The American Arbitration Association (the "AAA") has long had the following disclosure regarding its arbitration case data:
Any "prevailing party" information contained with this website/document, has been provided solely by the arbitrator(s) to an arbitration. The AAA has not reviewed, investigated, or evaluated the accuracy or completeness of the arbitrator's/arbitrators' determination of the "prevailing party" and makes no representations regarding the accuracy or completeness of this information.
[Emphasis Added]
While browsing the Level Playing Field database one day, we noticed a peculiar trend in the data of ACT, Inc. — the company that administers the ACT test for high school students, among other things.
ACT, Inc. requires any test taker that is challenging the disqualification of their test results to go through AAA arbitration:
"...the final and exclusive remedy available for you to appeal or otherwise challenge a decision by ACT to cancel your test score is binding arbitration."
See pages 3 and 4 of the ACT, Inc. terms and conditions here.
Test takers challenge disqualification dozens of times per year.
One would expect that ACT, Inc. could generally support its disqualification decisions and therefore would win most of its arbitrations. Moreover, the arbitrator's prevailing party determination should be straightforward: either the test is disqualified or it isn't. Thus the prevailing party should nearly always be known.
On August 23, 2017, upon review of the ACT, Inc. case data, we saw that, in 2011, when a prevailing party was defined, arbitrators decided ACT, Inc. was the prevailing party in 78 out of 84 cases (93% of the time). The consumer prevailed in the remaining 6 cases (7% of the time).
This was as expected. The interesting part was what happened in the subsequent years:
If the prevailing party data "has been provided solely by the arbitrator(s) to an arbitration," how did all of the arbitrators suddenly stop providing prevailing party data?
To be clear, it isn't one or two arbitrators deciding on ACT, Inc. cases. It's hundreds of different arbitrators: See here.
We tweeted about this peculiar finding in August and October 2017.
Since then, nearly every decision now shows a prevailing party.
Again, it is unlikely that any individual arbitrator read our tweet. (We have a huge follower count of 22). As such, it is fair to suspect that the AAA exerts far more control over the case data than it claims.
How many other cases have or should have known prevailing parties?
What was communicated by the AAA to these arbitrators? Anything?
Is it a coincidence that these obfuscated cases are lopsided in favor of the business?
Is the AAA gaming the data?
What is going on here? How reliable is this data?
Letter to California Attorney General Xavier Becerra
This and many other reasons (to be revealed in future blog posts and reports) are why we signed on to today's Consumers For Auto Reliability And Safety ("CARS") Foundation letter to California Attorney General Xavier Becerra.
The letter states:
Given the persistence of non-compliance with the law, and ever-increasing stakes for the public, with fundamental Constitutional and state rights of every Californian now hanging in the balance, we urge your office to take immediate steps to ensure compliance, taking action to investigate the practices of arbitration firms, and enforcing the existing protections that our lawmakers have repeatedly affirmed.
You can read the full letter here.
Arbitration firms such as the AAA are not disinterested third parties. They have a vested interest in the growth of forced consumer and employee arbitration. It is critical that the data provided is accurate and unadulterated. There must be consquences for data manipulation and incomplete disclosure.
We could not imagine a more clear cut case of data manipulation.
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