The Star Ledger can be forgiven for its misleading description of the arbitration element in consent decree reached between NJ Division of Consumer Affairs and solar panel company Vivent Solar. 

We were a bit surprised to see an agreement “that it will go to arbitration to resolve future disputes” described as a concession extracted by the DCA. But at first glance, the press release issued by Attorney General Gurbir Grewal seemed to confirm: “The company also agreed to resolve additional consumer complaints – including those received in the future – through binding arbitration if the consumer chooses that option.”

Does our attorney general share our appreciation for efficiencies of arbitration as means of resolving consumer disputes in timely and low-cost fashion? 

Alas, no. The relevant text from the agreement itself provides:

Within thirty (30) days of the effective date, Vivent Solar shall revise the “Arbitration of Disputes and Class Waiver” section, or equivalent section, if the Vivent Solar contract to require that Consumers affirmatively opt-in if they agree to arbitration and to waive their right to participate in a class action.” [emphasis added]

We know consumers rarely read full text of consumer contracts. We know even fewer have strongly held views regarding merits of various dispute resolution mechanisms. As a practical matter, requiring affirmative opt-in effectively dooms arbitration as a uniform and efficient mechanism for resolving future disputes.

This sort of singling out of arbitration agreements for special affirmative hoop-jumping, if enacted as state law, would plainly be preempted by Federal Arbitration Act. It is an example of the sort of hostility to arbitration that prompted enactment of the FAA, that is disappointing to see from our state’s attorney general.