RICHMOND, Va. (Legal Newsline) – Online money lender NHCash.com has filed a motion to dismiss a case against it in the U.S. District Court for the Eastern District of Virginia.

In a motion filed July 13, NHCash.com asked the court to dismiss the class action lawsuit filed against it by five consumers. The plaintiffs all obtained loans from NHCash.com, but according to the motion, only one repaid their debt. The plaintiffs allege that the company charged interest rates greater than the 12 percent allowable by Virginia law.

The company seeks to have the case dismissed, however, because each of the borrowers signed an agreement that included an arbitration and forum selection clause, it says.

The clause, cited in the motion to dismiss, reads, in part, “Any claim or dispute arising from or in any way related to the Agreement must be resolved by binding arbitration in the state where you live instead of a lawsuit. If you want to opt out of arbitration with us, you must notify us in writing of your decision within ten (10) days following the execution of this Agreement… Agreeing to arbitration means that you are waiving your right to a trial by jury and your right to have a court resolve your dispute. You are waiving your right to participate in a class action lawsuit and to certain discovery rules that apply in lawsuits.”

The clause also requires that “we each must pay our own attorney’s fees and other costs. Arbitrators can award reasonable attorney’s fees and costs to the prevailing party, but neither party shall be permitted to recover punitive, exemplary or multiple damages from the other party.” 

However, in the plaintiffs’ complaint, they seek damages, declaratory and injunctive relief, attorney fees and court costs, and any other relief the court sees fit.

The motion addresses the plaintiffs’ request that the court declare the arbitration and forum selection clause void and unenforceable, pointing out that the U.S. Supreme Court has rejected the idea that such a clause is unenforceable in an allegedly usurious contract. 

Citing the Supreme Court’s decision, the motion quotes, “First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract. Second, unless the challenge is to the arbitration clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance. Third, this arbitration law applies in state as well as federal courts.”

Because the plaintiffs’ claims are all related to the agreement referenced by the arbitration clause, NHCash asserts that they must address the issues in arbitration rather than the court, and therefore the claims should be dismissed.

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U.S. District Court for the Eastern District of Virginia
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