Can a claim be litigated after a arbitration?

Question

Consider this scenario:

1. Consumer signs a mandatory arbitration clause with a creditor that does not require Fair Credit Reporting Act (FCRA) claims to be arbitrated
2. Creditor reports inaccurate information about consumer to a credit reporting agency (CRA) in violation of FCRA
3. Consumer chooses to proceed with arbitration instead of litigation, on the basis of FCRA violation claim
4. Consumer loses in arbitration

Can the consumer then sue creditor in court on the basis of that claim? Or would that violate the 5th amendment (double jeopardy)?

(Note: this question is related to Can a consumer bring an FCRA claim twice concerning the same inaccuracy?)

Answer 1

The other answers stating that this cannot be done by @DaleM and @bdb484 reach the correct result.

But the reason that would usually be articulated by a court for this result, is that an arbitration of a dispute that is concluded has res judicata effect (a.k.a. claim preclusion effect), just as it would if the matter had been resolved in previous civil litigation, that precludes the matter from being relitigated. See, e.g., See RESTATEMENT (SECOND) OF JUDGMENTS § 84(1) (1982); Dial 800 v. Fesbinder, 12 Cal. Rptr. 3d 711, 724 (Cal. Ct. App. 2004) (“As a general matter, an arbitration award is the equivalent of a final judgment which renders all factual and legal matters in the award res judicata.”); Apparel Art Int’l, Inc. v. Amertex Enters., 48 F.3d 576, 585 (1st Cir. 1995) (“An arbitration award generally has res judicata effect as to all claims heard by the arbitrators.”); Simpson v. Westchester, 773 N.Y.S.2d 881, 882 (N.Y. App. Div. 2004) (noting that “the doctrine of res judicata applies to arbitration awards”).

This doctrine provides that when a matter between the same parties, or with an explicit aligned relationship with them known as "privity" finally resolve a dispute in arbitration or in litigation in which there is a full and fair opportunity to litigate the matter on the merits, any issue that is or could have been resolved in the prior litigation may not be the subject of future litigation between the parties. See, e.g. here.

In countries which have a common law legal system, this doctrine is a common law rule of civil procedure. In countries which have a civil law legal system, this doctrine is generally articulated in a statutory code of civil procedure.

Answer 2

No, but not because of the 5th amendment

The 5th amendment only applies to prosecution by the state, not to private civil claims so it’s irrelevant.

The reason that you can’t take this to court is that arbitration is final and binding. While there are grounds for appealing an arbitration these are much more limited than appealing a court decision.

One such ground is that there is no valid agreement to arbitrate, however, that has to be raised with the arbitrator at the outset and they will make a decision on it. That decision can be appealed within a very short time frame (28 days I think). However, as both parties have participated in the arbitration without raising this jurisdictional error it can’t be raised now.

The only other grounds are that the arbitrator did something truly egregious (like took bribes or decided the matter by flipping a coin [unless the parties agreed that was how it should be decided]) or that the decision is against public policy (e.g. it requires lawbreaking).

Answer 3

Because this is a civil case rather than a criminal case, the Double Jeopardy Clause has no real relevance. Just the same, the consumer is probably unable to raise the same claim in court, as the arbitration agreement almost certainly included language requiring all parties to waive their right to do so as a condition of entering into arbitration.