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If informal attempts at resolution fail, formal action begins when the plaintiff initiates a lawsuit by filing a complaintThe first formal document filed with the local clerk of courts when the plaintiff initiates a lawsuit claiming legal rights against another. with the local clerk of courts.1 This sets the pleadings stage in motion with both sides filing documents that set out the facts of the case, theories of liability, and any available defenses. At the same time, the plaintiff is typically required to arrange for service of the defendant with a summonsFormal notification to the defendant that she has been named in the lawsuit and informs her that an answer must be filed within a certain period of time. along with a copy of the plaintiff's complaint. The summons is formal notification to the defendant that she has been named in the lawsuit and informs her that an answer must be filed within a certain period of time. In some cases, the summons and complaint may be served by certified mail to the defendant. In other cases, a deputy sheriff or process server must deliver the documents in person. Statutes and court rules impose time limits on the litigants (the adverse parties involved in litigation) requiring pleadings to be initiated within a set time frame. Failing to adhere to the timelines may result in the loss of any legal rights or defenses. The complaint sets out the plaintiff's version of the facts of the case, the damages that have been suffered, and why the plaintiff believes that the defendant is legally responsible for those damages. Court procedures prescribe how the complaint should be served upon the defendant to ensure timely notice of the claims asserted by the plaintiff. Figure 4.1 sets out a sample complaint for the hypothical CRO v. SignCo. dispute.
Randolph financed the purchase of a mobile home through Green Tree Financial Corporation (Green Tree). The finance contract contained an arbitration clause whereby both parties waived any right to a trial and agreed to arbitrate any disputes, but the clause was silent on the location of the arbitration. Randolph, as lead plaintiff, filed a class action lawsuit against Green Tree in a federal district court alleging a violation of a federal statute that regulates consumer lending. Green Tree moved to have the matter dismissed based on the arbitration clause in the financing contract. Randolph sought to have the clause invalidated because it was too costly for Randolph to arbitrate and this effectively resulted in Randolph's rights under the federal consumer protection statutes being severely curtailed.

SYNOPSIS OF DECISION AND OPINION The U.S. Supreme Court ruled in favor of Green Tree, holding that the arbitration clause was valid. The Court reasoned that the Federal Arbitration Act's purpose was to favor the use of arbitration over litigation and that any party to an arbitration agreement that was resisting arbitration had the burden of proving that the claims at issue are not suitable for arbitration. The Court held that while high arbitration costs could potentially preclude a consumer from exercising her rights under federal statutes and would thus be invalid, Randolph had not proved that such prohibitively expensive costs would be incurred in her case.

WORDS OF THE COURT: Purpose of the FAA "In considering whether [Randolph's] argument to arbitrate is unenforceable, we are mindful of the FAA's purpose 'to reverse the longstanding judicial hostility to arbitration agreements [...] and to place arbitration agreements upon the same footing as other contracts.' [W]e have recognized that federal statutory claims can be appropriately resolved through arbitration, and we have enforced agreements to arbitrate that involve such claims."