June 8, 2015

Supreme Court rejects New Jersey arbitration case

By Deborah J. La Fetra Senior Attorney

New Jersey courts, along with those of California and Massachusetts, continually exhibit hostility to the freedom of contract, when that freedom is expressed in a contract to arbitrate consumer or employment disputes. Today, the Supreme Court denied certiorari in U.S. Legal Services Group v. Atalese, a New Jersey Supreme Court decision requiring arbitration contracts to contain language advising consumers about the effects of agreeing to arbitrate. The state’s courts do not require other types of contracts to include legal advice, exhibiting precisely the type of hostility to arbitration that the Federal Arbitration Act was enacted to prevent. PLF filed an amicus brief supporting the cert petition. While today’s order denying cert is disappointing, the Supreme Court continues to receive a steady stream of cert petitions seeking protection under the FAA for contractual freedom—so many that it reasonably grants only a few. For example, as we noted just a few days ago, the Court accepted DIRECTV v. Imburgia this Term, a California-based arbitration case in which PLF also filed an amicus brief. A pro-freedom decision in DIRECTV would cabin state courts’ ability to make special demands of arbitration contracts beyond the state’s general contract law principles, thus undercutting the rationale of cases like Atalese, and rendering them mere footnotes in history.

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