Using litigation to resolve disputes is an expensive and time consuming process — taking years to move through the courts, often requiring expensive legal counsel, and consuming significant amounts of time for defendants and plaintiffs alike. Arbitration provides consumers with access to a fast, streamlined, cost-effective method of resolving disputes that provides them with real compensation for legitimate injuries.

In 1925, Congress passed the Federal Arbitration Act (FAA) to stop courts from discriminating against arbitration agreements. Time and again, the U.S. Supreme Court has defended the FAA’s “liberal federal policy favoring arbitration agreements” against efforts to undermine alternative dispute resolution. (EEOC v. Waffle House, Inc.) In fact, just this year, the Supreme Court once again affirmed the benefits of arbitration: “lower costs, greater efficiency and speed, and the ability to choose expert adjudicators.” (Stolt-Nielson v. AnimalFeeds International Corp.) It’s not just businesses that reap the benefits of arbitration — the Supreme Court also has recognized that, with the FAA, Congress “had the needs of consumers, as well as others, in mind.” (Allied-Bruce Terminix Cos. v. Dobson).

Despite Congress’s plan to help consumers by providing a fair, efficient alternative means to resolve disputes, some courts and politicians, particularly in California, have ignored the plain language of the FAA and have sought to replace the federal policy favoring contractual arbitration with a state-sponsored preference for class actions.

These issues are raised in a case the U.S. Supreme Court will soon hear. A couple who received two free cell phones as part of a bundled-service contract filed a class-action lawsuit claiming they were duped because they had to pay a few dollars in state sales tax on the phones (incidentally, the company collected the sales tax pursuant to California tax laws). The cell-phone contract the plaintiffs signed requires them to use a fast and fair arbitration process instead of litigation to address any grievances.

The federal appellate court (the United States Court of Appeals for the Ninth Circuit) refused to enforce the arbitration clause, notwithstanding the plain language of the FAA. The Ninth Circuit embraced California’s policy favoring class actions rather than the FAA’s policy favoring the enforcement of arbitration agreements as written, unless the agreements violate a generally applicable state contract-law principle — such as fraud or inherent and abject unfairness.

The Supreme Court should overturn that Ninth Circuit decision. Congress was correct to promote the use of arbitration as an appropriate and successful alternative method of resolving disputes, and the Supreme Court should stop lower courts and politicians from elevating their own policy judgment over that of Congress. The Supreme Court should clearly and emphatically end these efforts to take fairly structured arbitration off the table for consumers.

With arbitration off the table, consumers often have no expeditious process to resolve claims, particularly small claims. Unlike arbitration, which, if structured fairly, provides a win-win for consumers and businesses — prompt resolution of claims without the enormous expense and burdens of litigation — class actions all too frequently function primarily to benefit lawyers. Not only do class actions often require years to resolve, they also often provide no clear benefit to the plaintiffs they allegedly represent In most class actions, the vast majority of class members do not even bother to pay attention to the case, have no understanding of the claims, have no communication with the lawyers purporting to represent them, and ignore any settlement that might be reached. In short, while plaintiffs collect pennies on the dollar, the lawyers make a fortune in fees.

From a legal perspective, there are many reasons why the Ninth Circuit’s analysis should not stand. Most importantly, the FAA should be applied by the courts as it is written, as a strong federal preference for the enforcement of arbitration agreements as an alternative to more expensive and burdensome litigation. Although states have significant latitude in promoting state policy preferences, courts may not substitute such state preferences that conflict with the language of an applicable federal statute — here, the FAA.

Consumers who have legitimate grievances deserve access to the expedient and user-friendly system that Congress has already declared should be available as a contractual alternative to litigation. Although class actions may be very good for trial lawyers, well-structured arbitration is very good for consumers. If consumers decide that, notwithstanding the many benefits of arbitration, they prefer lawyer-driven class actions, they certainly may demand that businesses honor such a preference and competitive businesses will respond. But class action advocates should not be permitted to impose this contractual choice on consumers by eliminating arbitration.

— Robin Conrad is the executive vice president for the U.S. Chamber of Commerce National Chamber Litigation Center.