Court Opinion

ID: 3212853
Source: CourtListenerOpinion
Date Created: 2016-06-14 14:06:38.724451+00
Date Added: 2024-06-11T14:29:49.090083
License: Public Domain

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

                       Annemarie Morgan v. Sanford Brown Institute (075074) (A-31-14)

Argued December 2, 2015 – Decided June 14, 2016

ALBIN, J., writing for a majority of the Court.

          In this appeal involving an arbitration provision contained in the enrollment agreement for Sanford Brown
Institute, the Court considers whether the court or an arbitrator should determine the arbitrability of claims for
consumer fraud and other charges asserted in plaintiffs’ complaint.

         Plaintiffs filed a lawsuit asserting that misrepresentations and deceptive business practices by defendant
Sanford Brown Institute and certain administrators caused them to enroll in Sanford Brown’s ultrasound technician
program. Plaintiffs claimed that they sustained financial loss and other injury as a result of defendants’ wrongful
conduct. Defendants filed a motion to compel arbitration of plaintiffs’ claims, but did not make it clear that they
wanted the arbitrator, rather than the court, to decide whether the parties agreed to arbitration. The trial court
declined to enforce the arbitration provision, finding it unenforceable because it did not inform plaintiffs that they
were waiving statutory remedies, and the provision conflicted with the remedies available under the New Jersey
Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195.

          The Appellate Division reversed, dismissed the complaint, and ordered arbitration. The panel held that the
trial court improperly failed to enforce the arbitration agreement’s delegation clause. The panel found that the
parties had clearly and unmistakably agreed that an arbitrator would determine whether the parties agreed to
arbitration, and that plaintiffs failed to specifically attack the delegation clause. The Appellate Division remanded
the matter for arbitration to enable the arbitrator to decide whether the claims asserted were subject to arbitration
under the agreement. However, the panel also made findings on the enforceability of certain provisions in the
arbitration clause. The panel concluded that the arbitration agreement is sufficiently clear and unambiguous to
provide plaintiffs with reasonable notice of the requirement to arbitrate all claims related to their enrollment
agreements, including the CFA claim.

          The Court granted certification limited to the issue of “whether plaintiffs can be compelled to arbitrate all
claims related to their enrollment agreements, including their Consumer Fraud Act claims, under the terms of this
arbitration agreement.” 220 N.J. 265 (2015).

HELD: The arbitration provision and purported delegation clause in the enrollment agreement fail to comply with
the requirements of First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (1995), and Atalese v. U.S. Legal Servs.
Grp., 219 N.J. 430 (2014), cert. denied, 135 S. Ct. 2804 (2015). They also fail to satisfy the elements necessary for
the formation of a contract. Consequently, whether the parties agreed to arbitrate their dispute is an issue for
determination by the court. The Court holds that the arbitration and delegation provisions of the agreement are
unenforceable.

1. The standard of review by this Court of the validity of an arbitration agreement is de novo. The Court owes no
deference to the interpretative analysis of either the trial court or Appellate Division except as the Court may be
persuaded by the reasoning of these courts. The Court construes the arbitration provision anew and without
deference to the determinations of the trial court or the Appellate Division. (p. 14)

2. The parties to an arbitration agreement can agree to delegate to an arbitrator the issue of whether they agreed to
arbitrate a particular dispute. State law governs whether the parties formed a contract to arbitrate their disputes, and
agreed to delegate the issue of arbitrability to an arbitrator. The law presumes that a court, not an arbitrator, decides
any issue concerning arbitrability. To overcome the presumption of judicial resolution, there must be clear and
unmistakable evidence that the parties have agreed that the arbitrator will decide the question of arbitrability.
Silence or ambiguity in an agreement does not overcome the presumption that a court will decide arbitrability. (pp.
15-18)

3. The arbitration provision in this case does not contain a clearly identifiable delegation clause. The provision fails
to explain that an arbitrator will decide whether the parties agreed to arbitrate legal claims, including statutory
violations, and it does not explain that arbitration is a substitute for bringing a claim before a court or jury.
Additionally, defendants did not assert the delegation clause before the motion court, or argue that the court lacked
jurisdiction to decide arbitrability. The motion record reveals that both parties expected the court to decide the issue
of arbitrability. (pp. 19-21)

4. The arbitration agreement and purported delegation clause are subject to state-law contract principles. The
arbitration provision fails to comply with the dictates of Atalese because it fails to explain that arbitration is a
substitute for the right to seek relief in our judicial system. The meaning of arbitration is not self-evident, and the
arbitration provision is otherwise difficult to read. The agreement is not written in plain language that would clearly
inform the average consumer that he or she is giving up the right to seek relief in a judicial forum. This minimal
knowledge of the meaning and effect of arbitration, which was necessary to establish a meeting of the minds based
on a common understanding of the contract terms and enable the student plaintiffs to give informed assent, is absent
here. This flaw also extends to the purported delegation clause. The arbitration provision and the purported
delegation clause are unenforceable. (pp. 22-28)

5. Defendants did not make clear to the motion court that they were invoking a delegation clause and that the
decision whether the parties agreed to arbitration resided with the arbitrator, not the court. The obligation of a party
to mount a specific challenge to the validity of a delegation clause, as required by Rent-A-Center, 561 U.S. 63
(2010), presupposes a clearly identifiable delegation clause. Because the arbitration provision did not clearly and
unmistakably delegate arbitrability to the arbitrator, and did not plainly define arbitration as a substitute for a
judicial forum, plaintiffs cannot be faulted for failing to object to an inadequately defined delegation clause. (pp. 8-
10, 18, 28)

         The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the trial court
for proceedings consistent with this opinion.

          JUSTICE PATTERSON, DISSENTING, would affirm the Appellate Division’s determination that the
United States Supreme Court’s decision in Rent-A-Center compels the conclusion that the parties’ dispute regarding
arbitrability should be decided by an arbitrator applying principles of New Jersey contract law. Justice Patterson
states that because plaintiffs, in the trial court, did not challenge the contract language that defendants invoked on
the question of arbitrability, they therefore waived their challenge to the delegation provision under Rent-A-Center.
Justice Patterson concludes that all issues in the matter, including plaintiffs’ claims that the arbitration provision is
unconscionable, should be determined in arbitration.

         CHIEF JUSTICE RABNER, JUSTICES LaVECCHIA and SOLOMON, and JUDGE CUFF
(temporarily assigned), join in JUSTICE ALBIN’s opinion. JUSTICE PATTERSON filed a separate,
dissenting opinion. JUSTICE FERNANDEZ-VINA did not participate.

                                                           2
                                     SUPREME COURT OF NEW JERSEY
                                       A-31 September Term 2014
                                                075074

ANNEMARIE MORGAN and TIFFANY
DEVER,

    Plaintiffs-Appellants,

         v.

SANFORD BROWN INSTITUTE,
CAREER EDUCATION CORPORATION,
INC.,

    Defendants-Respondents,

         and

MATTHEW DIACONT, GREG LNU,
SALVATORE COSTA, JANET YOUNG,
and KRISTA HOLDEN,

    Defendants.

         Argued December 2, 2015 – Decided June 14, 2016

         On certification to the Superior Court,
         Appellate Division.

         Robert J. O’Shea, Jr., argued the cause for
         appellants.

         Louis Smith argued the cause for respondents
         (Greenberg Traurig, attorneys; Mr. Smith and
         Brian T. Feeney, a member of the
         Commonwealth of Pennsylvania and Connecticut
         bars, on the briefs).

         James A. Barry argued the cause for amicus
         curiae New Jersey Association for Justice
         (Locks Law Firm, attorneys; Mr. Barry,
         Michael A. Galpern, Andrew P. Bell, and
         Charles Riley, on the brief).

                                1
         Mark Miller argued the cause for amicus
         curiae Pacific Legal Foundation.

         Gavin J. Rooney, Joseph A. Fischetti and Amy
         C. Gromek submitted a brief on behalf
         of amici curiae New Jersey Civil Justice
         Institute and Chamber of Commerce of the
         United States of America.

    JUSTICE ALBIN delivered the opinion of the Court.

    Last term, we held that an arbitration provision in a

consumer contract that fails to explain in some minimal way that

arbitration is a substitute for a consumer’s right to pursue

relief in a court of law is unenforceable.   Atalese v. U.S.

Legal Servs. Grp., 219 N.J. 430, 436 (2014), cert. denied, __

U.S. __, 135 S. Ct. 2804, 192 L. Ed. 2d 847 (2015).    Under the

Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, state law

governs whether parties to a consumer contract have agreed to

arbitrate their disputes.   The formation of an agreement to

arbitrate under state law requires that a consumer have some

understanding that, by accepting arbitration, she is

surrendering her common-law and constitutional right of access

to the courthouse.   Because the term “arbitration” is not self-

defining, an arbitration agreement must inform a consumer in

some manner that she is waiving her right to seek relief in the

judicial system.

    Plaintiffs filed a lawsuit claiming that the

                                2
misrepresentations and deceptive business practices of defendant

Sanford Brown Institute and certain defendant administrators led

them both to enroll in Sanford Brown’s ultrasound technician

program.   The enrollment agreement signed by plaintiffs

contained an arbitration provision that nowhere mentions that

the two students were surrendering their right to resolve their

legal claims in a judicial forum.    The issue in this case is

whether a judge or an arbitrator will decide whether the parties

agreed to arbitrate the consumer-fraud and other claims raised

in plaintiffs’ complaint.

    Defendants filed a motion to compel arbitration, but did

not make clear that they wanted the arbitrator, rather than the

court, to decide whether the parties agreed to arbitration.      The

trial court declined to submit the lawsuit to arbitration

because the arbitration provision did not inform plaintiffs that

they were waiving statutory remedies and because the provision

conflicted with the remedies available under the New Jersey

Consumer Fraud Act, N.J.S.A. 56:8-1 to -195.

    The Appellate Division concluded that the trial court

failed to enforce the arbitration agreement’s clause delegating

to the arbitrator the issue of whether the parties agreed to

arbitration and remanded for arbitration.    The appellate panel

found that “the parties ‘clearly and unmistakably’ agreed an

arbitrator would determine issues of arbitrability” and that

                                 3
plaintiffs failed to “specifically attack[] the delegation

clause.”1   The panel therefore determined that “arbitrability

[was] for the arbitrator to decide.”

     We reverse.   In doing so, we recognize that both the trial

court and Appellate Division did not have the benefit of Atalese

at the time they rendered their decisions.

     An agreement to delegate arbitrability to an arbitrator,

like an arbitration agreement itself, must satisfy the elements

necessary for the formation of a contract under state law.

First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.

Ct. 1920, 1924, 131 L. Ed. 2d 985, 994 (1995).     The putative

delegation clause does not explain that arbitration is a

substitute for the right to seek relief in court -- information

necessary for the formation of a valid contract.

     As important, the arbitration provision in Sanford Brown’s

enrollment agreement does not contain a clearly identifiable

delegation clause.2   Indeed, defendants never asserted with any

1 Arbitrability is whether the parties have agreed to submit to
an arbitrator or a court the authority to decide whether a
dispute is subject to arbitration. First Options of Chi., Inc.
v. Kaplan, 514 U.S. 938, 942-43, 115 S. Ct. 1920, 1923-24, 131
L. Ed. 2d 985, 992 (1995).

2 A delegation clause is a clause in an arbitration agreement
that assigns to the arbitrator the decision whether a dispute is
subject to arbitration. Rent-A-Ctr., W., Inc. v. Jackson, 561
U.S. 63, 68-69, 130 S. Ct. 2772, 2777, 177 L. Ed. 2d 403, 411
(2010).

                                 4
clarity before the motion court that they were relying on a

delegation clause.   Unless the parties have clearly delegated to

an arbitrator the decision whether the parties agreed to

arbitration, the issue is for a court to resolve.    Ibid.    Last,

Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S. Ct.
2772, 177 L. Ed. 2d 403 (2010), does not suggest that a party is

obliged to specifically challenge a delegation provision that

cannot be clearly identified in an arbitration agreement.

    The arbitration provision here does not conform to the

dictates of First Options or Atalese.     Accordingly, the

arbitration provision and its putative delegation clause are not

enforceable.   We remand to the trial court for proceedings

consistent with this opinion.

                                I.

                                A.

    In May 2013, plaintiffs Annemarie Morgan and Tiffany Dever

filed a civil action in Superior Court against defendants

Sanford Brown Institute and its parent company, Career Education

Corporation.   Plaintiffs also named as defendants Sanford

Brown’s chief executive officer, admission and financial aid

officers, and clinical director.     The complaint alleged that

defendants, either collectively or individually, committed (1) a

violation of the Consumer Fraud Act, (2) breach of contract, (3)

breach of warranties, and (4) negligent misrepresentation.

                                 5
     Sanford Brown is a private, for-profit educational

institution with a campus in Trevose, Pennsylvania, that offers

medical-related training programs.   In 2009, plaintiffs signed

enrollment agreements for admission into Sanford Brown’s 2010

ultrasound technician program.

     In the complaint, plaintiffs claimed that defendants

misrepresented the value of the school’s ultrasound technician

program and the quality of its instructors, instructed students

on outdated equipment and with inadequate teaching materials,

provided insufficient career-service counseling, and conveyed

inaccurate information about Sanford Brown’s accreditation

status.   The complaint further alleged that Sanford Brown

employed high-pressure and deceptive business tactics that

resulted in plaintiffs financing their education with high-

interest loans, passing up the study of ultrasound at a

reputable college, and losing career advancement opportunities.

     Without answering the complaint, defendants filed a motion

in Superior Court to compel arbitration and to dismiss

plaintiffs’ claims pursuant to Rule 4:6-2.3   Defendants appended

to the motion the four-page enrollment agreements signed by

plaintiffs before their admission into the ultrasound program.

3 Before the motion court, Sanford Brown claimed that the
individual defendants had not been served with the complaint.
The individual defendants are not a party to this appeal.

                                 6
The Sanford Brown enrollment agreement included payment terms

for tuition and fees, disclaimers, and an arbitration provision.

      Plaintiffs’ signatures appear on the second page of their

agreements, as do the signatures of Sanford Brown’s “Admissions

Representative” and “Authorized School Official.”

Immediately above the signature line is the following text in

italicized ten-point Times New Roman font:                                        “THIS CONTRACT CONTAINS A

BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.”

      The arbitration provision at issue appears on page four in

thirty-five unbroken lines of nine-point Times New Roman font.

The relevant part of the arbitration provision is reproduced

here in its original font and font size:4

             Agreement to Arbitrate -- Any disputes, claims, or controversies between the parties to this
             Enrollment Agreement arising out of or relating to (i) this Enrollment Agreement; (ii) the
             Student’s recruitment, enrollment, attendance, or education; (iii) financial aid or career
             service assistance by SBI; (iv) any claim, no matter how described, pleaded or styled,
             relating, in any manner, to any act or omission regarding the Student’s relationship with
             SBI, its employees, or with externship sites or their employees; or (v) any objection to
             arbitrability or the existence, scope, validity, construction, or enforceability of this
             Arbitration Agreement shall be resolved pursuant to this paragraph (the “Arbitration
             Agreement”). Choice of Arbitration Provider and Arbitration Rules -- Unless the parties
             agree to an alternative, the arbitration shall be administered by the American Arbitration
             Association (“AAA”) or the National Arbitration Forum (“NAF”). The arbitration shall be
             before a single arbitrator. . . . Choice of Law -- The arbitrator shall apply federal law to
             the fullest extent possible, and the substantive and procedural provisions of the Federal
             Arbitration Act (9 U.S.C. §§ 1-16) shall govern this Arbitration Agreement and any and all
             issues relating to the enforcement of the Arbitration Agreement and the arbitrability of
             claims between parties. Costs, fees, and expenses of arbitration -- Each party shall bear
             the expense of its own counsel, experts, witnesses, and preparation and presentation of
             proofs. All fees and expenses of the arbitrator and administrative fees and expenses of the
             arbitration shall be borne equally by the parties unless otherwise provided by the rules of
             the AAA or the NAF governing the proceeding, or by specific ruling by the arbitrator, or
             by agreement of the parties. Relief and Remedies -- The arbitrator shall have the authority
             to award monetary damages and may grant any non-monetary remedy or relief available
             by applicable law and rules of the arbitration forum governing the proceeding and within

4 For ease of reading, the arbitration provision is reproduced in
full in Courier New, twelve-point font in the addendum. In the
original enrollment agreement, each line of text is
approximately six inches long, whereas the excerpted lines above
are approximately four inches long.

                                                         7
         the scope of this Enrollment Agreement. The arbitrator will have no authority to alter any
         grade given to the Student or to require SBI to change any of its policies or procedures.
         The arbitrator will have no authority to award consequential damages, indirect damages,
         treble damages or punitive damages, or any monetary damages not measured by the
         prevailing party’s economic damages. The arbitrator will have no authority to award
         attorney’s fees except as expressly provided by this Enrollment Agreement or authorized
         by law or the rules of the arbitration forum. . . . Arbitrator’s Award -- At the request of
         either party, the arbitrator shall render a written award briefly setting forth his or her
         essential findings and conclusions. Judgment on the award rendered by the arbitrator may
         be entered in any court having jurisdiction. Severability and right to waive -- If any part
         or parts of this Arbitration Agreement are found to be invalid or unenforceable by a
         decision of a tribunal of competent jurisdiction, then such specific part or parts shall be of
         no force and effect and shall be severed, but the remainder of this Arbitration Agreement
         shall continue in full force and effect. Any or all of the limitations set forth in this
         Arbitration Agreement may be specifically waived by the party against whom the claim is
         asserted. Such waiver shall not waive or effect any other portion of this Arbitration
         Agreement. Survival of provisions of this agreement -- This Arbitration Agreement will
         survive the termination of the Student’s relationship with SBI.

                                                  B.

    In support of their motion to compel arbitration,

defendants filed a supporting brief and a reply brief and

engaged in an oral colloquy with the court.                                       Although defendants

urged the court to dismiss the complaint and send plaintiffs’

dispute to arbitration, defendants did not assert with any

clarity that the arbitrator, not the judge, should decide

whether the parties agreed to arbitration.                                      In other words,

defendants did not truly contest the court’s power to decide

arbitrability.       They did not argue that the arbitration

provision contained a “delegation clause,” as they did before

the Appellate Division and this Court.                                 Nor did they cite to

Rent-A-Center for the proposition that plaintiffs failed to

challenge the arbitration provision’s putative delegation

clause, as they did before the Appellate Division and this

Court.

                                                      8
    Indeed, defendants’ proposed order did not ask the motion

court to submit to an arbitrator whether the parties agreed to

arbitration.   The proposed order merely sought to compel

plaintiffs “to submit the present dispute to arbitration.”

    Plaintiffs generally argued that the arbitration provision

was unconscionable and therefore void because its terms were at

odds with the Consumer Fraud Act’s allowance of treble damages

and attorney’s fees.

    The motion court denied defendants’ motion to compel

arbitration.   The court explained that the arbitration provision

did not contain language stating that plaintiffs agreed to waive

their “federal or statutory remedies.”   The court also concluded

that the arbitration provision was at odds with the Consumer

Fraud Act because the provision disallowed attorney’s fees to

plaintiffs if they were the prevailing parties and because it

limited the full range of damages permitted under the Act.

                                 C.

    The Appellate Division reversed the trial court, dismissing

plaintiffs’ complaint and directing that plaintiffs’ claims be

sent to arbitration in accordance with the enrollment

agreements.    The panel accepted defendants’ contention that the

trial court ignored the arbitration provision’s “delegation

clause.”   It determined that plaintiffs had not “specifically

attacked the delegation clause,” and, in the absence of such a

                                 9
challenge, the delegation clause had to be treated as valid,

citing Rent-A-Center, supra, 561 U.S. at 72, 130 S. Ct. at 2779,

177 L. Ed. 2d at 413.

    The panel further held that “the parties ‘clearly and

unmistakably’ agreed an arbitrator would determine issues of

arbitrability” based on language in the enrollment agreement,

which reads:   “[A]ny objection to arbitrability or the

existence, scope, validity, construction, or enforceability of

this Arbitration Agreement shall be resolved pursuant to this

paragraph.”    Accordingly, the panel concluded that the trial

court erred by not submitting the issue of arbitrability to

arbitration.

    Although the panel decided that the arbitrator, not a

court, should rule on arbitrability, the panel nevertheless

proceeded to make its own legal findings on the enforceability

of certain terms in the arbitration clause.    The panel struck

down as unconscionable that part of the arbitration clause

prohibiting the arbitrator from awarding treble damages, as

permitted by the Consumer Fraud Act.    It also found that the

arbitration clause’s severability provision “addresses the

motion judge’s understandable concern of possible conflict with

the [Consumer Fraud Act].”    The panel concluded by stating “that

the arbitration agreement is sufficiently clear, unambiguously

worded, and drawn in suitably broad language to provide

                                 10
plaintiffs with reasonable notice of the requirement to

arbitrate all claims related to their enrollment agreements,

including their [Consumer Fraud Act] claims.”

    We granted plaintiffs’ petition for certification “limited

to the issue of whether plaintiffs can be compelled to arbitrate

all claims related to their enrollment agreements, including

their Consumer Fraud Act claims, under the terms of this

arbitration agreement.”   Morgan v. Sanford Brown Inst., 220 N.J.
265, 265-66 (2015).   We also granted the motions of the New

Jersey Association for Justice, the Pacific Legal Foundation,

and the New Jersey Civil Justice Institute and Chamber of

Commerce of the United States of America to participate as amici

curiae.

                                II.

                                A.

    Plaintiffs contend that they did not know that the

arbitration provision denied them their right of access to a

judicial forum and to a jury trial.   They insist that the

arbitration provision was shrouded in ambiguity and did not

provide the information necessary for an effective knowing and

voluntary waiver of rights.   In particular, plaintiffs claim

that the arbitration provision is unenforceable under Atalese

because the enrollment agreement failed to explain that

arbitration was a substitute for their right to seek relief in

                                11
court.   In making those arguments, plaintiffs do not distinguish

between the validity of the arbitration agreement as a whole and

the putative delegation clause.    Plaintiffs reason that the

withheld waiver-of-rights information foreclosed a meeting of

minds, which is essential for the formation of a valid contract.

Last, plaintiffs submit that the arbitration provision is void

because its terms are inimical to remedies provided under the

Consumer Fraud Act, which include treble damages and attorney’s

fees to a prevailing claimant.

    Amicus curiae the New Jersey Association for Justice argues

that the enrollment agreement’s arbitration provision does not

meet the dictates of the Plain Language Act, N.J.S.A. 56:12-2.

According to the Association, the arbitration provision not only

fails to inform “prospective students that they are waiving any

rights,” as mandated by Atalese, supra, 219 N.J. at 436, but

also is confusing and misleading about the breadth of

arbitration.   The Association states that defendants did not

establish by clear and unmistakable evidence that the parties

intended to delegate arbitrability, as required by Rent-A-

Center, supra, 561 U.S. at 72, 130 S. Ct. at 2779, 177 L. Ed. 2d

at 413, and First Options, supra, 514 U.S. at 944, 115 S. Ct. at

1924, 131 L. Ed. 2d at 994.   The Association submits that the

enrollment agreement “fails to evidence a mutual assent on the

part of the parties to arbitrate and is therefore

                                  12
unenforceable.”

                                B.

    Defendants claim that the enrollment agreement’s

arbitration provision includes a delegation clause, which

authorizes the arbitrator to decide whether the parties agreed

to arbitration.   Defendants assert that plaintiffs’ failure to

challenge the delegation clause specifically requires that

arbitrability must be decided by the arbitrator, citing Rent-A-

Center, supra, 561 U.S. at 72, 130 S. Ct. at 2779, 177 L. Ed. 2d

at 413.   The arbitrator’s authority, according to defendants,

extends to deciding whether the arbitration provision is

enforceable under Atalese.   Defendants also argue that Atalese

is distinguishable from the present case because the Atalese

arbitration provision did not contain a delegation clause.

Last, defendants submit that the arbitration clause is clear and

unambiguous and that a reasonable consumer would understand that

she was waiving her right to sue Sanford Brown in court over any

dispute arising from the enrollment agreement.

    Amicus curiae Pacific Legal Foundation argues that the

delegation clause “[h]ere, as in Rent-A-Center, provides that

the parties agree to arbitrate threshold issues concerning the

arbitrability of ‘any claims,’ including but not limited to

statutory claims.”   Accordingly, the Foundation urges that we

uphold the validity of the delegation clause, which plaintiffs

                                13
failed to attack, and leave any challenges about arbitrability

to the arbitrator.

    Amici curiae New Jersey Civil Justice Institute and Chamber

of Commerce of the United States jointly contend that New Jersey

case law, by describing an arbitration agreement as a waiver of

rights and then by requiring that the waiver be “clear and

unambiguous,” disfavors arbitration and therefore violates the

Federal Arbitration Act and applicable United States Supreme

Court precedents.    They urge the Court to align New Jersey law

with federal precedent and “enforce [arbitration] agreements

under general principles of contract (i.e., offer and

acceptance) rather than under the restrictive standard

applicable to waivers of substantive rights.”

                                III.

    Our standard of review of the validity of an arbitration

agreement, like any contract, is de novo.    Atalese, supra, 219

N.J. at 446 (citing Hirsch v. Amper Fin. Servs., LLC, 215 N.J.
174, 186 (2013)).    We owe no deference to the interpretative

analysis of either the trial court or Appellate Division, except

as we may be persuaded by the reasoning of those courts.     See

id. at 445-46 (citing Kieffer v. Best Buy, 205 N.J. 213, 222-23

(2011)).   We therefore construe the arbitration provision with

fresh eyes.   Kieffer, supra, 205 N.J. at 223.

                                 IV.

                                 14
                                  A.

    The key issue in this case is who decides whether the

parties agreed to arbitrate disputes arising from the enrollment

agreement:     a court or an arbitrator.

    Parties to an arbitration agreement can agree to delegate

to an arbitrator the issue of whether they agreed to arbitrate a

particular dispute.     Rent-A-Ctr., supra, 561 U.S. at 68-69, 130
S. Ct. at 2777, 177 L. Ed. 2d at 411.      Thus, a delegation clause

in an arbitration agreement can provide that an arbitrator,

rather than a judge, will decide such “threshold issues” as

whether the parties agreed to arbitrate a legal claim brought by

a plaintiff.    See id. at 68, 130 S. Ct. at 2777, 177 L. Ed. 2d

at 411.

    State law governs not only whether the parties formed a

contract to arbitrate their disputes, but also whether the

parties entered an agreement to delegate the issue of

arbitrability to an arbitrator.     First Options, supra, 514 U.S.

at 944, 115 S. Ct. at 1924, 131 L. Ed. 2d at 993.     The Federal

Arbitration Act simply requires that arbitration agreements be

placed “on an equal footing with other contracts” and enforced

according to their terms.     Rent-A-Ctr., supra, 561 U.S. at 67,
130 S. Ct. at 2776, 177 L. Ed. 2d at 410 (citing Buckeye Check

Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S. Ct. 1204,

1207, 163 L. Ed. 2d 1038, 1042 (2006); Volt Info. Scis. v. Bd.

                                  15
of Trs., 489 U.S. 468, 478, 109 S. Ct. 1248, 1255, 103 L. Ed. 2d
488, 499-500 (1989)).   Under the FAA, an arbitration agreement,

like any contract, may be held invalid “upon such grounds as

exist at law or in equity for the revocation of any contract.”

9 U.S.C.A. § 2;5 see also Rent-A-Ctr., supra, 561 U.S. at 68, 130

S. Ct. at 2776, 177 L. Ed. 2d at 410 (stating that arbitration

agreements, like other contracts, “may be invalidated by

‘generally applicable contract defenses, such as fraud, duress,

or unconscionability’” (quoting Doctor’s Assocs., Inc. v.

Casarotto, 517 U.S. 681, 687, 116 S. Ct. 1652, 1656, 134 L. Ed.
2d 902, 909 (1996))).   The purpose of the FAA is “to make

arbitration agreements as enforceable as other contracts, but

not more so.”   Prima Paint Corp. v. Flood & Conklin Mfg. Co.,

388 U.S. 395, 404 n.12, 87 S. Ct. 1801, 1806 n.12, 18 L. Ed. 2d
1270, 1277 n.12 (1967).

     Although the FAA expresses a national policy favoring

arbitration, the law presumes that a court, not an arbitrator,

decides any issue concerning arbitrability.   First Options,

supra, 514 U.S. at 944, 115 S. Ct. at 1924, 131 L. Ed. 2d at

5 Section 2 of the FAA provides that “[a] written provision in .
. . a contract evidencing a transaction involving commerce to
settle by arbitration a controversy thereafter arising out of
such contract or transaction . . . shall be valid, irrevocable,
and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C.A. § 2.

                                16
994.   In First Options, the United States Supreme Court stated

that to overcome the judicial-resolution presumption, there must

be “clea[r] and unmistakabl[e]” evidence “that the parties

agreed to arbitrate arbitrability.”    Ibid. (alterations in

original) (quoting AT&T Techs., Inc. v. Commuc’ns Workers, 475
U.S. 643, 649, 106 S. Ct. 1415, 1418, 89 L. Ed. 2d 648, 656

(1986) (“Unless the parties clearly and unmistakably provide

otherwise, the question of whether the parties agreed to

arbitrate is to be decided by the court, not the arbitrator.”)).

Silence or ambiguity in an agreement does not overcome the

presumption that a court decides arbitrability.    Ibid.

       The issue in First Options was whether a stock-trading firm

had agreed with clients to arbitrate the issue of arbitrability.

Id. at 940-41, 115 S. Ct. at 1922-23, 131 L. Ed. 2d at 991-92.

The Supreme Court determined that, based on the record, the firm

could not “show that the [clients] clearly agreed to have the

arbitrators decide (i.e., to arbitrate) the question of

arbitrability.”   Id. at 946, 115 S. Ct. at 1925, 131 L. Ed. 2d

at 994.    Because the clients “did not clearly agree to submit

the question of arbitrability to arbitration,” the arbitrability

of the “dispute was subject to independent review by the

courts.”   Id. at 947, 115 S. Ct. at 1925-26, 131 L. Ed. 2d at

995.

       Rent-A-Center did not alter the framework of First Options.

                                 17
Rent-A-Center, supra, involved an employment contract, which

contained an arbitration provision with a clear and unmistakable

delegation clause. 561 U.S. at 65-66, 130 S. Ct. at 2775, 177
L. Ed. 2d at 408-09.   The Supreme Court reaffirmed the central

holding of First Options that “[c]ourts should not assume that

the parties agreed to arbitrate arbitrability unless there is

clea[r] and unmistakabl[e] evidence that they did so.”     Id. at

69 n.1, 130 S. Ct. at 2777 n.1, 177 L. Ed. 2d at 411 n.1

(alterations in original) (quoting First Options, supra, 514

U.S. at 944, 115 S. Ct. at 1924, 131 L. Ed. 2d at 993).     The

clarity of the delegation clause in Rent-A-Center was not in

dispute.

    Rent-A-Center merely stated that a party, in opposition to

a motion to compel arbitration before a trial court, must mount

a specific challenge to the validity of a delegation clause.

Id. at 72, 130 S. Ct. at 2779, 177 L. Ed. 2d at 413.     But Rent-

A-Center presupposed a clearly identifiable delegation clause

that would be apparent to the parties.   The employment contract

in Rent-A-Center stated that “[t]he Arbitrator, and not any

federal, state, or local court or agency, shall have exclusive

authority to resolve any dispute relating to the interpretation,

applicability, enforceability or formation of this Agreement.”

Ibid. (alteration in original).

    Given the clear and unmistakable language evidencing an

                                  18
agreement to delegate arbitrability in Rent-A-Center, the

Supreme Court held that unless the employee “challenged the

delegation provision specifically,” the provision is valid and

enforceable under the FAA, “leaving any challenge to the

validity of the [a]greement as a whole for the arbitrator.”    Id.

at 72, 130 S. Ct. at 2779, 177 L. Ed. 2d at 413.   The Court

pointedly noted that “[t]he issue of the agreement’s ‘validity’”

was in dispute, not “whether any agreement between the parties

‘was ever concluded.’”   Id. at 70 n.2, 130 S. Ct. at 2778 n.2,
177 L. Ed. 2d at 412 n.2 (quoting Buckeye Check Cashing, supra,

546 U.S. at 444 n.1, 126 S. Ct. at 1208 n.1, 163 L. Ed. 2d at

1043 n.1).   The issue in this case is whether the parties formed

a contract -- that is, whether the parties concluded an

agreement.   In contrast, the primary issue in Rent-A-Center

dealt with the validity of an employment contract that the

plaintiff claimed was unconscionable.

                                B.

    Unlike in Rent-A-Center, the arbitration provision in this

case does not have a clearly identifiable delegation clause.

The “Agreement to Arbitrate” in Sanford Brown’s enrollment

agreement reads, in part:   “Any disputes, claims, or

controversies . . . arising out of or relating to (i) this

Enrollment Agreement; (ii) the Student’s recruitment,

enrollment, attendance, or education; (iii) financial aid or

                                19
career service assistance by SBI; (iv) any claim . . . or (v)

any objection to arbitrability . . . shall be resolved pursuant

to this paragraph.”   (Emphasis added).   The paragraph does not

explain that an arbitrator will decide whether the parties

agreed to arbitrate legal claims, including statutory

violations; nor does it explain that arbitration is a substitute

for bringing a claim before a court or jury.   The purported

delegation clause bears no resemblance to the one in Rent-A-

Center.

    Significantly, defendants did not raise the issue of a

delegation clause or even once cite Rent-A-Center before the

motion court.   Defendants did not argue to the motion court that

it lacked jurisdiction to decide whether the parties agreed to

arbitration because that role was for the arbitrator alone.

Instead, defendants filed a brief with the motion court stating

that it should “order Plaintiffs to submit their claims to

arbitration.”   In support of the argument that the court should

decide arbitrability, defendants stated that “a motion to compel

arbitration under the FAA merely requires the court to determine

whether there is a valid and enforceable arbitration agreement

between the parties, and whether the claims at issue fall within

the substantive scope of that agreement,” quoting Medtronic AVE,

Inc. v. Advanced Cardiovascular Systems, Inc., 247 F.3d 44, 54-

55 (3d Cir. 2001) (emphasis added).   Defendants make much of the

                                20
fact that plaintiffs did not challenge the purported delegation

clause, yet defendants never clearly asserted the existence of

one.   From a review of the motion-court record, it appears that

both parties expected the motion court to decide whether the

claims made by plaintiffs in their consumer-fraud action were

subject to arbitration.   The motion court did not have

telepathic powers to grasp the delegation-clause issue that

defendants raised for the first time so definitively before the

Appellate Division and this Court.   The motion court cannot be

expected to address an issue that was not plainly raised before

it.6

6 The portion of defendants’ oral colloquy before the motion
court quoted by the dissent is not inconsistent with the parts
of the brief cited above. Defendants stated:

          And indeed when you look at the scope of this
          agreement   it   covers  any   objection   to
          arbitrability, or the existence, scope,
          validity, construction or enforceability of
          this arbitration agreement shall be resolved
          pursuant to this paragraph, so very broadly
          channels disputes like those that have been
          raised by the plaintiffs in this case for the
          arbitrator to decide.

That language fails to make clear that defendants wanted an
arbitrator -- not the motion court -- to decide whether the
parties had agreed to arbitrate the claims raised in plaintiffs’
lawsuit. Defendants did not argue that a delegation clause, by
whatever name, stripped the court of jurisdiction to decide the
issue. Defendants merely stated that “disputes like those that
have been raised by the plaintiffs” were “for the arbitrator to
decide.” That suggests defendants were looking for a ruling
from the court that the lawsuit was subject to arbitration. In

                                21
                                C.

    The arbitration provision in the Sanford Brown enrollment

agreement suffers from the same flaw found in the arbitration

provision in Atalese -- it does not explain in some broad or

general way that arbitration is a substitute for the right to

seek relief in our court system.     That flaw -- non-compliance

with the dictates of Atalese -- extends to the purported

delegation clause, which “is simply an additional, antecedent

agreement the party seeking arbitration” looks to enforce.     See

Rent-A-Ctr., supra, 561 U.S. at 70, 130 S. Ct. at 2777-78, 177

L. Ed. 2d at 411.

   The arbitration agreement and purported delegation clause in

the present case are subject to state-law contract principles.

First Options, supra, 514 U.S. at 944, 115 S. Ct. at 1924, 131
L. Ed. 2d at 993.   An enforceable agreement requires mutual

assent, a meeting of the minds based on a common understanding

of the contract terms.   Atalese, supra, 219 N.J. at 442.    The

meaning of arbitration is not self-evident to the average

consumer, who will not know, “without some explanatory

comment[,] that arbitration is a substitute for the right to

any event, defendants failed clearly to assert that they were
relying on a delegation clause.

                                22
have one’s claim adjudicated in a court of law.”7   Ibid.

     The right to a civil jury trial is guaranteed by the New

Jersey Constitution, N.J. Const. art. I, ¶ 9, and conferred by

the New Jersey Consumer Fraud Act, see Allstate N.J. Ins. Co. v.

Lajara, 222 N.J. 129, 147, 151 (2015) (citing Zorba Contractors,

Inc. v. Hous. Auth., 362 N.J. Super. 124, 138-39 (App. Div.

2003)).   Our state-law jurisprudence makes clear “that when a

contract contains a waiver of rights -- whether in an

arbitration or other clause -- the waiver ‘must be clearly and

unmistakably established.’”   Atalese, supra, 219 N.J. at 444

(quoting Garfinkel v. Morristown Obstetrics & Gynecology

Assocs., 168 N.J. 124, 132 (2001)).   Under state contract law,

no greater burden is placed on an arbitration agreement than

other agreements waiving constitutional or statutory rights.

7 One statistical study concluded “that consumers have no idea
what they are agreeing to when they enter into contracts
containing arbitration clauses” and that many consumers believe
that access to “court will be available to them, if only as a
last resort.” Jeff Sovern, Elayne E. Greenberg, Paul F. Kirgis,
& Yuxiang Liu, “Whimsy Little Contracts” with Unexpected
Consequences: An Empirical Analysis of Consumer Understanding
of Arbitration Agreements, 75 Md. L. Rev. 1, 63 (2015). Another
study by the Consumer Financial Protection Bureau similarly
concluded that a majority of credit-card consumers whose
agreements contained arbitration clauses did not understand that
they could not file suit in court. Consumer Fin. Prot. Bureau,
Arbitration Study Report to Congress, Pursuant to Dodd-Frank
Wall Street Reform and Consumer Protection Act § 1028(a), § 3 at
3 (2015),
http://files.consumerfinance.gov/f/201503_cfpb_arbitration-
study-report-to-congress-2015.pdf.

                                23
Atalese, supra, 219 N.J. at 443-44, 447 (collecting non-

arbitration-clause cases requiring clear and unambiguous

contractual language to achieve waiver of rights).

    No magical language is required to accomplish a waiver of

rights in an arbitration agreement.     Our courts have upheld

arbitration clauses that have explained in various simple ways

“that arbitration is a waiver of the right to bring suit in a

judicial forum.”    Id. at 444.   See Martindale v. Sandvik, Inc.,

173 N.J. 76, 81-82 (2002) (upholding arbitration clause stating

that “all disputes relating to [the party’s] employment . . .

shall be decided by an arbitrator” and that party “waiv[ed]

[her] right to a jury trial”); Curtis v. Cellco P’ship, 413 N.J.

Super. 26, 31, 33 (App. Div.), certif. denied, 203 N.J. 94

(2010) (upholding arbitration agreement, which stated that

parties “agree to settle disputes . . . only by arbitration” and

not by “suing in court” and explained that “rules in arbitration

are different,” “no judge or jury” is present, and “review is

limited”); Griffin v. Burlington Volkswagen, Inc., 411 N.J.

Super. 515, 518, 520 (App. Div. 2010) (enforcing arbitration

clause stating that parties, by agreeing to arbitration, waived

“their rights to maintain other available resolution processes,

such as a court action or administrative proceeding, to settle

their disputes”).

                                  D.

                                  24
     The Sanford Brown enrollment agreement and arbitration

provision do not explain, in broadly worded language or any

other manner, that plaintiffs are waiving their right to seek

relief in court for a breach of the enrollment agreement or for

a statutory violation.   See Atalese, supra, 219 N.J. at 446.

The Sanford Brown enrollment agreement, moreover, is not

“written in plain language that would be clear and

understandable to the average consumer that she is” giving up

the right to pursue relief in a judicial forum.   Ibid.    New

Jersey law requires that “a consumer contract . . . be written

in a simple, clear, understandable and easily readable way.”

N.J.S.A. 56:12-2.8

8 In judging whether a consumer contract meets this standard,
courts must “take into consideration the guidelines set forth in
[N.J.S.A. 56:12-10].” N.J.S.A. 56:12-2. N.J.S.A. 56:12-10, in
part, provides:

          a.   To insure that a consumer contract shall
          be simple, clear, understandable and easily
          readable, the following are examples of
          guidelines that a court . . . may consider in
          determining whether a consumer contract as a
          whole complies with this act:
               (1) Cross     references      that    are
               confusing;
               (2) Sentences that are of greater length
               than necessary;
               (3) Sentences    that    contain   double
               negatives and exceptions to exceptions;
               (4) Sentences and sections that are in
               a confusing or illogical order;
               (5) The use of words with obsolete
               meanings or words that differ in their
               legal meaning from their common ordinary

                                25
    The body of the Sanford Brown enrollment agreement is in

nine-point font, including the more than 750-word arbitration

clause set forth in thirty-five unbroken lines, as reproduced

earlier in this opinion.   The best that can be said about the

arbitration provision is that it is as difficult to read as

other parts of the enrollment agreement.

    In conclusion, the arbitration provision and purported

delegation clause do not meet the requirements of First Options

and Atalese and do not satisfy the elements necessary for the

formation of a contract, and therefore are unenforceable.

                                V.

    We note that, here, the Appellate Division opinion was

internally inconsistent.   If the panel correctly found that the

              meaning;
              (6) Frequent use of Old English and
              Middle English words and Latin and French
              phrases.
         b.   The following are examples of guidelines
         that a court . . . may consider in determining
         whether the consumer contract as a whole
         complies with this act:
              (1) Sections shall be logically divided
              and captioned;
              (2) A table of contents or alphabetical
              index shall be used for all contracts
              with more than 3,000 words;
              (3) Conditions and exceptions to the
              main promise of the agreement shall be
              given equal prominence with the main
              promise, and shall be in at least 10
              point type.

                                26
enrollment agreement delegated the arbitrability of disputes to

the arbitrator, then an arbitrator should have determined

whether those disputes were to be resolved in an arbitral or

judicial forum.   By ruling on the validity of the arbitration

provision’s treble damages clause and finding that it conflicted

with the Consumer Fraud Act -- however correct that may be --

the panel exercised a power that it declared resided in the

arbitrator in the first instance.       Nevertheless, for the reasons

already expressed, we disagree with the Appellate Division’s

conclusion that the arbitration provision contained a clear and

unmistakable delegation clause.

                                  VI.

    We offer some advice that may avoid in the future the kind

of litigation that has spurred this case.       A party seeking to

enforce a delegation clause in an arbitration agreement should

make clear to the motion court that the decision whether the

parties agreed to arbitration resides with the arbitrator, not

the court.

    The party opposing enforcement of the arbitration agreement

must lodge a specific challenge to the delegation clause.      The

failure to do so will require that the issue of arbitrability be

determined by the arbitrator.

                                VII.

    In summary, the arbitration provision and purported

                                  27
delegation clause in Sanford Brown’s enrollment agreement failed

to explain in some sufficiently broad way or otherwise that

arbitration was a substitute for having disputes and legal

claims resolved before a judge or jury.     This minimal knowledge

of the meaning of arbitration was necessary for the student

plaintiffs to give informed assent to arbitration and to waive

their rights to pursue relief in a judicial forum.      Without such

assent, an arbitration agreement was not formed under New Jersey

law.

       The arbitration provision did not clearly and unmistakably

delegate arbitrability to the arbitrator.     Plaintiffs cannot be

faulted for not objecting to an inadequately limned delegation

clause that, in addition, did not define arbitration as a

substitute for a judicial forum.      We hold that the arbitration

agreement is unenforceable.   We therefore reverse the judgment

of the Appellate Division and remand to the trial court for

proceedings consistent with this opinion.

                                 28
                            ADDENDUM

    The arbitration provision included in Sanford Brown’s

enrollment agreement states in full:

         Agreement to Arbitrate -- Any disputes,
         claims, or controversies between the parties
         to this Enrollment Agreement arising out of or
         relating to (i) this Enrollment Agreement;
         (ii) the Student’s recruitment, enrollment,
         attendance, or education; (iii) financial aid
         or career service assistance by SBI; (iv) any
         claim, no matter how described, pleaded or
         styled, relating, in any manner, to any act or
         omission regarding the Student’s relationship
         with SBI, its employees, or with externship
         sites or their employees; or (v) any objection
         to arbitrability or the existence, scope,
         validity, construction, or enforceability of
         this Arbitration Agreement shall be resolved
         pursuant to this paragraph (the “Arbitration
         Agreement”). Choice of Arbitration Provider
         and Arbitration Rules -- Unless the parties
         agree to an alternative, the arbitration shall
         be administered by the American Arbitration
         Association    (“AAA”)    or    the    National
         Arbitration Forum (“NAF”).     The arbitration
         shall be before a single arbitrator.         If
         brought before the AAA, the AAA’s Commercial
         Arbitration     Rules,      and      applicable
         supplementary rules and procedures of the AAA,
         in effect at the time the arbitration is
         brought, shall be applied. If brought before
         the NAF, the NAF’s Code of Procedure in effect
         at the time the arbitration is brought shall
         be applied. Copies of the AAA’s Rules or the
         NAF’s Code may be obtained from SBI’s Campus
         President. Information about the arbitration
         process also can be obtained from: AAA at
         www.adr.org   or   1-800-778-7879;     NAF   at
         www.arbforum.com or 1-952-516-6400 or toll-
         free   at   1-800-474-2371.       Location   of
         arbitration -- All in-person hearings and
         conferences in the arbitration shall take
         place in a locale near SBI unless the Student
         and SBI agree otherwise.      Language -- The

                               29
language of the arbitration shall be in
English.   Any party desiring or requiring a
different language shall bear the expense of
an interpreter.      Choice of Law -- The
arbitrator shall apply federal law to the
fullest extent possible, and the substantive
and procedural provisions of the Federal
Arbitration Act (9 U.S.C. §§ 1-16) shall
govern this Arbitration Agreement and any and
all issues relating to the enforcement of the
Arbitration Agreement and the arbitrability of
claims between parties.     Costs, fees, and
expenses of arbitration -- Each party shall
bear the expense of its own counsel, experts,
witnesses, and preparation and presentation of
proofs.     All fees and expenses of the
arbitrator   and   administrative   fees   and
expenses of the arbitration shall be borne
equally by the parties unless otherwise
provided by the rules of the AAA or the NAF
governing the proceeding, or by specific
ruling by the arbitrator, or by agreement of
the parties.     Relief and Remedies -- The
arbitrator shall have the authority to award
monetary damages and may grant any non-
monetary remedy or relief available by
applicable law and rules of the arbitration
forum governing the proceeding and within the
scope of this Enrollment Agreement.        The
arbitrator will have no authority to alter any
grade given to the Student or to require SBI
to change any of its policies or procedures.
The arbitrator will have no authority to award
consequential   damages,   indirect   damages,
treble damages or punitive damages, or any
monetary   damages   not   measured   by   the
prevailing party’s economic damages.       The
arbitrator will have no authority to award
attorney’s fees except as expressly provided
by this Enrollment Agreement or authorized by
law or the rules of the arbitration forum.
Class and consolidated actions -- There shall
be no right or authority for any claims within
the scope of this Arbitration Agreement to be
arbitrated or litigated on a class basis or
for the claims of more than one Student to be
arbitrated    or    litigated    jointly    or

                     30
         consolidated with any other Student’s claims.
         Arbitrator’s Award -- At the request of either
         party, the arbitrator shall render a written
         award briefly setting forth his or her
         essential findings and conclusions. Judgment
         on the award rendered by the arbitrator may be
         entered in any court having jurisdiction.
         Severability and right to waive -- If any part
         or parts of this Arbitration Agreement are
         found to be invalid or unenforceable by a
         decision   of   a   tribunal    of   competent
         jurisdiction, then such specific part or parts
         shall be of no force and effect and shall be
         severed, but the remainder of this Arbitration
         Agreement shall continue in full force and
         effect.   Any or all of the limitations set
         forth in this Arbitration Agreement may be
         specifically waived by the party against whom
         the claim is asserted. Such waiver shall not
         waive or effect any other portion of this
         Arbitration Agreement. Survival of provisions
         of   this  agreement   --   This   Arbitration
         Agreement will survive the termination of the
         Student’s relationship with SBI.

     CHIEF JUSTICE RABNER, JUSTICES LaVECCHIA and SOLOMON, and
JUDGE CUFF (temporarily assigned), join in JUSTICE ALBIN’s
opinion. JUSTICE PATTERSON filed a separate, dissenting opinion.
JUSTICE FERNANDEZ-VINA did not participate.

                               31
                                       SUPREME COURT OF NEW JERSEY
                                         A-31 September Term 2014
                                                  075074

ANNEMARIE MORGAN and TIFFANY
DEVER,

    Plaintiffs-Appellants,

         v.

SANFORD BROWN INSTITUTE,
CAREER EDUCATION CORPORATION,
INC.,

    Defendants-Respondents,

         and

MATTHEW DIACONT, GREG LNU,
SALVATORE COSTA, JANET YOUNG,
and KRISTA HOLDEN,

    Defendants.

    JUSTICE PATTERSON, dissenting.

    If this appeal were to entail nothing more than an

application of the state law contract principles set forth in

Atalese v. U.S. Legal Services Group, 219 N.J. 430, 436 (2014),

cert. denied, __ U.S. __, 135 S. Ct. 2804, 192 L. Ed. 2d 847

(2015), I would join the majority.   In my view, that

determination would be a simple one; the arbitration clause in

dispute would not meet the standard that this Court articulated

in Atalese.

                                1
    This appeal, however, does not turn on an application of

state contract law.   Instead, it raises a discrete procedural

question:   whether plaintiffs preserved or waived their argument

that the parties’ arbitration agreement did not clearly and

unmistakably assign to an arbitrator, rather than a court, the

authority to decide whether the parties’ dispute is arbitrable.

That question is governed not by state law, but by federal law.

In Rent-A-Center, W., Inc. v. Jackson, the United States Supreme

Court held that an appellate court may entertain a challenge to

a provision of an arbitration agreement that purports to assign

questions of arbitrability to an arbitrator, only if the

challenge to that provision was asserted before the trial court.

561 U.S. 63, 74-76, 130 S. Ct. 2772, 2780-81, 177 L. Ed. 2d 403,

414-15 (2010).   On this issue of federal law, the United States

Supreme Court’s decision is binding on this Court.

    As the majority concedes, plaintiffs did not interpose a

challenge to the provision relied upon by defendants before the

trial court in this case.   Ante at ___ (slip op. at 21, 28).

Indeed, they made no such contention before the Appellate

Division, or in their petition for certification to this Court.

In my view, that undisputed procedural history resolves this

appeal under Rent-A-Center.

    The majority offers two arguments as to why plaintiffs’

failure to challenge the delegation provision before the trial

                                 2
court should not defeat their claims.   First, the majority

posits that under Rent-A-Center, a plaintiff need only challenge

a delegation provision before the trial court if that provision

contains “clear and unmistakable language evidencing an

agreement to delegate arbitrability,” and that the language of

the parties’ contract falls short of that mark.   Ante at ___

(slip op. at 18-19).   That limitation on the procedural bar

imposed in Rent-A-Center, supra, is nowhere to be found in the

Supreme Court’s holding; indeed, it directly contravenes that

holding, as it is articulated in both Justice Scalia’s majority

opinion and Justice Stevens’ dissent.   See 561 U.S. at 72, 130
S. Ct. at 2779, 177 L. Ed. 2d at 413; id. at 76, 130 S. Ct. at

2781, 177 L. Ed. 2d at 415 (Stevens, J., dissenting).     Moreover,

the limitation postulated by the majority is inherently

illogical; it would require an appellate court to determine the

ultimate merits of a challenge to a delegation provision in

order to decide whether or not the plaintiff’s failure to assert

that challenge before the trial court results in a waiver.     In

my view, our role is not to reformulate the holding of Rent-A-

Center for purposes of this case, but to apply it.   I am,

therefore, unpersuaded by the majority’s argument.

    Second, the majority unaccountably contends that

defendants’ counsel failed to assert before the motion court

defendants’ claim that under the parties’ arbitration agreement,

                                3
questions of arbitrability were delegated to an arbitrator, not

to the court.    That assertion is simply inaccurate.   In their

briefs to the trial court in support of their motion to compel

arbitration, defendants set forth the relevant portions of the

arbitration agreement, including the provision purporting to

demonstrate the parties’ agreement to arbitrate issues of

arbitrability.     Moreover, during oral argument before the trial

court, defendants’ counsel not only argued that the provision in

dispute mandated that an arbitrator decide the question of

arbitrability, but read the language of that provision to the

court.    Defendants’ counsel also asked the court to refrain from

deciding any issue in the case, including the issue of

arbitrability.     Neither plaintiff nor amicus curiae New Jersey

Association for Justice (NJAJ) has ever suggested that

defendants failed to raise the relevant issue before the trial

court, and the record belies any such suggestion.

    I concur with many of the contract principles articulated

by the majority.     In the procedural setting of this case,

however, I cannot reconcile the majority’s reasoning with the

United States Supreme Court’s decision in Rent-A-Center.       In my

view, the Appellate Division properly determined that an

arbitrator, not a court, should decide the merits of plaintiffs’

claims.    Accordingly, I would affirm the judgment of the

Appellate Division, and I respectfully dissent.

                                   4
                                I.

    This case is governed by the Federal Arbitration Act (FAA),

9 U.S.C.A. §§ 1-16, enacted “to abrogate the then-existing

common law rule disfavoring arbitration agreements ‘and to place

arbitration agreements upon the same footing as other

contracts.’”   Martindale v. Sandvik, Inc., 173 N.J. 76, 84

(2002) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500
U.S. 20, 24, 111 S. Ct. 1647, 1651, 114 L. Ed. 2d 26, 36

(1991)).   The FAA, and the federal case law that construes it,

preempt any state law that would invalidate an arbitration

agreement in a contract affecting interstate commerce.     See 9

U.S.C.A. § 2 (asserting enforceability of arbitration provisions

in “contract[s] evidencing . . . transaction[s] involving

commerce”); Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,

460 U.S. 1, 24, 103 S. Ct. 927, 941, 74 L. Ed. 2d 765, 785

(1983) (“The effect of . . . [S]ection [2] is to create a body

of federal substantive law of arbitrability, applicable to any

arbitration agreement within the coverage of the [FAA].”); Young

v. Prudential Ins. Co. of Am., 297 N.J. Super. 605, 616 (App.

Div.) (“The FAA preempts any state law purporting to invalidate

an arbitration agreement involving interstate commerce.”),

certif. denied, 149 N.J. 408 (1997).   Thus, federal law, not

state law, controls the question raised in this appeal.

                                 5
    Under the FAA, a contract provision providing for

arbitration of controversies between the parties “shall be

valid, irrevocable, and enforceable, save upon such grounds as

exist at law or in equity for the revocation of any contract.”

9 U.S.C.A. § 2.   The FAA sets forth procedures for the

determination of arbitrability mandated by 9 U.S.C.A. § 2:

         A party aggrieved by the alleged failure,
         neglect, or refusal of another to arbitrate
         under a written agreement for arbitration may
         petition any United States district court . .
         . for an order directing that such arbitration
         proceed in the manner provided for in such
         agreement. . . .    The court shall hear the
         parties, and upon being satisfied that the
         making of the agreement for arbitration or the
         failure to comply therewith is not in issue,
         the court shall make an order directing the
         parties   to   proceed   to   arbitration   in
         accordance with the terms of the agreement.

         [9 U.S.C.A. § 4.]

    As a general principle, whether the parties have agreed at

all to submit their dispute to arbitration “is typically an

‘issue for judicial determination.’”   Granite Rock Co. v. Int’l

Bhd. of Teamsters, 561 U.S. 287, 296, 130 S. Ct. 2847, 2855, 177
L. Ed. 2d 567, 576 (2010) (quoting Howsam v. Dean Witter

Reynolds, Inc., 537 U.S. 79, 83, 123 S. Ct. 588, 591, 154 L. Ed.
2d 491, 497 (2002)); see also Prima Paint Corp. v. Flood &

Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S. Ct. 1801, 1806, 18
L. Ed. 2d 1270, 1277 (1967) (holding “if the claim . . . goes to

                                 6
the ‘making’ of the agreement to arbitrate[,] . . . the . . .

court may proceed to adjudicate it”).

    That principle was applied by the United States Supreme

Court in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,

944-45, 115 S. Ct. 1920, 1924, 131 L. Ed. 2d 985, 994 (1995).

In First Options, the party seeking a ruling that the question

of arbitrability should be referred to an arbitrator, instead of

a court, did not point to any language in the parties’ agreement

that delegated the question of arbitrability to the arbitrator;

instead, it relied on the opposing party’s conduct in having

argued the question of arbitrability before the arbitrator.     514

U.S. at 946, 115 S. Ct. at 1925, 131 L. Ed. 2d at 994.    The

Supreme Court rejected the claim that the parties’ conduct

evinced an intent that an arbitrator determine whether their

underlying dispute was arbitrable.    Id. at 946-47, 115 S. Ct. at

1925-26, 131 L. Ed. 2d at 994-95.    In language cited by the

majority in this appeal, the Supreme Court held:

         When deciding whether the parties agreed to
         arbitrate   a   certain    matter   (including
         arbitrability), courts generally (though with
         a qualification we discuss below) should apply
         ordinary state-law principles that govern the
         formation of contracts. . . . The relevant
         state law here, for example, would require the
         court to see whether the parties objectively
         revealed an intent to submit the arbitrability
         issue to arbitration.

         [Id. at 944, 115 S. Ct. at 1924, 131 L. Ed. 2d
         at 993 (citations omitted).]

                                7
       The “important qualification” identified in First Options

applies “when courts decide whether a party has agreed that

arbitrators should decide arbitrability.”       Ibid.   In contrast to

its recognition of a presumption in favor of arbitration that

generally governs the merits of the arbitrability issue, the

United States Supreme Court held that “[c]ourts should not

assume that the parties agreed to arbitrate arbitrability unless

there is ‘clea[r] and unmistakabl[e]’ evidence that they did

so.”   Ibid. (alteration in original) (quoting AT&T Techs., Inc.

v. Communs. Workers of Am., 475 U.S. 643, 649, 106 S. Ct. 1415,

1418, 89 L. Ed. 2d 648, 656 (1986)).

       The Supreme Court’s decision in First Options provides the

backdrop to the decision most directly relevant to this appeal,

Rent-A-Center.   There, in contrast to the setting of First

Options, the defendant cited language in the arbitration

agreement that, it claimed, assigned the question of

arbitrability to an arbitrator.       Rent-A-Center, supra, 561 U.S.

at 65-66, 130 S. Ct. at 2775, 177 L. Ed. 2d at 408-09.       Before

the trial court, the plaintiff challenged the arbitration

agreement on the grounds that it was unconscionable, but did not

dispute the import of the provision on which the defendant

relied.   Id. at 72-73, 130 S. Ct. at 2779-80, 177 L. Ed. 2d at

413.   Reversing the district court’s determination that the

                                  8
parties’ dispute was arbitrable, the Court of Appeals for the

Ninth Circuit held that notwithstanding a contractual provision

that assigns the question of arbitrability to the arbitrator,

the plaintiff’s claim of unconscionability should be determined

by the court.   Jackson v. Rent-A-Center, W., Inc., 581 F.3d 912,

918-19 (9th Cir. 2009), rev’d, 561 U.S. at 76, 130 S. Ct. at

2781, 177 L. Ed. 2d at 415 (2010).

     In a five-to-four decision, the Supreme Court reversed the

Ninth Circuit’s determination.   Rent-A-Center, supra, 561 U.S.

at 76, 130 S. Ct. at 2781, 177 L. Ed. 2d at 415.    Writing for

the majority, Justice Scalia construed the arbitrability

provision at issue -– termed the “delegation provision” by the

parties -– to be a separate, distinct agreement, severable from

the remainder of the parties’ contract.     Id. at 71-72, 130 S.

Ct. at 2778-79, 177 L. Ed. 2d at 412-13.9    In light of that

conclusion, the Supreme Court majority stated the holding that,

in my view, determines this appeal.   It held that, unless the

plaintiff “challenged the delegation provision specifically, we

1 Responding to Justice Stevens’ disagreement with the majority’s
view on the question of severability, Justice Scalia stated that
“[t]he issue of the agreement’s ‘validity’ is different from the
issue whether any agreement between the parties ‘was ever
concluded,’ and . . . we address only the former.” Rent-A-
Center, supra, 561 U.S. at 70 n.2, 130 S. Ct. at 2778 n.2, 177
L. Ed. 2d at 412 n.2 (quoting Buckeye Check Cashing, Inc. v.
Cardegna, 546 U.S. 440, 444 n.1, 126 S. Ct. 1204, 1208 n.1, 163
L. Ed. 2d 1038, 1043 n.1 (2006)).
                                 9
must treat it as valid under [9 U.S.C.A.] § 2, and must enforce

it under [9 U.S.C.A.] §§ 3 and 4, leaving any challenge to the

validity of the Agreement as a whole for the arbitrator.”       Id.

at 72, 130 S. Ct. at 2779, 177 L. Ed. 2d at 413.    The Court

stated that although the plaintiff had generally attacked the

arbitration provision as “procedurally and substantively

unconscionable,” he had asserted no challenge “specific to the

delegation provision.”   Id. at 73-74, 130 S. Ct. at 2780, 177 L.

Ed. 2d at 413-14.   The Supreme Court noted that, in the

proceedings before it, the plaintiff contended for the first

time that “that the delegation provision itself is substantively

unconscionable” because he received no “quid pro quo” for his

agreement, but dismissed that argument, holding that the

plaintiff had “brought this challenge to the delegation

provision too late, and we will not consider it.”   Id. at 75-76,
130 S. Ct. at 2781, 177 L. Ed. 2d at 415.

    Justice Stevens, writing for the dissenting justices,

pointedly criticized the majority’s holding.   Observing that

neither party had urged the Court to adopt a waiver rule,

Justice Stevens articulated that holding as follows:

         Neither petitioner nor respondent has urged us
         to adopt the rule the Court does today: Even
         when a litigant has specifically challenged
         the validity of an agreement to arbitrate he
         must submit that challenge to the arbitrator
         unless he has lodged an objection to the
         particular line in the agreement that purports

                                10
         to assign such challenges to the arbitrator -
         - the so-called “delegation clause.”

         [Id. at 76, 130 S. Ct. at 2781, 177 L. Ed. 2d
         at 415 (Stevens, J., dissenting) (emphasis in
         original).]

    Justice Stevens asserted that the Supreme Court majority

could have resolved the issue in favor of the plaintiff by

applying the First Options standard –- whether the arbitration

agreement “clearly and unmistakably” expressed the parties’

intent to submit questions of arbitrability to the arbitrator.

Id. at 80, 130 S. Ct. at 2784, 177 L. Ed. 2d at 418.   He noted

that under Prima Paint, a challenge to the legality of an

arbitration agreement would be determined by the arbitrator, so

long as that challenge was based on “some reason unrelated to

the arbitration provision.”   Id. at 86, 130 S. Ct. at 2787, 177
L. Ed. 2d at 421-22.   Justice Stevens rejected the majority

opinion as an unwarranted and unduly exacting extension of the

Court’s prior holding in Prima Paint:

         Before today, however, if respondent instead
         raised a challenge specific to “the validity
         of the agreement to arbitrate” -- for example,
         that the agreement to arbitrate was void under
         state law -- the challenge would have gone to
         the court. . . . But the Court now declares
         that Prima Paint’s pleading rule requires
         more:   A party must lodge a challenge with
         even greater specificity than what would have
         satisfied the Prima Paint Court. A claim that
         an entire arbitration agreement is invalid
         will not go to the court unless the party
         challenges the particular sentences that
         delegate such claims to the arbitrator, on

                                11
         some contract ground that is particular and
         unique to those sentences.

         [Ibid. (citing Buckeye, supra, 546 U.S. at
         444, 126 S. Ct. at 1208, 163 L. Ed. 2d at
         1042-43) (emphasis in original).]

    Thus, although they sharply disputed the wisdom of the rule

stated in Rent-A-Center, the Supreme Court majority and

dissenting opinions concurred on the scope of that rule.

Compare id. at 72, 130 S. Ct. at 2779, 177 L. Ed. 2d at 413,

with id. at 76, 130 S. Ct. at 2781, 177 L. Ed. 2d at 415

(Stevens, J., dissenting).    If a party does not specifically

challenge, before the trial court, a provision in an arbitration

agreement that purports to assign the question of arbitrability

to an arbitrator, that challenge is deemed by the appellate

court to be waived, and the arbitration agreement is enforced

under Section 2 of the FAA.   See id. at 75-76, 130 S. Ct. at

2781, 177 L. Ed. 2d at 415.

    Importantly, the party who did not assert a challenge

before the trial court does not forego his or her right to

challenge the arbitrability of the dispute.    See id. at 71, 130

S. Ct. at 2778, 177 L. Ed. 2d at 412 (indicating that although

court will not intervene, dispute will be resolved by

arbitrator).   However, he or she must dispute that issue before

the arbitrator, not the court.   Ibid.   The arbitrator then

determines whether the parties entered into an agreement to

                                 12
arbitrate, as a matter of state contract law.     See First

Options, supra, 514 U.S. at 944, 115 S. Ct. at 1924, 131 L. Ed.
2d at 993.   Thus, the state law contract principles invoked by

the majority in this case will play a dispositive role, whether

or not an application of Rent-A-Center mandates that an

arbitrator, rather than a court, determine the dispute over

arbitrability.   See, e.g., Apache Bohai Corp. LDC v. Texaco

China BV, 480 F.3d 397, 408 n.13 (5th Cir. 2007) (“Arbitrators

‘should apply the basic principles of contract law to which the

parties have referred’ in their choice of law clause.”

(citation omitted)); Delta Funding Corp. v. Harris, 466 F.3d
273, 274 (3d Cir. 2006) (highlighting “identified general

principles of New Jersey contract law that . . . arbitrator[s]

can apply to the agreement[s]”); Solvay Pharms., Inc. v. Duramed

Pharms., Inc., 442 F.3d 471, 485 (6th Cir. 2006) (acknowledging

“[state] contract law governs how the arbitrators should have

constructed the documents”).

    I respectfully submit that the Supreme Court’s decision in

Rent-A-Center compels the conclusion reached by the Appellate

Division in this case:   that the question of arbitrability must

be decided by an arbitrator.    As the majority necessarily

acknowledges, plaintiffs did not challenge before the trial

court the contract language that defendants invoked on the

question of arbitrability.     Ante at ___ (slip op. at 21, 28).

                                  13
Plaintiffs’ theories at that stage were entirely distinct from a

challenge to the arbitrability language on which defendants

relied.   They argued that defendants had failed to disclose the

two pages on which the arbitration agreement appeared to

plaintiffs before they signed their agreement, and that the

arbitration agreement as a whole was void as inconsistent with

public policy and New Jersey law, specifically the Consumer

Fraud Act (CFA), N.J.S.A. 56:8-1 to -200, and principles of

equity.   Plaintiffs made essentially the same contentions before

the Appellate Division and this Court, contesting the

application of federal law to this case.10

     Accordingly, under the rule stated by the United States

Supreme Court in Rent-A-Center, plaintiffs clearly waived their

challenge to the delegation provision, and the question of

arbitrability should be determined by an arbitrator, applying

principles of New Jersey contract law.

                                II.

     The majority posits two arguments in support of its

conclusion that notwithstanding Rent-A-Center, plaintiffs’

challenge to the delegation provision was preserved.    First, the

majority narrows the Rent-A-Center test to find a waiver only if

2 It appears that it was amicus curiae NJAJ, not plaintiffs, that
first raised the contention adopted by the majority here -- that
the arbitrability provision was not clear and unmistakable, and
was therefore unenforceable under First Options and Atalese.
                                14
the disputed language in the arbitration agreement is found to

be clear and unmistakable.    Ante at ___ (slip op. at 18-19).

Second, the majority claims that defendants failed to assert,

before the trial judge, that the question of arbitrability

should be sent to an arbitrator.      Ante at ___ (slip op. at 3, 8,

20-21).   For the reasons that follow, I find both arguments

meritless.

    Faced with the undisputed fact that plaintiffs did not do

what Rent-A-Center required them to do to preserve their

challenge for appeal, the majority contends that the rule stated

in Rent-A-Center does not extend to this case.      See ante at ___

(slip op. at 18-21).    Without citation to Rent-A-Center, the

majority states that the Supreme Court “presupposed a clearly

identifiable delegation clause that would be apparent to the

parties.”    Ante at ___ (slip op. at 18).    It reasons that

because the delegation provision in Rent-A-Center met the “clear

and unmistakable” standard of First Options, whereas the

disputed provision in this case does not, the Rent-A-Center

waiver rule does not govern this case.       Ante at ___ (slip op. at

18-21).

    That argument plainly misstates the United States Supreme

Court’s holding, which includes none of the limiting language

that the majority postulates.    The rule of Rent-A-Center is not

restricted to cases involving contract language that is

                                 15
ultimately found to meet the “clear and unmistakable” standard

of First Options, as the disputed language in Rent-A-Center did.

Instead, the Supreme Court majority stated that, unless the

plaintiff “challenged the delegation provision specifically”

before the trial court that provision is treated as valid under

Section 2 of the FAA.   Rent-A-Center, supra, 561 U.S. at 72, 130
S. Ct. at 2779, 177 L. Ed. 2d at 413.11   It offered no caveats or

exceptions to that general rule.

     That conclusion is underscored by Justice Stevens’ vigorous

dissent.   In his critique of the United States Supreme Court

majority’s holding, Justice Stevens did not characterize that

holding to require waiver only in the event that the

arbitrability provision “clearly and unmistakably” assigns the

dispute to an arbitrator.   See Rent-A-Center, supra, 561 U.S. at

3 In an effort to distinguish Rent-A-Center, the majority
characterizes the issue raised by plaintiffs before the trial
court to be “whether the parties formed a contract -- that is,
whether the parties concluded an agreement,” whereas “the
primary issue in Rent-A-Center dealt with the validity of an
employment contract that the plaintiff claimed was
unconscionable.” Ante at ___ (slip op. at 19) (emphasis in
original). In fact, as the majority acknowledges elsewhere in
its opinion, plaintiffs contended before the trial court that
“the arbitration provision was unconscionable and therefore void
because its terms were at odds with the [CFA]’s allowance of
treble damages and attorney’s fees.” Ante at ___ (slip op. at
9). Plaintiffs’ challenge to the arbitration provision as
contrary to New Jersey law and public policy is, like the
unconscionability argument raised in Rent-A-Center, supra, a
challenge to the validity of the contract, not its formation.
See 561 U.S. at 66, 130 S. Ct. at 2775, 177 L. Ed. 2d at 409.
                                16
76, 130 S. Ct. at 2781, 177 L. Ed. 2d at 415 (Stevens, J.,

dissenting).   On the contrary, Justice Stevens faulted the

majority for requiring “an objection to the particular line in

the agreement that purports to assign such challenges to the

arbitrator -- the so-called ‘delegation clause.’”   Ibid.

(emphasis added).   Clearly, Justice Stevens viewed the majority

opinion to require a challenge before the trial court of any

delegation clause that “purports” to assign the issue of

arbitrability to the arbitrator –- whether the provision is

ultimately found to be clear or ambiguous, enforceable or void.

Ibid.   Accordingly, the majority and dissenting opinions agreed

on the scope of the Rent-A-Center rule:   it applies to all

disputed clauses that purport to assign the arbitrability

question to an arbitrator, not only to those that are ultimately

vindicated as “clear and unmistakable.”   See id. at 72, 130 S.

Ct. at 2779, 177 L. Ed. 2d at 413; id. at 76, 130 S. Ct. at

2781, 177 L. Ed. 2d at 415 (Stevens, J., dissenting).   Thus, I

respectfully submit, the majority in this appeal has simply

misstated the Supreme Court’s holding.

    Indeed, by virtue of the limitation on the Rent-A-Center

holding suggested by the majority, the question of waiver would

turn on the ultimate merits of the appeal.   If, as here, a party

does not challenge a delegation provision at trial, but that

issue is contested before an appellate court, the majority would

                                17
find a waiver only if the provision were found to be “clear and

unmistakable.”    Ante at ___ (slip op. at 18-19).   That crucial

determination would not be made by an arbitrator, because no

arbitrator would yet be involved in the case.     It would not be

made by the trial judge, before whom no challenge had been

asserted.    It is the appellate court that would, in the first

instance, decide the dispositive issue in the case, in order to

determine whether the absence of a challenge before the trial

court effected a waiver of that challenge on appeal.     The

ultimate merits of the challenge would drive the question of

waiver:     if the appellate court agreed that the provision is

unclear, then a party’s failure to raise the issue would have no

consequence; if not, the appellate court would find that the

party had waived the challenge.     I respectfully submit that the

majority’s proposed rule invites an appellate court to place the

proverbial cart before the horse, and to apply a substantive,

merits-based test to the procedural question of waiver.

    The majority’s second contention -- that defendants failed

to assert before the trial court that questions of arbitrability

should be assigned to the arbitrator –- is no more persuasive.

Ante at ___ (slip op. at 3, 8, 20-21).     Neither plaintiff nor

amicus curiae NJAJ ever contended that defendants had failed to

raise the delegation provision in the trial court –- and for

good reason.     In their brief in support of their motion to

                                  18
compel arbitration, defendants provided the relevant portions of

the arbitration agreement, including a reprint of subsection

(v), the provision which directs that “any objection to

arbitrability” be resolved by an arbitrator.   Further,

defendants’ reply brief to the trial court specifically

highlights that “[plaintiffs’] attack on the Enrollment

Agreements is a non-starter because, as the Supreme Court held

in [Prima Paint], attacks on the contract containing an

arbitration provision are for the arbitrator -– not the court -–

to decide.”   Defendants argued that although plaintiffs have

challenged the validity of the Enrollment Agreements, they have

not specifically objected to the parties’ agreement that

arbitrability issues be decided by an arbitrator.

    Moreover, at the hearing on defendants’ motion to compel

arbitration, defense counsel clearly argued before the motion

court that any dispute, including arbitrability, is for the

arbitrator to decide.   The transcript of that hearing includes

the following statements by defendants’ counsel:

         The second point is the arguments that they
         are making are arguments that need to be
         directed towards the arbitrator, not Your
         Honor, because the arguments that they make,
         they bring up fraud, they bring up duress in
         a conclusory manner, these are arguments that
         are attacking the arbitration agreement -–
         that are attacking the contract as a whole,
         and under federal law, under New Jersey law,
         which follows the same principle, when you are
         raising an argument that attacks the entire

                                19
         agreement, those are arguments that must be
         advanced to the arbitrator after the matter
         has been compelled into arbitration.      And
         indeed when you look at the scope of this
         agreement   it   covers  any   objection   to
         arbitrability, or the existence, scope,
         validity, construction or enforceability of
         this arbitration agreement shall be resolved
         pursuant to this paragraph, so very broadly
         channels disputes like those that have been
         raised by the plaintiffs in this case for the
         arbitrator to decide.

    With those words, defendants’ attorney alerted the court to

his clients’ position that the parties’ arbitration agreement

contained a clause that assigned all issues involving

“arbitrability,” as well as the “existence, scope, validity,

construction or enforceability” of the agreement, to the

arbitrator.    Defendants’ counsel urged the court to “look at the

scope” of the agreement, and actually recited the relevant

portions of the agreement to the trial judge.   Our case law

properly finds issues to be preserved by virtue of assertions by

counsel that state a position much less clearly than what was

argued here.   See, e.g., State v. Arthur, 184 N.J. 307, 345-46

n.8 (2005) (Albin, J., dissenting) (arguing party’s briefs

“sufficiently touch[ing] the issue” successfully preserves

question for review); Ferreira v. Rancocas Orthopedic Assocs.,

178 N.J. 144, 165 n.3 (2003) (recognizing liberal construction

of pleadings for purposes of preserving claims); State v. Velez,

335 N.J. Super. 552, 556-58 (App. Div. 2000) (finding counsel

                                 20
raised issue of racial profiling by generally describing

practice, although he did not use term “racial profiling”).

Defendants easily satisfied the standard that has traditionally

applied to questions of waiver.

     The majority finds three deficiencies in defendants’

counsel’s presentation of the issue to the trial court.        First,

the majority emphasizes that defendants’ counsel did not use the

term “delegation clause.”   Ante at ___ (slip op. at 8).       As

confirmed by the majority and dissenting opinions in Rent-A-

Center, however, the terms “delegation clause” and “delegation

provision” were used by the parties and the Supreme Court as

convenient terminology to denote the contract language.        See

Rent-A-Center, supra, 561 U.S. at 68, 130 S. Ct. at 2777, 177 L.

Ed. 2d at 410-11; id. at 76, 82, 130 S. Ct. at 2781, 2785,
177 L. Ed. 2d at 415, 419 (Stevens, J., dissenting).12     The

Supreme Court majority stated, “[a]dopting the terminology used

by the parties, we will refer to [the disputed provision] as the

delegation provision.”   Rent-A-Center, supra, 561 U.S. at 68,
130 S. Ct. at 2777, 177 L. Ed. 2d at 410-11.   Justice Stevens

called the contract language the “so-called ‘delegation

clause.’”   Id. at 76, 130 S. Ct. at 2781, 177 L. Ed. 2d at 415.

Thus, contrary to the majority’s suggestion, the term

4 Neither term appears in the Ninth Circuit opinion.     See
generally Rent-A-Center, supra, 581 F.3d 912.
                                  21
“delegation clause” was not a term of art with independent

significance that defendants were required to invoke in order to

preserve the issue for appeal, but a shorthand label for the

disputed provision.    Defendants’ counsel, who read the entire

provision to the trial court, was not obliged to use that label

for the provision in order to preserve his clients’ argument for

appeal.

       Second, the majority finds significance in the fact that

defense counsel did not “even once cite Rent-A-Center before the

motion court.”   Ante at ___ (slip op. at 20).    It is not

surprising that defendants did not cite Rent-A-Center before the

motion court; any such citation would have been premature.     When

the parties in this case appeared before the trial court, the

waiver issue had yet to arise, and there was no reason for

defendants to cite Rent-A-Center at that stage.

       Finally, the majority contends that defendants failed to

argue before the motion court “that it lacked jurisdiction to

decide whether the parties agreed to arbitration because that

role was for the arbitrator alone.”    Ante at ___ (slip op. at

20).    The very motion made by defendants -– a motion to compel

arbitration and dismiss the complaint, or, in the alternative,

to stay the action pending arbitration -– was a challenge to the

court’s jurisdiction to decide the parties’ entire dispute,

including the arbitrability of that dispute.     When defendants’

                                 22
counsel told the motion court that plaintiffs’ contentions “are

arguments that must be advanced to the arbitrator after the

matter has been compelled into arbitration,” and that the

question of arbitrability, among other issues, was “for the

arbitrator to decide,” he was respectfully advising the trial

court that it lacked jurisdiction to resolve those issues.13

     The majority has abandoned the lenient standard that has

historically governed the question of whether an attorney has

raised an issue before the trial court, and replaced it with a

formulaic roster of specific terms that must be used by counsel

to preserve an argument for appeal.   I respectfully submit that

the majority’s new benchmark for attorneys is impractical and

unwarranted.

     In sum, I concur with the Appellate Division panel’s

conclusion that pursuant to the United States Supreme Court’s

decision in Rent-A-Center, the parties’ dispute regarding

arbitrability should be decided by an arbitrator.14   I would

5 Notwithstanding defendants’ specific request that the motion
judge refer arbitrability and other issues to the arbitrator,
the majority opines that “[d]efendants filed a motion to compel
arbitration, but did not make clear that they wanted the
arbitrator, rather than the court, to decide whether the parties
agreed to arbitration.” Ante at ___ (slip op. at 3).

6 I do not concur in the portion of the Appellate Division
panel’s opinion that analyzed the parties’ agreement,
notwithstanding the panel’s conclusion that an arbitrator should
decide the question of arbitrability.
                               23
affirm the judgment of the Appellate Division panel, and I

respectfully dissent.

                               24
                     SUPREME COURT OF NEW JERSEY

NO.   A-31                                       SEPTEMBER TERM 2014
ON CERTIFICATION FROM                   Appellate Division, Superior Court

ANNEMARIE MORGAN and TIFFANY DEVER,

      Plaintiffs-Appellants,

              v.

SANFORD BROWN INSTITUTE, CAREER
EDUCATION CORPORATION, INC.,

      Defendants-Respondents,

              and

MATTHEW DIACONT, GREG LNU,
SALVATORE COSTA, JANET YOUNG, and
KRISTA HOLDEN,

      Defendants.

DECIDED               June 14, 2016
                Chief Justice Rabner                         PRESIDING
OPINION BY          Justice Albin
CONCURRING/DISSENTING OPINION BY
DISSENTING OPINION BY           Justice Patterson

                                    REVERSE AND
 CHECKLIST                                                  DISSENT
                                      REMAND
 CHIEF JUSTICE RABNER                        X
 JUSTICE LaVECCHIA                           X
 JUSTICE ALBIN                               X
 JUSTICE PATTERSON                                              X
 JUSTICE FERNANDEZ-VINA               -----------------
 JUSTICE SOLOMON                             X
 JUDGE CUFF (t/a)                            X
 TOTALS                                      5                  1