• April 12, 2010

The National Arbitration Forum (“NAF”) and related entities are being sued in a large class action based on allegations — basically that the NAF is “egregiously biased” (to quote the characterization of the allegations in today’s ruling by U.S. District Court Judge Paul Magnuson (D. Minn.)) in favor of creditors and against consumers and that there were concealed conflicts of interest underlying the supposedly neutral arbritral body.

In February, Minnesota Litigator reported that the National Arbitration Forum’s motion to dismiss was decisively denied (NAF “Smacked Down”).   In March, Minnesota Litigator reported that the National Arbitration Forum’s motion for expedited review of its motion to stay was also summarily rejected (NAF: “Fallen Down, Can’t Get Up”).  Now it is April and the Court has ruled on the National Arbitration Forum’s to stay…

The NAF’s motion for a stay was denied.  First, the Court pointed out that the NAF sought a stay based on case law regarding denials of claims for qualified immunity of public officials from claims under 42 U.S.C. § 1983.   Here, however, “Defendants are private actors, and whatever threat litigation has on their actions is not a matter of public concern.”

Second, “the procedural posture of this case renders Defendants’ appeal meritless and a stay is therefore not warranted.”

In short, at this point the NAF is being pwned; it has not enjoyed a good 1Q 2010 in this high stakes litigation.  No doubt, however, plaintiffs’ counsel recognize that this could be protracted litigation.  Wins in early skirmishes, “past performance,” may or may not be indicative of future success.

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