A handful of states, including New Jersey, have been thumbing their nose at the United States Supreme Court’s rulings on arbitration. Last month, the Court once again said this needs to stop. Will the New Jersey Courts listen? Or are they waiting to be called out by the High Court?
Archis A. Parasharami of Mayer Brown, one of the nation’s leading experts on arbitration law, answered these questions and more during the latest NJCJI Policy Teleforum.
This is an edited recording of a call that took place on May 23, 2017. If you would like to participate in future calls as they happen, and receive CLE credit for them if you are an attorney, please contact NJCJI President Marcus Rayner.
Last week, the New Jersey State Bar Association held its annual convention in Atlantic City. Over 2,500 judges, lawyers, law clerks, and law students headed down the shore in search of CLEs and the scoop on emerging legal issues. In the following post, NJCJI’s Emily Kelchen reveals her insights on issues of interest to the civil justice community that were discussed at the convention. Continue reading
On Thursday, May 18, the Assembly Judiciary Committee is holding a hearing on A4173. The bill, which is being sponsored by Asw. Marlene Caride (D-Ridgefield), would prohibit employers and employees from agreeing by contract to arbitrate any employment disputes, all under the guise of codifying a couple of New Jersey Supreme Court rulings.
Although the bill does not mention arbitration by name, it forbids employers from even offering contracts that include many characteristics of arbitration agreements.
While this change may skate by under the dubious arbitration doctrine adopted by the New Jersey Supreme Court, it is in direct conflict with federal law and United States Supreme Court doctrine. It would clearly be barred by yesterday’s Supreme Court decision in Kindred Nursing Centers v. Clark.
Writing for a 7-1 majority, Justice Kagan noted that rules that hinge on a “primary characteristic” of an arbitration agreement, such as a trial by jury, fail to “put arbitration agreements on an equal plane with other contracts,” and therefore violate the Federal Arbitration Act, even if those rules are not limited to arbitration but also apply to “some other contracts implicating ‘fundamental’ constitutional rights.”
We are urging the Assembly Judiciary Committee to hold the bill.
Both houses of the New Jersey Legislature held their first voting session of 2017 on Monday, January 23, and each house took up a bill the New Jersey Civil Justice Institute is opposing. Continue reading
Why? Because numerous state laws explicitly encourage litigation when other means of dispute resolution would be quicker and more cost effective; poorly drafted statutes invite endless lawsuits over their interpretation; and antiquated policies limit the ability of our state to improve its legal climate.
Things have gotten so far off track, New Jersey has been named one of the nation’s worst “judicial hellholes.” At this point, there is nowhere to go but up, and the time is right to make changes, both legislatively and via judicial action.
A selection of the need-to-know civil justice news for the week of December 31-January 6.
Kathleen Hopkins | Asbury Park Press
An explosive event in Aberdeen in 2014 has spawned the top honor this year in a contest of dubious distinction.
Charles Toutant | New Jersey Law Journal
After the Law Journal reports on a case or controversy, sometimes there are new developments that we miss out on when we move on to the next story. With 2016 coming to an end, we decided to take stock of new developments in some of those cases.
Bill Wichert | Law360
Employee-friendly initiatives, a proposal barring granting state contracts to businesses with mandatory arbitration clauses and gaming-related measures for racetracks may be on the horizon across New Jersey’s legislative and regulatory landscape in 2017, but the upcoming gubernatorial election could limit how much deal-making gets done.
Matt Arco | NJ Advance Media for NJ.com
Gov. Chris Christie nearing the end of his term, state lawmakers are up for re-election, and there’s a gubernatorial race. In other words, 2017 won’t be a snoozer in New Jersey.
A recent article by Law360 surveyed New Jersey’s legal community about what issues it thinks we should all keep an eye on as members of the legislature come back to Trenton to finish up the second half of their two-year session and vie for re-election. Employment laws that increase employer liability, such as paid sick leave and equal pay, were identified by many as key issues, and NJCJI’s chief counsel, Alida Kass, pointed out that several anti-arbitration measures have also been introduced.
Assembly Bill A-3064 — reads as follows: “A state agency shall not enter into a contract or agreement with a business entity that requires any person or public entity, as a condition of doing business with that business entity, to give up any right or remedy provided by the laws of this state.”
The Assembly passed the bill in October and it remains pending in the Senate.
… the New Jersey Civil Justice Institute, which opposes the legislation, has argued that deterring businesses from including such binding provisions in their contracts would mean transferring wealth from lower- and middle-class consumers to wealthy attorneys who make money litigating class actions.
“If this legislation becomes law, but is not successful at deterring businesses from including arbitration clauses in their contracts, the state of New Jersey will face significant difficulty procuring necessary products from businesses that choose lower prices and predictable contracts over state business,” according to a post on the institute’s website.
Alida Kass, chief counsel of the institute, told Law360 that arbitration is a faster and more efficient means of dispute resolution. For businesses, the value of arbitration is “the ability to ensure that you can resolve disputes on a case-by-case basis and … foreclose a class action,” Kass said.
Kass questioned why the state would “put a thumb on the scale against arbitration,” adding that the process works “especially in these sort of low-dollar consumer claims, so much more efficiently and you’re so much more likely to get a favorable outcome on an individualized basis in a timely manner as opposed to a class action that’s going to drag on for three, five years.”
The American Tort Reform Association has released its annual “Judicial Hellholes” report, and New Jersey is near the top of its list. ATRA notes that our state’s consumer protection laws are far from mainstream, and our court system is becoming hostile to arbitration agreements, in direct contravention of federal law.
“It’s disappointing, but not surprising that ATRA has identified us as a ‘Hellhole,’” said Marcus Rayner, the president of the New Jersey Civil Justice Institute. “Our courts have issued some opinions that are really out of the mainstream in a few key areas – namely consumer protection and arbitration – and people in the business community, now even at the national level, are taking note.”
“The arbitration-related decisions the report highlights are really concerning. The New Jersey Supreme Court has weakened the right to arbitrate in New Jersey, in direct violation of federal law, despite the fact that arbitration is faster, cheaper, and just as fair as going to court. This is especially true when you consider the alternative to arbitration is often class action litigation, where the biggest beneficiary is the attorney bringing the case,” said Rayner.
“When it comes to consumer protection, we’ve been saying for years that New Jersey needs to enact some common sense reforms to bring our law more into the mainstream. Our main consumer protection laws, the Consumer Fraud Act (CFA) and the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), aren’t giving consumers appreciably better customer experiences, but they are inspiring lots of litigation. For example, CFA litigation increased 447% from 2000 to 2009, but there’s no evidence there was more actual fraud to fight during that period,” said Rayner.
“We need to take concrete steps to right our course and improve our state’s legal climate before it’s too late. We have a list of 11 legal issues New Jersey should tackle if it wants to improve its reputation and economic outlook,” concluded Rayner.
A selection of the need-to-know civil justice news for the week of October 22-28. Continue reading