Amicus Brief in Support of Plantiffs-Appellees' Petition Arthur Merkin and James Smith v. Vonage America
Aggregate action is often essential to secure relief for consumers and to hold businesses accountable for wrongdoing. Businesses have adopted class-action bans to prevent consumers from bringing legitimate claims.
The U.S. Court of Appeals for the Ninth Circuit correctly held below that, under the FAA, a court must decide a threshold dispute over whether an arbitration clause is enforceable or is unconscionable under applicable state contract law despite the clause’s provision for an arbitrator to decide its validity. In urging reversal, Rent-A-Center and its amici ask the Court to hold that the FAA allows the drafter of a mandatory arbitration clause to make the clause self-enforcing simply by writing in that an arbitrator, not a court, shall decide disputes over validity. This argument is contrary to the letter and purposes of the FAA. The Act provides that written agreements to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2.
NACA is concerned about the increasing use of private, secret arbitration proceedings before the National Arbitration Forum (NAF) to collect consumer debts. In this particular case, NACA is concerned with the creditors practices of attempting to confirm NAF arbitration awards against Louisiana consumers who did not consent to arbitration-- including consumers who are the victims of identity theft or mistaken identity, and who do not owe the underlying debt.
Case involves issues of substantial public interest that should be clarified by the court, including that an arbitrator cannot declare their own jurisdiction, and that a party seeking to confirm an arbitration must prove the existence of a contract to arbitrate. Filed February 28, 2008. Written by David L. Koen, Marisa C. Katz, and NACA member David A. Szwak, of Bodenheiner, Jones, and Szwak.
This brief states that predatory lending is a public policy crisis, which is perpetuated by mandatory arbitration clauses that contain the kind of provisions found in this case. Further, that mandatory arbitration clauses such as Option One's are a central part of a predatory lender's strategy to avoid scrutiny of its practices. This brief was written by Michael D. Donovan, and is co-signed by NACA, the National Consumer Law Center, Community Legal Services, and AARP.
Motion by NACA, AARP, and Consumers League of New Jersey, to file amicus brief in the payday lending case of Jaliyah Muhammad v. County Bank of Rehoboth Beach, DE. This short brief was written by Deborah Zuckerman, AARP, and Ira Rheingold, NACA.
“The imposition of unreasonable costs renders an arbitration clause unenforceable.” This Amicus Brief was written by Deborah Zuckerman and Michael Schuster of AARP Foundation, and Nancy Barron of Kenmitzer, Anderson, Barron and Ogilvie.