Decoder host Nilay Patel sits down with Brendan Ballou, founder of the Public Integrity Project and author of the new book *When Companies Run the Courts*, to discuss the quiet, legally sanctioned nightmare that is forced arbitration. Ballou, a former DOJ antitrust prosecutor and author of the previous doom-and-gloom classic *Plunder*, explains how every terms of service agreement you've ever clicked “I accept” on probably contains a clause that strips you of your right to sue in court. Instead, you and the company get to hash it out in a private system where the judge is paid by the other side and you win about as often as a snowball in hell.
Ballou opens with a bonus corruption appetizer: the Public Integrity Project is suing Paramount over alleged quid pro quo with the Trump administration during the Warner Bros. acquisition. They've made a books-and-records demand on behalf of the Foundation for Freedom of the Press and Reporters Without Borders (both Paramount shareholders) to find out if the Ellison family promised to fire CNN anchors in exchange for regulatory approval. Because nothing says “free press” like trading newsrooms for merger clearance.
The main course, though, is arbitration. Ballou walks through the classic horror story: Jeffrey Piccolo's wife died of anaphylactic shock at a Disney World restaurant, and Disney argued he couldn't sue because he'd agreed to arbitration when he signed up for Disney+ years earlier. The law was on Disney's side - they only backed down after massive public backlash. Ballou also notes a woman allegedly raped by a coworker on a cruise ship was forced to arbitrate in the Philippines, with the outcome kept secret forever. Because nothing says justice like “what happens in arbitration stays in arbitration.”
How did we get here? Ballou blames the Supreme Court, starting with Warren Burger and then Antonin Scalia, who took a 1925 law meant for sophisticated merchants and applied it to consumers and employees signing take-it-or-leave-it contracts. Scalia's 2011 *Concepcion* decision essentially said even the most unfair arbitration agreements are enforceable. Ballou argues Scalia was a textualist only when it helped corporations - otherwise, he'd drop the textualism and rule for the big guys anyway.
The good news? There are hacks. California's Private Attorneys General Act (PAGA) lets employees represent the state in lawsuits, bypassing their own arbitration agreements. And mass arbitration - where thousands of people file individual claims at once - can bankrupt companies that promised to pay for all those filings. Ballou was part of a mass arbitration against Elon Musk's Twitter over unpaid severance, and while he can't share details (lawyer stuff), he hints it went well. But companies are fighting back, and even the major arbitration providers (AAA, JAMS) have incentives to keep the system tilted.
As for the next frontier: AI arbitrators. Ballou is horrified. He notes that arbitration decisions are often secret, making it impossible to build a consistent body of case law. Add a black-box AI to that, and you've got a system where similar cases get wildly different outcomes - which is the opposite of justice. He ties this to a broader feeling of arbitrariness and powerlessness in American life, from dynamic pricing to the sense that the rich can just buy their way out of trouble.
But Ballou isn't nihilistic. He argues that sticking with one specific issue - like forced arbitration - can yield real change. He's even posted model legislation on his website for people to send to their city council or state legislature. The fix won't come from reading your contracts more carefully (you can't negotiate with Verizon), but from collective action. Because apparently, democracy is the only hack that actually scales.