On Monday, March 8, 2021, the Assembly Consumer Affairs Committee heard testimony on A5240, a bill that seeks to invalidate clauses in consumer contracts that require disputes to be resolved in a venue, forum or jurisdiction other than New Jersey.

Despite the fact that this bill does not directly target arbitration, the Chair of the Committee and co-sponsor of the bill, Assemblyman Paul Moriarty, still used the hearing as an opportunity to attack what he called “forced arbitration”. Assemblyman Moriarty appeared to argue that arbitration is a defective method of dispute resolution, claiming that “normal” procedural safeguards and evidentiary standards are not available in such proceedings. Moreover, the bill’s supporters argued that out-of-state forum clauses are intended to create unreasonable hurdles for New Jersey consumers to assert their rights in consumer transactions.

NJCJI’s President, Anthony Anastasio, testified in opposition to the bill. Anthony’s testimony focused on the actual language of the bill, and he suggested revisions to clarify ambiguities and limit the scope of the bill to low-dollar consumer transactions. Anthony also suggested giving consumers the option to select New Jersey as the forum for dispute resolution but not require it in every consumer transaction.

While the bill was released from the Committee, both the sponsor and other members of the Committee appeared receptive to NJCJI’s concerns. Some members of the Committee indicated likely opposition to the bill’s continued progress in the full Assembly if amendments to address the business community’s concerns were not adopted.

NJCJI will continue to monitor this bill as it progresses through the Assembly.  If you have any questions or concerns, then please reach out to Anthony at aanastasio@civiljusticenj.org.

NJCJI’s written testimony can be found here:

Anthony’s oral testimony can be found here at 17:05: New Jersey State Legislature Media Player