Without objection, authorized to declare recess at any time pursuant to Committee Rule two and clause two chairman may postpone for the proceedings today an approving any matter or measure. Were adopting an amendment ordered. I want to thank everyone for coming. I know some people are here for the arbitration bill. Others for bills about preventing gun violence and still others about intellectual property. We are going to start with the arbitration bill, so maybe some time before we get to the gun violence prevention bills. That said, i want to recognize the gentleman from california whose bill we will be marking up today and i want to thank him for joining us. Mr. Chairman, could i just raise you mentioned the schedule for todays hearing. I had a question on the schedule moving forward. When will the committee get a chance to question mr. Horowitz on his report that was released two weeks ago . Im not sure which report youre referring to. Im referring to the scathing report on the former fbi director james comey. The answer is i dont know. Do you anticipate us having an opportunity to question i dont know. You dont know . I dont know. I havent we havent discussed that. You dont know that the Judiciary Committee is going to get an opportunity to question the Inspector General of the Justice Department who issued a scathing report on the former fbi director . We will do that at an appropriate time. Pursuant to notice im asking when that appropriate time is. Pursuant to notice, i now call up hr just one last point. No. Pursuant to notice i recognize the gentleman out of order and he asks this question. Thats it. But the Judiciary Committee is not going to schedule the Inspector General to hr1423, the forced orb trags and justice repeal act for purposes of markup and move that the Committee Report the bill favorably. The clerk will report the bill. Hr1423 to amend title nine of the United States code with respect to arbitration. Without objection, the bill is considered as read and open for amendment at any point. I will recognize myself for an opening statement. Hr1423, the forced Arbitration Injustice Repeal act or the f. A. I. R. Act would reduce for millions locked out of the court system and are forced to settle their disputes against companies in a private system of arbitration that often favors the company over the individual. Nearly a century ago, congress enacted the federal arbitration act to allow merchants to resolve run of the mill contract disputes in a system of private arbitration that would be legally enforceable. The system that congress envisioned was to be used voluntarily and only between merchants of equal bargaining power. However, over the past 40 years, the Supreme Court has issued a series of decisions that have expanded the use of arbitration far beyond congress original intent creating the unfair system we see today. Private arbitration has been transformed from companies to resolve disputes into a legal nightmare for millions of consumers, employees, and others who are forced into arbitration and unable to enforce certain fundamental rights in court. Many Companies Use forced a arbitration as a tool by bearing a forced arbitration clause deep in the fine print of a take it or leave it employment contract, companies can evade the court system where plaintiffs have far greater Legal Protections and hide behind the onesided process that is tilted in their favor. For example, arbitration generally limits discovery, does not adhere to the federal rules of civil procedure, can prohibit class actions which it almost always does, and deny the right of appeal. Worse yet, the arbitration allows the proceedings and often the results to stay secret. Thereby committing companies to avoid misconduct. For millions of consumers and employees, the precondition whether they know it or not of obtaining a basic service or product such as a bank account, a cell phone, a credit card, or even a job is that they must agree to resolve any disputes in private arbitration. We used to refer to contracts like these as contracts of adhesion in which one party with all the power dictates the terms to the other party in a take it or leave it contract. The next time you apply for a credit card, try crossing out the term in the fine print requiring you to arbitration and see if you still get the credit card. You will be denied without a moments hesitation. These are classic contracts of adhesion which were once thought to be disfavored under the law but which now seem to be Standard Operating Procedure in the corporate world. For individuals who have no right to agree to these contracts, their ability to enforce civil rights and antitrust laws are subject to the womhims of a private arbitrator. Often selected by the company 24e78ss. These private arbitrators are not required to provide plaintiffs any of the fundamental protections. And their further employment can depend on building a good reputation with the companies that hire them. And for many companies, arbitration has become a virtual get out of free jail card to circumvent the basic rights of consumers and workers. We have a bedrock principle in this country. And that is that all americans deserve their day in court. We make a mockery of this principle, however, when individuals can be stripped of this fundamental right and be forced into private arbitration proceedings without the safeguards our judicial system affords. That is where we find ourselves today. During an oversight hearing on arbitration in the antitrust commercial subcommittee, a panel of leading academic experts and practitioners and people affected by forced arbitration testified in support of ending this shameful practice. For example, deepak gupta testified that forced arbitration has eroded countless rights by congress by rendering them unenforceable. As he explained during the hearing, quote, the presence of forced arbitration clause means that americans will have no effective method of asserting their rights or getting justice under federal laws that could otherwise have been enforced in court. Consumer protection or antitrust laws, for example, or prohibitions on sex or race discrimination. If Congress Passes laws that cannot be enforced in the real world, what good are those laws . Closed quote. Hr1423, the f. A. I. R. Act, prohibits forced arbitration clauses in consumer, labor, antitrust, and civil rights disputes. Importantly, the legislation does not preclude parties from agreeing to arbitrator claim after the dispute arises which will ensure they are truly voluntary and transparent. I applaud the gentleman from georgia mr. Johnson for his leadership on this legislation which currently has 216 cosponsors. This measure is also supported by a Broad Coalition of more than 70 public interest, labor and advocacy. Including the communication workers of america, the Leadership Conference on civil rights, and the American Association of justice. In addition, 84 of americans across the political spectrum support ending forced arbitration in consumer disputes. According to recent polling data. It is up to congress to end this secretive and unfair practice. I urge my colleagues to support the f. A. I. R. Act and restore access to justice for millions of americans. I now recognize the Ranking Member of the Judiciary Committee, the gentleman from georgia mr. Collins for his opening statement. Thank you, mr. Chairman and welcome back to september. Arbitration gives consumers a faster and cheaper path to justice than the judicial system. The last time performed oversights of the system during the 111th congress. That is what the evidence showed earlier this term when they renewed this on antitrust commercial law and administrative law. In fact, the evidence in favor of preserving access to arbitration has only increased over time. Companies are continuing to improve arbitration agreements and following protocols to help assure due process is given against them. The market has resolved considered during the 110th and 111th congress. Even the Consumer Financial protection bureaus the 2015 arbitration study highlighted problems consumers would face if they had no access to arbitration but instead had to rely on flaws judicial class actions. The study emphasized the rise of predispute mandatory binding arbitration. It stems directly from the repeated abuses of class actions that have plagued the judicial system in recent decades. That is not to say the arbitration system is perfect. But the arbitration system is generally good and should be preserved. Unfortunately, that is not what the forced arbitration and repeal act would do. Rather than preserve and strengthen arbitration, it would wipe it out for enormous numbers. What that would do is not end in justice but it would promote injustice. In far too many cases where they are denied rights to arbitrate, rights their contract guarantees them to, it means they will be shut out of the judicial system entirely. If their claims are small enough, they can go to small claims court. That may be an option. But in 46 states and the district of columbia, small claims courts only take claims worth 10,000 or less. 30 of those jurisdictions limits are set at 5,000 or less. Case amounts worth not much higher than those ceilings will never be able to play courtroom lawyers enough to take care of their cases in ordinary trial courts. Maybe if the claimants could qualify in a class action lawsuit, they could take part in those. Millions will not be able to do so even those who join a class action lawsuit. Telling them theyve won a few dollars on a coupon. Meanwhile, the class action plaintiff trial lawyers will read multimillion dollar shares and fees from those they dole out at nearly pennies on the dollar. It would be better to call this the forced class action injustice guarantee act. Rather than wipe out arbitration we should be considering ways to make it better. While we do that, we should do everything we can to reform all the abuses out of the class action system. Chairman graham suggested that we do that at the senate Judiciary Committee hearing on arbitration earlier this year. He was exactly right. The worst result congress could deliver for the American People would be to wipe out their access to arbitration while leaving them no alternative but an unreformed system. That we could probably find some Common Ground and those are the grounds we go to. Will actually penalize many people in the process. Before i close, id like the letter from the National Association of home builders, institute for legal reform, National Retail federation, and the Consumer Banking association be handed into the record. Without objection. And with that, i yield back. Thank you, mr. Collins. Without objection, all other Opening Statements will be included in the record. I now recognize myself for purposes of offering an amendment in the nature of a substitute. The clerk will report the amendment. Amendment in the nature of a substitute to hr1423 offered by mr. Nadler of new york. Strike all after the enacting clause and insert the following. Considered as read and shall be considered as base text for purposes of amendment. I will recognize myself to explain the amendment. This amendment makes no substantive changes to the bill. It simply makes a technical correction to the bills short title. Therefore i urge all members to support it. I yield back the balance of my time and recognize mr. Collins for any comment os then amendment. I appreciate the amendment. The only question i go back on, again, is it worth throwing out everything to when we could fix what needs to be fixed seemingly to force folks out of the judicial system or actually into a where they cant get the help that they need . It is a balance that needs to be struck. This is going to be a good debate on that. Hopefully we can find that. With that i yield back. I thank the gentleman. What purpose is the gentleman from georgia recognition . Move to strike the last word. Gentleman is recognized. Thank you, mr. Chairman, for holding this important mark up. My bill would restore justice to the system by reinserted individuals rights to access the court system and to a jury trial. The f. A. I. R. Act would ensure men and women contracting with more powerful entities arent forced into private arbitration where the bigger party often has the advantage of choosing the arbitrator in an unappealable decision. Arbitration clauses have permeated American Life in recent decades. Theyve seeped into our cell phone contracts, our medical paper work, our employee handbooks. Their opaque language written by wellpaid corporate lawyers is often not understood by people who arent trained attorneys. These clauses are hidden in updated terms and conditions incorporated into midyear employee reviews and implicit in purchase contracts. And they all prevent us from having our day in court. Predispute forced arbitration is a private process that subverts the purpose of the seventh amendment by preventing contracting parties from using the American Court system when a dispute arises. It was created as an option for contracting business to business relations. Unfortunately the United StatesSupreme Court has allowed big business to impose forced arbitration clauses on consumers and others of unequal bargaining position in take it or leave it circumstances. In these cases where the more powerful Contracting Party can choose the judge, the jury, and the law applied, consumers and employees are put at a distinct disadvantage. Theres no requirement in an arbitration proceeding that testimony be under oath and under penalty of perjury and even worse the nature of the proceedings means that it does not create a Public Record and is not appealable. Repeated anticonsumer activity by Companies Never cease the light of day and individuals remain uncapable of Holding Entities accountable. This needs to change. When a loyal employee who happens to be a reservist or a National Guards person gets deployed and thereafter fired for getting deployed, they cant take their former employer to court and something is wrong with that. When a sexually harassed employee is forced into a private proceeding where her harasser gets to pick the judge, something is wrong with the american system. And the entire process is private. And when American Consumers need a Legal Education to understand what theyre signing, something is wrong with our judicial system. The deck has been stacked against Everyday Americans in favor of big business for far too long. And the pressure on the meek and powerless has only become greater as powerful corporate interests have realized that they can avoid accountability by incorporating arbitration clauses into every interaction they have with consumers. The f. A. I. R. Act would make the system work for everyone the way that our constitution intended. Finally, id like to take this moment to recognize the victims of forced arbitration who are in the audience today. Men and women whove been deprived of their rights because of arbitration clauses. Thank you for being here and for your bravery in telling your stories. It has resulted in us getting to this point where were marking up this bill. And it has 222 cosponsors as of today. Im very proud of that. And were here to ensure that what happened to you cannot happen to other people in similar situations and thus we are restoring justice to the american judicial system. With that i yield back. For our purposes the gentleman from florida seeks recognition. Strike last woord. Gentleman is recognized. Thank you. On this issue, im with the democrats. Matter of fact, i think im the only republican in the congress whos a cosponsor of this bill and i dont say that to bring discomfort to my colleagues in the majority. I say it to perhaps bring more comfort to my colleagues in the minority that this is an issue where we ought to have broader agreement. It is my belief that the number one threat to our liberty is big government. It is also my belief that the number two threat to our liberty is big business when business big is able to use the apparatus of government to wrap around its objectives. And in this case im convinced that big business overutilization of mandatory arbitration clauses impairs peoples access to something that is fundamentally american. That is to have a judge and jury make a decision regarding your dispute. As a matter of fact, i think this may be the most America First bill to have been brought forward in the house judiciary this congress. Because the ability to go before a jury of your peers, to go before a judge is so important to us as a country that it has been baked into our bill of rights. Im well aware of the Supreme Court precedent that has created space for mandatory arbitration, but that doesnt mean its consistent with our values. Why i think this is so unfair relates to the frequency with which the litigants will be before panels. Ive litigated before Arbitration Panels. Ive litigated before judges and juries. Heres the deal. Before a jury, for most of the juries, theyre unbiased. Right . Theyre going to see the plaintiff and the defendant one time and theyre going to make a decision on the facts. But when you go before an Arbitrati