Salem’s Lot

As an attorney of over 40 years experience, I am of the opinion that the enforcement of binding arbitration clauses where parties have grossly unequal bargaining power in the contract process has significantly and unfairly diminished the rights of consumers.

A decision of the West Virginia Supreme Court of Appeals well illustrates my concerns – nursing students who enrolled in Salem International University were denied the ability to seek class action relief due to the school’s arbitration clause.

Justice Workman concurred only because of binding U.S. Supreme Court precedent

the opportunity for the nursing students to seek class relief is of particular importance to the enforcement of West Virginia laws protecting consumers because it provides a mechanism for the spreading of costs. The class action device allows plaintiffs with individually small claims the opportunity for relief that would otherwise not be economically feasible, allowing them to collectively share the otherwise exorbitant costs of bringing and maintaining the lawsuit. “In many cases, the availability of class action relief is a sine qua non to permit the adequate vindication of consumer rights.” State ex rel. Dunlap v. Berger, 211 W.Va. 549, 567 S.E.2d 265, 278 (2002). “The class action is one of the few legal remedies the small claimant has against those who command the status quo.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 186 (1974) (Douglas, J., dissenting, in part).

In light of Concepcion, however, I join the majority opinion grudgingly but note Justice Ginsburg’s sagacious observation that the arbitration decisions rendered by the United States Supreme Court over the last decade “have predictably resulted in the deprivation of consumers’ rights to seek redress for losses, and, turning the coin, they have insulated powerful economic interests from liability for violations of consumer-protection laws.” DirectTV, 136 S.Ct. at 477, (Ginsburg, J., dissenting).

Salem University failed miserably in managing its nursing program but that did not stop it from making a convincing sales pitch to these students that they would get the training and degree required to secure high paying jobs as nurses upon graduation. Salem University worked hard to sign up prospective nursing students by assuring them the program was in sound shape even though the university knew it was in the process of losing its accreditation. Regrettably, these nursing students and their classmates were left holding the bag with no degree, no nursing careers, and student loans that are collecting interest and weighing them down financially.

 These nursing students, negatively impacted by Salem University’s conduct, filed the putative class action complaint against the university in the Circuit Court of Harrison County alleging violations of the West Virginia Consumer Credit Protection Act, negligence, breach of contract, breach of duty of good faith and fair dealing, and conversion of personal property. Were it not for the binding precedent of the United States Supreme Court discussed by the majority, I would have found that the students were entitled to litigate these disputes in our State courts.

 (Mike Frisch)