AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• Between December 2007 and February 2008, the respondent obtained three short-term consumer loans, known as payday loans, over the internet from subsidiaries of the petitioners. The loans had exorbitantly high annual percentage rates ranging from 521.43% to 730%. Each loan agreement included an arbitration clause that the respondent agreed to electronically (para 2).

Procedural History

• District Court: Denied CLK's motion to compel arbitration based on the arbitration agreement's prohibition against class arbitration being contrary to public policy, as per Fiser v. Dell Computer Corporation (para 4).
• District Court: Denied CANI's motion to compel arbitration on similar grounds as CLK's motion (para 4).
• Court of Appeals: Largely agreed with the district court's reasoning but also considered the unavailability of the National Arbitration Forum (NAF) and the legal effect of that unavailability on the enforceability of the arbitration agreement (paras 5-7).

Parties' Submissions

• Petitioners: Argued for the enforcement of the arbitration agreement, emphasizing the agreement's clause that disputes should be resolved through binding individual arbitration by the National Arbitration Forum (NAF) and not through class arbitration (para 2).
• Respondent: Contended that the arbitration agreement was unenforceable due to its prohibition against class arbitration, which effectively prevented her from vindicating relatively small claims. Additionally, challenged the delegation clause within the arbitration agreement (paras 6-7).

Legal Issues

• Whether the arbitration agreement's prohibition against class arbitration is enforceable.
• Whether the unavailability of the National Arbitration Forum (NAF) affects the enforceability of the arbitration agreement.
• Whether the delegation clause within the arbitration agreement was sufficiently challenged by the respondent.

Disposition

• The Supreme Court of New Mexico affirmed the district court’s dismissal of the petitioners' motions to compel arbitration and remanded to the district court for further proceedings (para 18).

Reasons

• The Supreme Court, per Justice Richard C. Bosson, based its decision on the precedent set in Rivera v. American General Financial Services, Inc., where an arbitration clause similar to the one in the present case was held to be unenforceable. The Court found that the specific designation of the NAF as the arbitration forum was integral to the agreement, and with the NAF no longer available to conduct consumer arbitration, enforcing the agreement as written would be impossible. The Court also noted that the agreement's mandatory language and exclusive references to the NAF further supported the conclusion that the NAF's role was integral to the arbitration agreement. The Court declined to address the applicability of AT&T Mobility LLC v. Concepcion regarding class action waivers, as it would be purely advisory in this context (paras 9-17).