Delta Funding v. Harris

Case Updates

The New Jersey Supreme Court agreed with NCLC’s argument that arbitration agreements which preclude the use of class actions are not unconscionable. The court determined the class action bar was not unconscionable because the case raised high stakes and the prospect of attorneys’ fees.

The New Jersey Supreme Court accepted a certified question from the United States Court of Appeals for the Third Circuit which asks whether the arbitration clause at issue is unconscionable. In particular, the arbitration clause, which was included in a mortgage loan contract, provided that foreclosure actions, eviction actions, and other rights of self-help could be litigated in court, but required that all other actions involving the contract be submitted to arbitration. The plaintiff believes that this non-mutuality of obligation renders the provision unconscionable. In addition, the plaintiff challenges the bar to class-wide arbitration. The district court rejected both challenges.