This post is aimed at drafters of arbitration clauses. Because if you don’t insert an administrator for your arbitration, and don’t anticipate that the administrator may just stop providing services, your arbitration clause is dead in the water. At least, that’s the holding of two new state court cases.
New Jersey
Third Circuit Goes On Formation Tour — Issues Arbitration Decisions Favoring Prisoners and Pistachio Buyers
By Liz Kramer on
Posted in Validity of Arbitration Agreement
In the past week, the Third Circuit has issued two important decisions on the formation of arbitration agreements. (Sing it Beyoncé! “Okay ladies, now let’s get in formation.”) In one, a class action was allowed to proceed in court because the defendant did not obtain explicit enough agreement to the arbitration, and in another an…
New Jersey Says Non-Payment Of Arbitration Fees is Breach of Agreement
By Liz Kramer on
The New Jersey Supreme Court refused to allow a respondent to benefit from its refusal to pay arbitration fees in Roach v. BM Motoring, LLC, 2017 WL 931430 (NJ March 9, 2017).
First, Ms. Jackson filed a demand for arbitration against a New Jersey car dealership with the AAA. The parties’ arbitration agreement required the…
Futility Trumps Waiver of Arbitration Rights in Third Circuit
By Liz Kramer on
Posted in Class Arbitration, Waiver of Right to Arbitrate
Echoing a holding already issued by four other circuits, the Third Circuit recently found that a defendant does not waive its right to arbitration by continuing to litigate in court, if the reason it failed to move to compel arbitration is that the motion would have been futile. Chassen v. Fidelity Nat’l Fin., Inc.,…
New Jersey Becomes Third Recent State Court to Refuse To Enforce Delegation Clause
By Liz Kramer on
Posted in Validity of Arbitration Agreement
In a decision that appears intentionally controversial, the Supreme Court of New Jersey yesterday refused to enforce the delegation clause in a for-profit college’s enrollment agreement in a 5-1 opinion. Morgan v. Sanford Brown Institute, 2016 WL 3248016 (N.J. June 14, 2016). Although the delegation clause had never been specifically challenged by the plaintiffs, as…
Arkansas and New Jersey Sidestep Concepcion Hurdle and Declare Consumer Arbitrations Invalid
By Liz Kramer on
Two state supreme courts found consumer arbitration agreements unenforceable in the past week: Arkansas and New Jersey. Arkansas grounded its decision on the lack of mutuality in the consumer arbitration agreement (similar to Missouri’s recent ruling). Alltel Corp. v. Rosenow, 2014 WL 4656609 (Ark. Sept. 18, 2014). New Jersey grounded its decision on…