FAN Coalition Urges Amtrak to Remove its Forced Arbitration Clause

Beginning in 2019, the rail operator Amtrak amended the terms and conditions for its passenger rail transportation services to include an arbitration provision that forces individuals into a private justice system that has no judge or jury, has limited right to appeal and is not bound by precedent. Amtrak’s arbitration provision states that it is “intended to be as broad as legally possible” – applying not only to individuals who buy tickets, but to “family members, minor passengers, colleagues and companies” for whom tickets are bought.

In November, 32 groups and more than 4,700 citizens urged Amtrak to reverse court and remove the forced arbitration clauses from its ticket. The advocacy organizations sent a letter both to Amtrak’s CEO and leading congressional appropriators and transportation committee chairs in both chambers of Congress. The groups argued that a railroad that receives $2 billion a year in taxpayer funding should not be allowed to shut the courthouse doors on customers who are discriminated against or injured, and called for the removal of forced arbitration clauses from Amtrak’s ticketing. Amtrak did not respond.

This month, Public Citizen sued Amtrak. The lawsuit alleges that Amtrak’s forced arbitration clause violates the Constitution in three ways. First, it forces passengers to either agree to give up their First Amendment right to go to court or find a different mode of transportation. Second, it forces passengers to take claims against a government entity into a private arbitration system that lacks the constitutional protections of a federal court. And third, it threatens the institutional integrity of the judicial branch by creating a wholly separate, private litigation process that lacks meaningful judicial oversight.

Amtrak, which began operating in 1971, is an institution of the federal government that must comply with the U.S. Constitution and acts only pursuant to authority delegated by Congress. Congress directed Amtrak to provide passenger rail services to America’s travelers; it did not authorize Amtrak to force travelers to waive their right to go to court if they are injured by Amtrak, the lawsuit says.

In 2016, Amtrak agreed to pay up to $265 million dollars to settle claims in the aftermath of a 2015 crash that killed eight and injured more than 200. If forced arbitration clauses had been in place at the time, none of the victims or their families would have been able to use the courts to hold Amtrak accountable.
Over the past decade, forced arbitration clauses have gone from being the exception to the rule in consumer and employment contracts, and now they’re almost impossible to avoid. Even by the most conservative estimates, the number of forced arbitration agreements in effect in the U.S. is at least 2.5 times the population, and the overwhelming majority of these agreements waive a person’s right to join others in a class action. Public Citizen recently compiled a wall of shame showing that more than 100 major companies use these clauses to deny justice to customers and workers.

Polling shows that 84% of voters want to stop corporations from forcing consumers and workers into arbitration. In June, the U.S. House of Representatives passed the Forced Arbitration Injustice Repeal (FAIR) Act (H.R. 1423) on a bipartisan basis by a vote of 225-186. The FAIR Act would prohibit companies like Amtrak from forcing their customers into arbitration. The FAN coalition strongly supports passage of the FAIR Act.