Legislation Would Restrict Arbitration Clauses In Cell Phone Contracts and Other Consumer Agreements

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Senator Patrick Leahy (D-VT) has introduced The Restoring Statutory Rights Act, which is aimed at limiting the effectiveness of forced arbitration clauses in contracts. In addition to often barring class action lawsuits, arbitration clauses force consumers to resolve disputes through private arbitration, and are commonly used in many types of consumer agreements, such as those used for credit cards, cellphone service, cable television service, and Internet access service. As explained in Senator Leahy’s proposed legislation, courts have allowed arbitration clauses to preempt consumers’ rights and remedies established under substantive state and Federal law. The Restoring Statutory Rights Act, if passed, would address this by enabling consumers to seek remedies in state and Federal court, irrespective of arbitration clauses.

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