The United States Supreme Court has announced that it will not hear the NJCJI-supported appeal of U.S. Legal Services Group, L.P. v. Patricia Atalese. The Court’s decision means the New Jersey Supreme Court’s anti-arbitration ruling in Atalese stands. It also means that the arbitration case pending before the New Jersey Supreme Court is more important than ever.
The Supreme Court’s decision not to take up the Atalese case means the uncertainty over the enforceability of arbitration clauses in New Jersey state courts will continue. Since Atalese was decided late last year, a number of New Jersey state courts have refused to enforce clear and unambiguous arbitration agreements because they failed to include a special warning regarding the waiver of rights associated with litigation in court. The U.S. Supreme Court’s decision not to take up this case unfortunately means many more previously uncontroversial arbitration agreements are likely to be thrown out.
Sanford Brown Looms Large
In January, the New Jersey Supreme Court agreed to hear the case Morgan v. Sanford Brown Inst. on the question of whether parties to a contract can be compelled to arbitrate New Jersey Consumer Fraud Act claims.
The hostility toward arbitration shown by the New Jersey Supreme Court in Atalese, suggests that the court could view the Sanford Brown case as an opportunity to expand the Atalese theory in continued violation of the Federal Arbitration Act.
New Jersey Civil Justice Institute and the United States Chamber of Commerce have filed a joint amicus curiae brief to the New Jersey Supreme Court urging the court to reverse its course on arbitration, by upholding the arbitration agreement at issue, and affirming that arbitration is an effective, and even favored, means of dispute resolution.
Click here to learn more about NJCJI’s appellate work. If you have any questions or comments about pending case, please email NJCJI’s Chief Counsel, Alida Kass.