NAACP of Camden County East v. Foulke Management Corp.
421 N.J. Super. 404
| N.J. Super. Ct. App. Div. | 2011Background
- Thomas sued a New Jersey car dealership and an NAACP chapter alleging deceptive sales practices and statutory violations, including CFA, PLA, TCCWNA, and LAD claims.
- Thomas signed multiple form documents in the vehicle purchase, notably the RIC, Addendum, SAD, consumer notice, MVROA, waiver, and spot delivery agreement, containing arbitration clauses.
- Arbitration provisions appeared across three documents (RIC, Addendum, SAD) with conflicting terms on forum, arbitrator qualifications, costs, time limits, and class-action waivers.
- The trial court initially dismissed the NAACP for lack of standing, then allowed a Muhammad hearing to assess enforceability of the class-action waiver, and later referred the dispute to arbitration after findings.
- AT&T Mobility v. Concepcion (2011) later influenced the court’s analysis of class-action waivers under the FAA, prompting a de novo review of formation and mutual assent.
- On appeal, the court held the arbitration provisions were unenforceable for lack of mutual assent due to inconsistency and confusion, vacated the class-action waiver as drafted, reinstated the NAACP as a co-plaintiff for now, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arbitration provisions mutual assent | Thomas argues the three arbitration provisions are confusing and incompatible, preventing a clear meeting of the minds. | Foulke contends the provisions can be harmonized and are sufficiently clear when read together. | Provisions unenforceable for lack of mutual assent; severed. |
| Class-action waiver enforceability post AT&T Mobility | Waivers are invalid on public policy/undue chilling effects for low-value claims. | FAA preempts state-law invalidation of class waivers; waivers should be enforced where formation is valid. | Class waiver not per se invalid due to AT&T Mobility, but unenforceable as drafted; severed. |
| NAACP standing as co-plaintiff | NAACP has organizational standing to challenge discriminatory practices. | NAACP lacks standing as a co-plaintiff at this stage. | NAACP reinstated as co-plaintiff pending further record. |
Key Cases Cited
- Rockel v. Cherry Hill Dodge, Inc., 368 N.J. Super. 577 (App.Div. 2004) (conflicting arbitration provisions across documents undermining mutual assent)
- Gras v. Associates First Capital Corp., 346 N.J. Super. 42 (App.Div. 2001) (arbitration provisions enforceable when terms are clear and consistent)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (FAA preempts state-law rules invalidating class-action waivers in adhesion contracts)
- Muhammad v. County Bank of Rehoboth Beach, 189 N.J. 1 (2006) (Muhammad hearing on public policy and class-action waiver enforceability in NJ context)
- Fawzy v. Fawzy, 199 N.J. 456 (2009) (arbitration provisions should be read to favor enforceability in adhesion contracts)