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Federal Deception Law: 2.9.1 The FTC Funeral Rule

Funeral and burial services are often high-priced packages purchased by bereaved relatives of the deceased under time pressures allowing little reflection. Religious, racial, or ethnic preferences may create virtual local monopolies of services.

Federal Deception Law: 2.9.2 State Claims

UDAP statutes typically prohibit misrepresenting the standard, quality, or composition of goods and thus will apply when a funeral supplier substitutes inferior products.612 The Oklahoma UDAP statute specifically prohibits failure to perform cemetery services that are promised in the contract.613

Federal Deception Law: 2.10 FTC Guides

The FTC has issued a number of industry guides. Trade regulation rules are distinguished from guides in that the TRRs often create disclosure requirements or other bright line requirements to prevent unfair and deceptive practices. Guides generally just list practices that are likely to be found unfair and deceptive. In addition, while violation of a trade regulation rule leads to special statutory remedies, this is not the case with violation of a guide.618

The FTC has stated the following concerning its guides:

Consumer Arbitration Agreements: 8.3.2 Is There a “Delegation Clause”?

An important distinction when determining who decides challenges to the enforceability of an arbitration requirement is whether there is a provision in the contract delegating such issues of enforceability to the arbitrator (called a “delegation clause”). If there is no delegation clause, then issues of enforceability are for the court.28

Consumer Arbitration Agreements: 9.3.1 Forum Rules

Arbitration procedures do not follow federal or state rules of court procedure, but the rules of the applicable arbitration forum. As one arbitration commentator states, “[u]nless the parties may agree that some set of court rules will govern the arbitral procedure (e.g., Federal Rules of Civil Procedure or a specific state’s court rules), no such rules apply . . .

Consumer Arbitration Agreements: 9.5 Starting the Arbitration Process

Some arbitrators prefer that the demand for arbitration be a compelling, short narrative (for example, one page in length) rather than a formalistic legal complaint. The plaintiff can also attach a legal-style complaint to the demand, but the one-page narrative may be more helpful to busy arbitrators who just want to acclimate themselves to a case quickly. Most arbitration forums do not have a formal pleading requirement.

Consumer Arbitration Agreements: 9.6 Importance of the Preliminary Hearing

Experienced arbitration practitioners know the critical importance of the preliminary hearing. Unlike a jury or bench trial in which different judges handle different aspects of a case, a preliminary hearing in an arbitration proceeding takes place before the ultimate fact finder and decision maker. From the very first hearing and through every conference, email, and telephone call with the arbitrator, the consumer attorney should act as if they were speaking to a jury.

Consumer Arbitration Agreements: 9.8.1 Number of Hearing Days; Bifurcation of Liability and Remedies; Payment Schedule

An arbitrator’s award can be vacated if the plaintiff was not permitted a fair hearing. Thus, many arbitrators are receptive to a consumer’s time estimate of the number of days needed for the arbitration hearing. It is better to ask for more days at the beginning because it is easier to later cancel dates than to add more dates to everyone’s busy calendar (arbitrators are well aware of this). It is not unusual to have a merits hearing that is three days or longer, if the circumstances warrant.154

Consumer Arbitration Agreements: 9.9.1 Standards for Submission of Evidence

Arbitrators vary in how closely they follow federal or state rules of evidence but, in general, arbitrators are not interested in strictly complying with rules of evidence. Arbitrators tend to allow into evidence everything that is pertinent, material, and allows for a fair hearing. An arbitrator’s ruling can be overturned if evidence is excluded, and it is rarely overturned because an arbitrator allows too much evidence in. Pertinent and material hearsay is typically allowed.

Consumer Arbitration Agreements: 10.2.4 When Arbitration Agreement Appears to Prohibit Class Arbitration

An arbitrator, faced with an agreement explicitly prohibiting class arbitration, will not interpret the contract as allowing class arbitration. If an arbitrator were to do so, a reviewing court could vacate such an award as exceeding the arbitrator’s powers.63 A consumer wishing to bring a class action faced with such a clause has little option but to attack the arbitration agreement as a whole as unenforceable.

Consumer Arbitration Agreements: 10.3.1 Importance of the Arbitration Forum

Most arbitration agreements designate one or more arbitration forums, such as the American Arbitation Association (AAA) or JAMS. Arbitration forums establish rules, receive requests for arbitration, compile an arbitration panel, present potential arbitrators to the parties, and otherwise administer the arbitration. Class arbitration will proceed according to the rules of the forum designated in the arbitration agreement.

Consumer Arbitration Agreements: 10.4 Limited Judicial Review of Arbitrator’s Certification Award

Typically, there will be three different awards in a class arbitration. The first, which was the subject of Stolt-Nielsen S.A. v. AnimalFeeds International Corp.,102 is an award construing whether the arbitration agreement allows class arbitration—issued either by an arbitrator or a court. The second is an award deciding whether to certify the class. Only the third award reaches the merits of the case.

Consumer Arbitration Agreements: 11.1 Overview

This chapter deals with judicial review and the effect of the arbitration award, assuming the agreement makes the arbitration award binding. Some forms of informal dispute resolution are not binding on the parties. For example, another NCLC treatise deals with informal dispute resolution procedures complying with the Federal Trade Commission’s Magnuson-Moss Warranty Act rules or state lemon laws.1 In those forms of dispute resolution, a dissatisfied consumer can typically bring a new action in court.

Consumer Arbitration Agreements: 11.2.1 The Proper Court

There are narrow grounds to establish federal court jurisdiction for an action to confirm, vacate, or modify an arbitration award. The action must present an independent basis for federal jurisdiction other than the Federal Arbitration Act (FAA). Even though the FAA specifies federal court procedures to be used to confirm, vacate or modify an award, those FAA provisions do not establish, on their own, federal court jurisdiction to pursue such a proceeding.11

Consumer Arbitration Agreements: 11.2.3.1 Short Period to Vacate or Modify an Award

In most cases, actions to vacate or modify an award must be brought immediately after an award is issued. If, instead, a dissatisfied party waits to defend the prevailing party’s attempt to confirm the award, the dissatisfied party may lose the ability to challenge the award.

The FAA, the UAA, and the revised UAA require a party to apply to vacate or modify an arbitration award within ninety days (three months in the case of the FAA) after delivery of a copy of the award to that party.49

Consumer Arbitration Agreements: 11.3 Grounds to Modify or Correct an Award

Federal and state law allow either party to ask a court to modify or correct an arbitration award, which means asking the court to change the size or nature of the award. The Uniform Arbitration Act (UAA) and revised UAA explicitly state that, if the court agrees to modify the award, the court shall then confirm the award as modified. If the court refuses to modify the award, then the court shall confirm the award as issued.125 In neither case does the matter go back to the arbitrator or require a separate confirmation proceeding.

Consumer Arbitration Agreements: 11.7.1 Introduction

Consumers can recover punitive damages in an arbitration proceeding unless the arbitration agreement or the arbitration service provider’s rules explicitly restrict such recovery. Such restrictions are not common, and if found would serve as a basis to challenge the enforceability of the arbitration agreement.328