[Congressional Record Volume 154, Number 20 (Thursday, February 7, 2008)]
[Extensions of Remarks]
[Page E147]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    INTRODUCTION OF THE AUTOMOBILE ARBITRATION FAIRNESS ACT OF 2008

                                 ______
                                 

                         HON. LINDA T. SANCHEZ

                             of california

                    in the house of representatives

                       Thursday, February 7, 2008

  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I rise today to 
introduce the Automobile Arbitration Fairness Act of 2008. This 
legislation will extend to certain consumers what Congress granted to 
automobile dealers in 2002: freedom from mandatory binding arbitration 
agreements.
  Automobile manufacturers imposed mandatory binding arbitration 
clauses in their dealer contracts to forego forums otherwise available 
under state law. Unfortunately, states could not effectively address 
the increasing imposed use of mandatory arbitration clauses because the 
Federal Arbitration Act preempts such state laws. As a result, auto 
dealers had no legal recourse and were bound to using arbitration. 
Automobile dealerships voiced their plight to Congress, which in 2002 
passed the 21st Century Department of Justice Appropriations 
Authorization Act. This legislation included language to allow 
arbitration only if both parties to a motor vehicle franchise contract 
consented in writing to arbitration and if the consent was done after a 
controversy arose out of that contract.
  Although automobile dealerships now have the option not to enter into 
mandatory binding arbitration agreements, many dealers require such 
binding agreements in their sales or lease contracts with automobile 
purchasers and lessees. This legislation would connect the chain from 
manufacturers to dealers and from dealers to consumers, by requiring 
the consent of both parties to enter into contracts with binding 
arbitration clauses in automobile sales and lease contracts.
  I urge my colleagues to join as cosponsors of this legislation.

                          ____________________