Federal Court: Companies seeking to rely on arbitration to quash lawsuits must pay their fees on time

A New Jersey woman’s car dealer (allegedly) stuffed her bill with hidden fees and unadvertised charges. She tried to take them to the consumer arbitration system, as required by her contract. They ignored her. Then, finally, once she brought a class action suit in federal court, the dealer tried to have to the case returned to arbitration.

A judge ruled on October 17 that the dealer can’t have it both ways. Either the dealer, North Plainfield Nissan, should have acknowledged the arbitration proceeding and paid the mandatory fees for it to proceed, or it waived its right to have the case directed to the American Arbitration Association.

This should be seen as good news for the plaintiff in the case, Rachel A. Page, and other potential class members harmed by the car dealership, who will now have their day in court.

It’s also good news for any consumer who tries to access the consumer arbitration system. Many of these individuals see their cases delayed by corporations that neglect to pay arbitration fees on time, despite having explicitly agreed to these fees in binding contracts.

An analysis by the consumer rights service FairShake of consumer arbitration claims that concluded in the second quarter of 2019 shows that claims pursued to a final judgement took over 12 months to resolve on average. Most consumers were instead convinced to settle their claims with the company, or withdraw them, which took an average of slightly under 8 months.

Here’s the original story from Law360:

A New Jersey woman’s car dealer (allegedly) stuffed her bill with hidden fees and unadvertised charges. She tried to take them to the consumer arbitration system, as required by her contract. They ignored her. Then, finally, once she brought a class action suit in federal court, the dealer tried to have to the case returned to arbitration.

A judge ruled on October 17 that the dealer can’t have it both ways. Either the dealer, North Plainfield Nissan, should have acknowledged the arbitration proceeding and paid the mandatory fees for it to proceed, or it waived its right to have the case directed to the American Arbitration Association.

This should be seen as good news for the plaintiff in the case, Rachel A. Page, and other potential class members harmed by the car dealership, who will now have their day in court.

It’s also good news for any consumer who tries to access the consumer arbitration system. Many of these individuals see their cases delayed by corporations that neglect to pay arbitration fees on time, despite having explicitly agreed to these fees in binding contracts.