Court briefing for Federal court case
Caption: Jones v. Chubb
Citation: Civ. Action No. 06-4937 (KSH) (District of New Jersey 2007)
Author of Opinion: Katherine S. Hayden U.S. DJ
Facts: The plaintiffs include Samuel Jones, Michael Corsner, and Andrea Hoagland, all of which who were students in attendance at The Chubb Institute (“TCI”). The Chubb Institute in this case, is the defendant along with Chubb America Service Corporation and High Tech Institute Inc. The Plaintiffs had student loans in the amount of $17,388 (Jones), $17,000 (Corner), and $6,551.28 (Hoagland) in which they claim as losses under their suit. The plaintiff’s claim that the Chubb Institute did not help them further their career through employment placement. The chubb institute had previously issued a 90% retention rate claim. The plaintiffs attempted to unenforce the arbitration agreement and class action clause in the contract they originally signed.
Procedural History: Each student in attendance at TCI signed a contract of cohesion including two clauses that are most relevant to this case. The arbitration clause states that an arbitrator must settle all charges and claims. The second clause stating the prohibition of class action suits. Contrary to the agreement the plaintiffs filed a complaint against TCI in January 2004 in claim that TCI allegedly violated the New Jersey Consumer Fraud Act (CFA). Regardless, the court confirms to stay the action and to compel the arbitration. In response, the plaintiffs applied to appeal this decision.
Legal Issues and Questions Presented: There are two main questions presented which are brought up by the plaintiffs and the defendant. The plaintiffs dispute that the arbitration agreement and class action clause be unenforceable on the argument that their statutory rights be protected. In opposition, the defendants claim to compel arbitration and to stay the action in accordance with the contract initially signed by the plaintiffs. The apparent question seeks an answer as to whether or not the court has the power to decide if the arbitration agreement and class action clause can be unenforced against the defendants.
Rules of Law Applied: In reference to Muhammed vs. County of Rehoboth Beach, the court had ruled in favor of Muhammed deciding that the class arbitration waiver was unenforceable on the grounds that Muhammed’s statutory rights would be infringed upon. The court presented that the plaintiff who would receive no more than $600 from the suit was not receiving enough to maintain competent counsel. The plaintiffs in the Jones vs. Chubb case claim that the verdict from Muhammed vs. County of Rehoboth Beach be applied to enforce the class action clause from the TCI contract. The plaintiffs argue that the clause does not allow for them to hire adequate counsel, therefore, infringing on their statutory rights. In ruling, the court decided that the two cases differ in the way that the plaintiffs in Jones vs. Chubbs would be receiving nearly $52,164, $51,000, and $19,653.78 under the CFA treble regulations. The court decided that the potential money that could be won would be enough to hire adequate representation and therefore does not impose on the plaintiffs’ statutory rights.
This case differs from Sally vs. Option One Mortgage Corp. where a senior woman with only a six-grade education was denied the enforcement of her arbitration clause in the contract of adhesion. Whereas in the Jones vs. Chubb case, the plaintiffs all had at least a high school diploma and were qualified enough to recognize the language and text of the arbitration agreement.
Reasoning Relied on by Court: The Judge had chosen to compel the arbitration agreement in the sense that the plaintiffs were capable of distinguishing the agreement in the contract. The court also ruled to stay the action in favor of the defendants claiming that the plaintiffs could have enough winnings to hire competent counsel.
Holding: The court had decided in favor of the defendant stating that both the arbitration agreement and class-action clause were found not to be unconscionable and the original contract was upheld.
Opinion: The ruling in which the court decided was just because the plaintiffs would have been awarded enough money to have adequate representation while still winning their college loans (losses). I support the court’s ruling especially the reasoning that the plaintiff signed a contract that had stated their rights and moreover, it is not a college institution’s job to provide a guaranteed occupation, it is to provide an education.