A New Jersey appellate court affirmed an order dismissing a class action and compelling individual (non-class) arbitration. The underlying arbitration agreements provided that the defendant car dealership would pay all costs of the arbitration, which would be arbitrated pursuant to the rules of the American Arbitration Association (AAA). The putative class members interpreted the sole forum as the AAA and central to the purposes of the agreement. When the putative members attempted to initiate arbitration with the AAA, the defendant did not pay the filing and arbitrator fees, resulting in AAA refusing to arbitrate the claims. The putative class members alleged that due to the defendant’s inaction, the arbitration agreement was materially breached. The lower court disagreed, and the appellate court affirmed, holding that the agreement was neither voluntarily breached nor waived. The defendant’s failure to pay the costs of arbitration to the AAA did not evidence an intent to avoid arbitration; the defendant was legitimately disputing whether the AAA was the obligatory forum. Roach v. BM Motoring, LLC, No. A-0749-14T4 (N.J. Super. Ct. App. Div. Jan. 20, 2016).
This post written by Joshua S. Wirth.
See our disclaimer.