required in any modern antitrust case would have run upwards of $1 million, while “maximum recovery for an individual plaintiff would be $12,850, or $38,549 when trebled.” Although the Second Circuit ruled that class arbitration would be appropriate and the class waiver was unenforceable, the Supreme Court was not swayed.
The Court rationalizes its expansive pro-arbitration position in this case and those that preceded it through a trio of flimsy fictions. First, it repeatedly relies on the purported (and aforementioned) “liberal policy favoring arbitration” despite the fact that scholars and multiple subsequent Justices have rejected this interpretation of legislative intent. Second, it recites the platitudes of “freedom of contract” even when faced with situations in which one party obviously had no say whatsoever in the contract’s terms. Third, it argues that arbitration agreements reduce costs for businesses, which then pass the savings on to the consumer or employee. Setting aside the fact that this is an unsubstantiated empirical claim, it assumes a falsity: that consumers are actively choosing between lower price and the ability to sue if injured.
As the Court’s willingness to enforce exculpatory provisions through flights of fancy has increased, the role of these provisions has proliferated and metamorphosed. The FAA has become an instrument for reducing or eliminating the liability of big corporations, yet it has nearly ceased to be a means for businesses to work out disputes amongst themselves. In a 2007 survey of the telecommunications and financial services industries, a study found arbitration clauses in over 90% of employment contracts and in over 75% of consumer contracts, but in only 10% of contracts negotiated between businesses.
If there is to be any hope of escape, it will not be through the Court. Enough precedent now exists proclaiming the comprehensive power of the FAA that legislative intervention is needed. A bill called the Arbitration Fairness Act has already been introduced several times over the past few years, but has gotten nowhere. As Professor Amalia Kessler of Stanford Law explained, this proposed bill “is no panacea, but it’s a start.” Those of us who care about the judicial vindication of rights and about checking the power of corporations should get behind it as a first step out of the rabbit hole.
 133 S. Ct. 2304 (2013).
 Southland, 465 U.S at 10.
 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983).
 See Wilko v. Swan, 346 U.S. 427, 435 (1953).
 The statute involved in this case was the California Franchise Investment Law. The Court was not ruling on whether the rights created by the statute could be resolved in arbitration (the question was whether the fact that the statute seemed to preclude arbitration was preempted by the FAA); nevertheless its ruling suggested that the preference for arbitration stated in the FAA was more important than the potential for the arbitrator to not properly vindicate statutory rights (which was the Court’s concern in Wilko). Southland, 465 U.S. at 16.
 Unless the statute is a federal statute creating the cause of action that explicitly precludes arbitration, see CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012), and almost no statutes do. After all, Congress didn’t know it had to put this exception into statutes until the Supreme Court told it so.
 See, e.g., Italian Colors, 133 S. Ct. 2304 (2013); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985).
 E.g. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991).
 E.g. Marmet Health Care Ctr., Inc. v. Brown, 132 S.Ct. 1201 (2012).
 E.g. Buckeye Check Cashing v. Cardegna, 546 U.S. 440 (2006).
 Cf. Southland v. Keating, 465 U.S. 1 (1984); Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265 (1995).
 Most people don’t. Even Richard Posner has admitted to not reading most contracts of adhesion he enters into, and he is on notice (if anybody is) that such contracts might contain arbitration. David Lat, Do Lawyers Actually Read Boilerplate Contracts? Above the Law (June 22, 2010) http://abovethelaw.com/2010/06/do-lawyers-actaully-read-boilerplate-contracts-judge-richard-posner-doesnt-do-you/. The preclusion of unconscionability claims was the upshot of AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), which built on a string of cases represented most recently by Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (2010).
 131 S. Ct. 1740 (2011) (ruling that a California rule compelling class arbitration was preempted by the FAA).
 Italian Colors, supra note 1 at 423.
 In re Am. Express Merchs.’ Litig., 554 F.3d 300 (2d Cir. 2009).
 E.g. Christopher Drahozal, In Defense of Southland: Reexamining the Legislative History of the Federal Arbitration Act, 78 Notre Dame L. Rev. 101, 103 (2002) (“the majority opinion in Southland, written by Chief Justice Burger, is widely held to be an illegitimate exercise in judicial lawmaking, flatly inconsistent with congressional intent in enacting the FAA.”); Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 284 (1995) (Scalia, J., dissenting (“Southland clearly misconstrued the Federal Arbitration Act.”). But note that scholarly opinion is not unanimous: Drahozal himself rejects this majority and the majority of Justices in Allied-Bruce upheld Southland (although not without reluctance). See also Hal Neth, The Federal Arbitration Act and How it Grew, 46-47 (2011) (Master’s thesis, University of Oregon).
 Margaret Jane Radin, in Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law (2013), calls this the “gerrymandering of the word ‘agreement’ . . . In this process, consent is degraded to assent, then to fictional or constructive or hypothetical assent, and then further to mere notice . . . until finally we are left with only a fictional or constructive notice of terms.” Id. at 30. The traditional law and economics response to this charge is that consumers can still choose another company’s contract. But this is at best partially true in a world where well over three-quarters of the contracts on offer contain arbitration agreements. See infra note 22 and accompanying text.
 Professor Stephen Ware of the University of Kansas School of Law argues that the lack of empirical evidence should, on balance, lead one to believe that savings are passed on to the consumer, since one should default to the predictions of economic theory when faced with a lack of evidence. Stephen J. Ware, The Case for Enforcing Adhesive Arbitration Agreements—with Particular Consideration of Class Actions and Arbitration Fees, 5 J. Am. Arb. L. 251, 256 (2006), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=791807 (“[I]t is inconsistent with basic economics to question the existence of the price reduction.”). This is the sort of reasoning only permissible in law and economics circles.
 Theodore Eisenberg, Geoffrey P. Miller, and Emily Sherwin, Arbitration’s Summer Soldiers: An Empirical Study of Arbitration Clauses in Consumer and Nonconsumer Contracts, 41 U. Mich. J. L. Reform, 871, 883 (2008). Given that, since 2007, Rent-a-Center, Concepcion, and Italian Colors were decided, it seems likely that these results likely understate the prevalence of arbitration clauses in the contemporary world.
 Myriam Gilles and Gary B. Friedman argue that Attorneys General should fill the void that will inevitably be left by the ability of corporations to escape class litigation or arbitration. After Class: Aggregate Litigation in the Wake of AT&T Mobility v. Concepcion, 79 U. Chi. L. Rev. 623 (2012). I set aside this possibility as outside the scope of this short blog post.
 One reason the AFA is no panacea is that arbitration is not the only sort of clause that businesses sneak into contracts to get out of liability. These other clauses are beyond the scope of this article, but Radin, supra note 20, provides a useful overview of the most egregious.