Restoring Statutory Rights and Interests of the States Act of 2019

II 116TH CONGRESS 1ST SESSION S. 635 To restore statutory rights to the people of the United States from forced arbitration. IN THE SENATE OF THE UNITED STATES FEBRUARY 28, 2019 Mr. LEAHY (for himself, Mr. BLUMENTHAL, Mr. DURBIN, Mr. WHITEHOUSE, Mr. MARKEY, Ms. HIRONO, and Mr. COONS) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To restore statutory rights to the people of the United States from forced arbitration. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Restoring Statutory 4 Rights and Interests of the States Act of 2019’’. 5 SEC. 2. FINDINGS AND INTENT. 6 (a) FINDINGS.—Congress finds the following: 7 (1) Chapter 1 of title 9, United States Code 8 (commonly known as the ‘‘Federal Arbitration 9 Act’’), represented an exercise of legislative power 10 VerDate Sep 11 2014 00:36 Mar 09, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S635.IS S635 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 635 IS that required courts to recognize private voluntary 1 agreements to arbitrate commercial disputes at a 2 time when the courts were refusing to do so on 3 grounds that arbitration represented a usurpation of 4 the authority of the courts to resolve legal disputes. 5 (2) The Federal Arbitration Act did not, and 6 should not have been interpreted to, supplant or nul- 7 lify the legislatively created rights and remedies that 8 Congress, exercising its power under article I of the 9 Constitution of the United States, has granted to 10 the people of the United States for resolving dis- 11 putes in State and Federal courts. 12 (3) Recent court decisions, including AT&T Mo- 13 bility LLC v. Concepcion, 563 U.S. 333 (2011) and 14 American Express Co. v. Italian Colors Restaurant, 15 133 S. Ct. 2304 (2013), have interpreted the Fed- 16 eral Arbitration Act to broadly preempt rights and 17 remedies established under substantive State and 18 Federal law. As a result, these decisions have en- 19 abled business entities to avoid or nullify legal duties 20 created by congressional enactment, resulting in mil- 21 lions of people in the United States being unable to 22 vindicate their rights in State and Federal courts. 23 (4) States have a compelling interest in enact- 24 ing rights and remedies to protect the welfare of 25 VerDate Sep 11 2014 00:36 Mar 09, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S635.IS S635 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 635 IS their citizens, and the Federal Arbitration Act 1 should not be, and should not have been, interpreted 2 to preempt State legislation that enacted rights and 3 remedies to protect the welfare of their citizens. 4 (b) INTENT OF CONGRESS.—In enacting this Act, it 5 is the intent of Congress— 6 (1) to restate and reinstitute the primacy of 7 congressional and State legislative bodies as the cre- 8 ators of the rights and remedies available to all the 9 people of the United States; 10 (2) to clarify that congressionally established 11 rights and remedies may not be waived prior to the 12 institution of a dispute by the party intended to be 13 protected by such statute; and 14 (3) to reinstate and reaffirm existing rights and 15 remedies of the people of the United States enacted 16 since the enactment of the Federal Arbitration Act 17 regarding access to the courts that have, or may 18 have been, abrogated or diminished. 19 SEC. 3. ARBITRATION OF FEDERAL STATUTORY CAUSES OF 20 ACTION. 21 (a) ADJUDICATION OF FEDERAL STATUTORY RIGHTS 22 OF ACTION.—Section 2 of title 9, United States Code, is 23 amended— 24 VerDate Sep 11 2014 00:36 Mar 09, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S635.IS S635 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 635 IS (1) by striking ‘‘A written’’ and inserting ‘‘(a) 1 IN GENERAL.—Except as provided in subsection (b), 2 a written’’; and 3 (2) by adding at the end the following: 4 ‘‘(b) EXCEPTION.—Subsection (a) shall not apply to 5 a written provision that requires arbitration of a claim for 6 damages or injunctive relief brought by an individual or 7 small business concern (as defined in section 3 of the 8 Small Business Act (15 U.S.C. 632)), in either an indi- 9 vidual or representative capacity, arising from the alleged 10 violation of a Federal or State statute, the Constitution 11 of the United States, or a constitution of a State, unless 12 the written agreement to arbitrate is entered into by both 13 parties after the claim has arisen and pertains solely to 14 an existing claim. 15 ‘‘(c) INTERACTION WITH STATE LAW.—In sub- 16 section (a), the term ‘grounds as exist at law or in equity 17 for the revocation of a contract’ includes a Federal or 18 State statute, or the finding of a Federal or State court, 19 that prohibits the agreement to arbitrate on grounds that 20 the agreement is unconscionable, invalid because there was 21 no meeting of the minds, or otherwise unenforceable as 22 a matter of contract law or public policy. 23 ‘‘(d) VALIDITY AND ENFORCEABILITY.—A deter- 24 mination as to whether this chapter applies to an agree- 25 VerDate Sep 11 2014 00:36 Mar 09, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S635.IS S635 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 635 IS ment to arbitrate shall be made by a court, rather than 1 an arbitrator, irrespective of whether the party resisting 2 arbitration challenges the agreement to arbitrate specifi- 3 cally or in conjunction with other terms of the contract 4 containing such agreement.’’. 5 SEC. 4. VACATING AN AWARD MADE IN VIOLATION OF SEC- 6 TION 2 OF TITLE 9, UNITED STATES CODE. 7 Section 10(a) of title 9, United States Code, is 8 amended— 9 (1) in paragraph (3), by striking ‘‘or’’ at the 10 end; 11 (2) in paragraph (4), by striking the period at 12 the end and inserting ‘‘; or’’; and 13 (3) by adding at the end the following: 14 ‘‘(5) where the arbitration took place in viola- 15 tion of section 2.’’. 16 SEC. 5. APPLICABILITY. 17 This Act, and the amendments made by this Act, 18 shall apply with respect to any dispute or claim that arises 19 on or after the date of enactment of this Act. 20 Æ VerDate Sep 11 2014 00:36 Mar 09, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S635.IS S635 pamtmann on DSKBFK8HB2PROD with BILLS