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Statutory claims, such as Consumer Fraud Act claims, are not arbitrable under New Jersey law unless the arbitration agreement unambiguously states that parties agree to arbitrate all statutory claims, according to a state appeals court in New Jersey. This result would not obtain if the Federal Arbitration Act governed the arbitration agreement.
In Maldanis v. B.G. Pools, Inc., L-3380-06, 2007 WL 3355114 (N.J. Super. Ct. App. Div. Nov. 14, 2007), Maldanis and B.G. signed a contract for the construction of an in-ground pool. After the allegedly defective construction of the pool, Maldanis filed a complaint against B.G. under the state's Consumer Fraud Act (CFA). B.G. moved to compel arbitration under the contract. The trial court granted the motion, holding that the arbitration provision in the contract deprived the court of jurisdiction to hear the complaint.
On appeal, the Court reversed, holding that the arbitration agreement used insufficient language to express an intent to arbitrate statutory claims such as those under the CFA. The Court recited New Jersey case precedent and concluded that the waiver of the right to bring statutory claims to court via an arbitration provision must be done in "unambiguous terms," and "should at least provide that the [party] agrees to arbitrate all statutory claims" arising out of the agreement. Since B.G.'s arbitration provision did not mention statutory claims, the Court found those claims were not presumptively arbitrable and held that the trial court retained jurisdiction over Maldanis's CFA claim.
Under the FAA, arbitration agreements must be enforced in the same manner as any other contract, and any specific arbitration agreement language requirements that arise under state law cannot hinder enforcement of an arbitration agreement.
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