May 22, 2017 Articles

After a Business Fails to Pay AAA Fees, N.J. Consumers May Litigate

By P. Jean Baker

An emerging trend in arbitration is the refusal of a party to pay its share of the fees and costs in accordance with either the arbitration agreement or the governing administrative rules. Typically, the only option available to a paying party who wants arbitration to move forward is to pay the nonpaying party's share of the fees and costs. But what if the paying party is a consumer? Relying for guidance on decisions rendered by the Ninth and Tenth Circuits, the New Jersey Supreme Court now offers another option for consumers—litigation when a business breaches the agreement to arbitrate by refusing to pay. Roach v. BM Motoring, LLC, No. 077125 (N.J. Mar. 9, 2017).

Roach v. BM Motoring
Emelia Jackson and Tahisha Roach separately purchased used cars from BM Motoring, LLC and Federal Auto Brokers, Inc., doing business as BM Motor Cars (collectively BM). Each signed an identical dispute resolution agreement (DRA), which required resolution of disputes through arbitration in accordance with the rules of the American Arbitration Association (AAA) before a retired judge or an attorney. The DRA required the dealership to "advance both [parties'] filing, service, administration, arbitrator, hearing, or other fees, subject to reimbursement by decision of the arbitrator."

Premium Content For:
  • Litigation Section
Join - Now