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Is Justice Served?

Hundreds of judges have deserted the bench to enrich themselves in a system of private arbitration. The arena is largely unregulated and tilted, many say, in favor of big business and against the little guy.

October 22, 2006|Eric Berkowitz | Eric Berkowitz is the legal editor for the Los Angeles Daily Journal. He has written for LA Weekly and the Associated Press.

After nine years of hearing family law cases in her Santa Monica courtroom, Jill Robbins was tired--tired of schlepping files home every night, tired of yapping litigants who didn't really understand the process, tired of not being appreciated, tired of earning the equivalent of a junior lawyer's pay.

"I wasn't enjoying myself," Robbins says, with considerable understatement.

About the same time, a number of retired judges were telling Robbins about the piles of money she could make by hiring herself out to wealthy couples looking to resolve their divorces quietly.

"They said, 'Oh my God, there's so much business out here; if you're thinking about it, this is the time,'" she recalls.

Not only did Robbins think about it, at least two attorneys remember her talking about it--openly from the bench. They say that, shortly before giving up her commissioner's robe in 1995, Robbins announced during a hearing that she had turned in her resignation and would be starting in private practice in about two months. Then, they add, Robbins asked the lawyers who were present to keep her in mind.

Apparently, many have. Robbins is now one of the city's top private family law judges, commanding $600 an hour. Her cases have included the Brad Pitt/Jennifer Aniston split and Charlie Sheen's breakup with Denise Richards.

Robbins denies soliciting business in her courtroom. "That would have been improper," she says. "I did not do that." But Robbins allows that word of her departure might have gotten out. People were calling to hire her, she acknowledges, even before she left government service.

It's no mystery why. The pay-for-justice phenomenon extends nationwide, generating hundreds of millions of dollars in business a year. (Nobody has an exact figure.) But it's most prevalent in California, where a largely unregulated private system now handles more commercial cases than do the courts, according to some in the industry.

In fact, Robbins is one of hundreds of judges who have abandoned the bench to enrich themselves by working in the private sector. Among them are four former California Supreme Court justices who settle disputes for arbitration companies that hawk them like merchandise. Stephen Reinhardt, who sits on the federal appellate court in Los Angeles, once compared such marketing to "the rivalry between Alka-Seltzer and Pepto-Bismol."

The effect of all this is threefold. First, it has meant that a large number of cases are being decided out of public view, leaving no record or legal precedent for others to follow. Second, it has left the courts--with its overload of cases and myriad other challenges--without some of its most experienced jurists. Meanwhile, many of the best have walled themselves off behind what is, in effect, a gated community.

Now, if you're rich, you not only can afford to send your kids to the best schools and obtain the best healthcare and employ the best lawyers, but you can hire the best judges too. Says California Supreme Court Chief Justice Ronald George: It's a "two-track system of justice--one for people who can decide which trial service they want and which judge they will pick" while "others stand at the end of the line."

"We're doing the luxury spa," adds former judge and arbitrator Richard Hodge, "rather than the public swimming pool."

Not that the less-well-heeled don't find their way into the private arbitration arena. Which brings up my third point: Large companies are using arbitration to diminish many hard-won consumer rights.

Through boilerplate clauses buried in take-it-or-leave-it contracts, those who sign up for medical care, credit cards and other essential services are being forced to go into arbitration if they have a beef, thereby relinquishing the protections of the courts and the law. A 2004 study by Stanford law professor Deborah Hensler and Rand Corp. researcher Linda Demaine found that more than 55% of consumer contracts have such clauses, leaving the public at the mercy of private judges who can rule with almost no accountability.

And take a guess: When private judges are deciding between a big company and you, which way do you think they tend to lean?

Until his retirement in 2004, Mitchell Shapiro was one of the city's leading franchising attorneys. I practiced law with him for six years in the 1990s. Long afterward, he worked at a large firm representing a franchise chain in an arbitration against an individual franchisee.

"You're not going to lose," Shapiro says one of his partners assured him. The firm sent the arbitrator so much business, the partner explained, "he has never decided against us." Sure enough, Shapiro says, "on a very close case he came down in our favor."

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