One of four challenges to payday lending operations under North Carolina Law. Check ‘n Go removed McQuillan to federal court, but the case was remanded to state court. Payday lenders Check into Cash, Check ’n Go, and Advance America moved the state trial court to compel individual arbitration.  In late December 2005, the court granted defendants’ motions to compel arbitration, rejecting plaintiffs’ arguments that the class action bans embedded in their arbitration clauses were unconscionable. Counseil in the case are Carlene McNulty of the North Carolina Justice Center; Mal Maynard of the Financial Protection Law Center; Mona Wallace and John Hughes of Salisbury, NC; Jerry Hartzell of Raleigh, NC; Richard Fisher of Cleveland, TN; and Public Justice Attorneys Paul Bland and Leslie Bailey.

Briefs and Documents for the McQuillan Case

Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Compel Arbitration and Stay Proceedings, arguing that an arbitration clause in a payday lender's contract is unenforceable because it is procedurally and substantively unconscionable. In particular, we argue that the clause is unenforceable because it contains a ban on class actions, and because the arbitration provider chosen by the payday lender is the National Arbitration Forum, which we argue is biased in favor of its corporate clients. (Superior Court, New Hanover County, No. 04-CVS-2858, filed August 8, 2005)

Exhibits 1-8; Exhibits 9, 13: affidavits and documents related to procedural unconscionability of the payday loan contracts, illegality of the payday loan industry, and Check 'N Go.

Exhibits 10-12:  affidavits related to the inability of borrowers to bring their claims on an individual basis

Exhibits 14-15; 16-19; 20; 21-26; 27-31; 32-34; 35-37: affidavits and documents related to the National Arbitration Forum

Decision by N.C. State trial court that a payday lender's arbitration clause, which contained a term banning class actions, was unconscionable and unenforceable because it would prevent the consumers from enforcing their rights under NC's consumer protection and small lending statutes. The opinion also holds that the costs to the consumers of bringing arbitration before the National Arbitration Forum are prohibitive, and that the lender's arbitration clause was prohibitive for this reason as well. (july 9, 2009)

Order Denying Motion to Compel Arbitration (july 9, 2009)

Order and Findings Allowing Class Certification (July 9, 2009)