A Bergen County judge has ruled that an arbitration provision in a residential solar power contract is not cause to dismiss a proposed class action suit against the company installing the system.
A class action waiver in Princeton-based NRG Energy's contract with homeowners is void because it lacks consistency and clarity, Judge Robert Wilson of Bergen County Superior Court ruled Friday in Griffoul v. NRG Residential Solar Solutions. And the contract's binding arbitration provision is void because it fails to specify that signing constitutes a waiver of statutory rights under the Consumer Fraud Act and the Truth in Consumer Contract, Warranty and Notice Act, Wilson said.
Wilson's decision on binding arbitration relies on the state Supreme Court's 2014 decision in Atalese v. U.S. Legal Services Group, which said that an arbitration agreement must specify that arbitration is a substitute for the right to bring an action in a court of law. And his finding that the waiver is invalid based on clarity and consistency steers clear of public policy as a basis, as the U.S. Supreme Court specified in a 2011 decision, AT&T Mobility v. Concepcion, Wilson said. Instead, it relies on the narrower basis identified by the Appellate Division in another 2011 case, NAACP of Camden County East v. Foulke Management, which held that such waivers must be spelled out with clarity.
Plaintiffs Brian and Ananis Griffoul contracted with NRG in 2014 to install a solar energy installation at their home at a cost of $16,453, to be repaid over a 20-year term. This February, the couple asked to initiate a statewide class action in Superior Court, claiming the company made misrepresentations and false statements in connection with the lease agreement. Their suit also claims the contract violates clearly established rights under New Jersey law in its provisions on remedies, indemnity, limitation of liability and statute of limitations, among other things.
NRG moved in June to dismiss the case and to compel arbitration, citing a binding arbitration provision in its contract.
But Wilson said the arbitration provision signed by the plaintiffs in the present case, like the one in Atalese, "lacks an explanation that Griffoul was waving his right to seek relief in court for breach of his statutory rights, specifically violations of the CFA and TCCWNA."
In addition, the NRG class action waiver was held to be contradictory. It stated that "each party may bring claims against the other party only in its individual capacity and not as a plaintiff or class member in any purported class or representative proceeding." But that clause apparently allows plaintiffs to bring claims in an individual capacity, which contradicts the provision that purportedly prevents Griffoul from bringing any claim against NRG in court, Wilson said.