Arbitration and confidentiality clauses have become popular contract provisions for preclusion and obstruction of potential lawsuits. While such contract provisions are legitimate mechanisms under our freedom to contract, their enforcement may simultaneously run afoul of New Mexico’s strong public policy interests in consumer protection under the Unfair Practices Act. In State ex rel. Balderas v. ITT Educational Services, Inc., the New Mexico Court of Appeals heard interlocutory appeal from the defendant seeking to use a confidentiality agreement within an arbitration provision to block discovery by the plaintiff Attorney General. The court held that enforcing the arbitration provision would be contrary to public policy considering the statutory power of the AG and the policy interests of the UPA. The court raised but did not reach the question of whether a private UPA litigant would similarly be able to void enforcement of a contract clause used to shield a defendant. This Case Comment argues that, given the legislative intent, public policy, and broad jurisprudence of the UPA, a private litigant may prevail in such a case. Such a plaintiff must navigate many considerations, but the UPA presents a positive mechanism of consumer protection to potentially void a contract provision that is contrary to public policy.
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Lionel C. Betsch,
Not Waiting for Superman: Lessons for Unfair Practices Act Litigants From State Ex Rel. Balderas V. ITT Educational Services,
N.M. L. Rev.
Available at: https://digitalrepository.unm.edu/nmlr/vol50/iss1/7