ALBUQUERQUE, N.M. — The decision could have national implications on contract disputes.
The decision makes such one-sided mandatory arbitration clauses unenforceable and illegal in New Mexico, Attorney General Gary King said today, a day after the state’s highest court handed down its decision against World Finance Corp. of New Mexico in favor of Las Vegas, N.M., social worker Laura Cordova.
The case stems from a lawsuit Cordova filed in September 2006 against World Finance that accused the short-term lender of unreasonable debt collection and violating the Unfair Practices Act.
Cordova said she was besieged by the company by nearly three years of increasingly threatening, frequent and demanding phone calls to her office, her home, her relatives and her boss when she could not pay back her loans — at a 110 percent annual interest rate — after she fell ill.
The company challenged her right to a jury trial by invoking a clause in her contract that forced her into mandatory arbitration — a private dispute resolution system that bypasses the courts — overseen by an entity of the company’s own choosing.
Such clauses are prevalent in numerous contracts consumers often unwittingly enter into when they sign up for a credit card, cell phone, loans, medical care or a job.
Read more about this story in tomorrow’s Journal.