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Milberg LLP, a New York-based law firm, this week announced it has filed a class-action lawsuit against St. Louis Park, Minn.-based National Arbitration Forum Inc. for allegedly misrepresenting its independence and hiding its ties to the collection industry. The lawsuit, filed earlier this month in a California district court, includes allegations that the forum established incentives for arbitrators to favor debt collectors over consumers, disregarded consumers' evidence and creditors' lack of evidence, and failed to provide the arbitration services it promised to consumers. Forum representatives did not return calls seeking comment. Most of the arbitrations were against consumers from whom Mann Bracken LLP, also named in the lawsuit, attempted to collect alleged credit card debts on behalf of its corporate clients, according to the complaint. The forum "was a sham operation whose primary purpose was to rubber-stamp arbitration awards and confer the appearance of legitimacy upon Mann Bracken's debt-collection efforts," the complaint states. Besides restitution, attorney's fees and court costs, the plaintiffs are seeking an injunction prohibiting the forum from arbitrating disputes involving Mann Bracken or Axiant LLC, a debt collector owned in part by Mann Bracken. Other defendants named in the lawsuit include Accretive LLC, the direct owner of Axiant, and Forthright Solutions LLC, which the forum and defendant Agora Fund I GP LLC own. Accretive owns the forum and Agora. In a similar complaint, filed July 24, plaintiffs' attorneys from the Minneapolis-based Gustafson Gluek PLLC law firm charged that their client, Kerry Sydnes, was financially harmed when Sydnes lost a consumer-debt dispute arbitrated by the forum (CardLine 8/3). The suit sought class-action status for other consumers in similar situations.
