Green Tree Financial Corp v. Randolph

In Green Tree Financial Corp v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) the Supreme Court considered the issue of arbitration costs. The purchaser of a mobile home brought claims against several financial institutions pursuant to the Truth in Lending Act and the Equal Opportunity Credit Act. Id. at 82-84, 121 S.Ct. 513. The Court rejected the contention that an arbitration agreement that is silent as to arbitration costs is unenforceable because of failure to provide sufficient protection from substantial costs. Id. at 89-92, 121 S.Ct. 513. Although acknowledging that high costs "could preclude a litigant ... from effectively vindicating her federal statutory rights in the arbitral forum," it found that the "`risk'" that the plaintiff would bear such prohibitive expenses was too speculative. Id. at 91, 121 S.Ct. 513. The Court added: Where a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs.... How detailed the showing of prohibitive expenses must be before the party seeking arbitration must come forward with contrary evidence is a matter we need not discuss. Id. at 92, 121 S.Ct. 513.