Supreme Court: Just Because the Statute Tells You That You Have a Right to Sue, That Doesn’t Mean You Actually Have a Right to Sue

Observers of the U.S. Supreme Court’s arbitration jurisprudence over the past several years will not be shocked by this one.  Let’s face it: the Court loves it some arbitration.

The Court today held that the Credit Repair Organizations Act–which requires that credit repair organizations provide consumers with a statement that says “You have a right to sue a credit repair organization”–does not give consumers a right to sue a credit repair organization.  (Here’s the opinion.)  Instead, CROA merely gives consumers the right to a statement saying they have a right to sue–not the actual right to sue itself.  As such, the plaintiffs must arbitrate their claims.  Scalia sums it up thusly:

The disclosure provision is meant to describe the law to consumers in a manner that is concise and comprehensible to the layman—which necessarily means that it will be imprecise… We think most consumers would understand it this way, without regard to whether the suit in court has to be preceded by an arbitration proceeding.  Leaving that possibility out may be imprecise, but it is not misleading—and certainly not so misleading as to demand, in order to avoid that result, reading the statute to contain a guaranteed right it does not in fact contain… Because the CROA is silent on whether claims under the Act can proceed in an arbitrable forum, the FAA requires the arbitration agreement to be enforced according to its terms.

Ginsburg was having none of it:

The “right to sue,” the Court explains, merely connotes the vindication of legal rights, whether in court or before an arbitrator.  That reading may be comprehensible to one trained to “think like a lawyer.”  But Congress enacted the CROA with vulnerable consumers in mind—consumers likely to read the words “right to sue” to mean the right to litigate in court, not the obligation to submit disputes to binding arbitration… Today’s decision permits credit repair organizations to deny consumers, through fine print in a contract, an important right whose disclosure is decreed in the U. S. Code.

Thankfully, Miranda was not decided along similar lines.

"You have the right to be told you have the right to remain silent. Now start talkin'!"

Let us know your thoughts in the comments.

About Brian Jones

I represent clients in all aspects of business litigation, but focus my practice on complex litigation and arbitration matters concerning insurance and reinsurance, antitrust, class actions, securities, real estate disputes, and contract matters. I am the co-chair of the Bose McKinney & Evans Insurance Group. I was listed in the 2017 and 2016 "Best Lawyers in America" for Insurance Coverage and named a "Rising Star" in Insurance Coverage by Super Lawyers in Indiana in 2014. I was also named a "Rising Star" in Business Litigation by Super Lawyers in Indiana in 2013 and 2012, and a 2010 “Rising Star” in Business Litigation in Texas. I am a member of the State Bars of Indiana and Texas, the Defense Research Institute, a former member of the Pro Bono College of the State Bar of Texas, and I am licensed to practice before all state courts in Indiana and Texas, as well as all federal courts in Indiana, the Northern, Western, and Southern Districts of Texas, the Northern District of Illinois, and the United States Courts of Appeals for the Fifth, Seventh, and Eleventh Circuits. I received my bachelor’s degree, cum laude, in political science and my master’s degree in teaching from Trinity University, where I was elected to Phi Beta Kappa. I received my doctor of jurisprudence degree from the University of Texas School of Law, where I was the Director of Communications for the Legal Research Board and a member of the Phi Delta Phi Honor Society. Before attending law school, I taught high school geography, government and economics in San Antonio, Texas.
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