Class Arbitration: Someone Please Forward a Copy of the Bazzle Decision to the Alabama Supreme Court

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Binding arbitration is often viewed by plaintiff's counsel as a death knell for injuries on unsophisticated consumers. Today, arbitration clauses grace the pages of most consumer contracts, whether it is purchasing a new car, contracting for home repairs, or purchasing a manufactured home. This essay discusses arbitration clauses and specifically the framework within clauses relating to class arbitration.

The use of arbitration as a method for settling disputes between nations dates back to antiquity. King Solomon was an arbitrator. (1) Phillip the Second, father of Alexander the Great, used arbitration to settle territorial disputes as far back as 377 B.C. (2) Arbitration is older than the common law system, and England used arbitration as a means of commercial dispute resolution as far back as 1224 A.D. (3) George Washington stated that he considered any arbitration decisions relating to his will, which contained an arbitration clause, as final and binding as any decision of the United States Supreme Court. (4)

The American Arbitration Association (AAA) is currently one of the most popular arbitration organizations in the world. (5) AAA employs over eight hundred people in thirty-five offices worldwide and represents over eight thousand arbitrators and mediators worldwide. As of 2002, AAA had administered over 230,000 cases and over two million cases in the past seventy-five years. (6) Proponents argue that arbitration could be used to ease the burden on the United States court system by decreasing the use of our courts as a tool to resolve property disputes, divorces, wills, and other similar civil courtroom situations. (7) Many economists predict that arbitration may become one of the fastest growing industries in the U.S. Due to the final and binding nature of arbitration, less than 1.5% of all arbitration cases in the U.S. ever go to court. (8)

With federal courts overwhelmed, beginning in the late 1990s, companies took advantage of a 1925 law permitting "alternative dispute resolution" between agreeing parties. (9) Unlike public courtrooms, arbitration proceedings are not disclosed to the public. (10) A 2002 California law required arbitration firms within the state to publish arbitration results on their website. (11) Public Citizen, a consumer advocacy group that sorted and analyzed the published data, determined that between January 2003 and March 2007 businesses won 94% of the 19,300 cases. (12) A single arbitrator made 1,292 rulings with only 21 in favor of the consumer. (13)

This Note will discuss a recent decision by the Alabama Supreme Court relating specifically to the court's current view of class arbitration. In 2008, the Alabama Supreme Court issued two writs of mandamus vacating a circuit judge's stay of arbitration proceedings. The opinion involves two petitions stemming from separate product liability actions filed in arbitration as contractually required by the sales agreement. For convenience, the court combined the two petitions into one opinion, and this Note does the same.


A. Recitation of the Undisputed Facts and Procedural Posture

In December 2006, Sabrina Johnson and others similarly situated, and Lamar Jenkins and others similarly situated filed separate complaints with the American Arbitration Association (AAA) pursuant to the contractual agreements between themselves and the manufacturers of mobile homes they purchased. (14) The complaints filed with AAA alleged violations relating to the improper design and manufacture of their mobile homes. (15)

The homeowners requested that AAA allow the arbitration of their claims on behalf of thousands of Alabamians who purchased defective mobile homes. (16) The AAA proceedings sought class arbitration in Montgomery County, Alabama. (17) The homeowners claimed that the walls of their homes were "literally rotting away as a result of a pervasive defect in their construction that [the mobile-home companies] have known about but failed to correct. …