STATE OF NEW MEXICO ex rel. HECTOR BALDERAS, Attorney General, Plaintiff-Appellee,
ITT EDUCATIONAL SERVICES, INC., Defendant-Appellant.
FROM THE DISTRICT COURT OF BERNALILLO COUNTY Valerie A.
Huling, District Judge
H. Balderas, Attorney General Joseph Yar, Assistant Attorney
General Nicholas M. Sydow, Assistant Attorney General P.
Cholla Khoury, Assistant Attorney General Santa Fe, NM for
Thayer & Browne, A.P.C. Stevan Douglas Looney
Albuquerque, NM Bardacke Allison LLP Paul G. Bardacke Santa
Fe, NM Thompson Coburn LLP William R. Bay Jeffrey R. Fink St.
Louis, MO for Appellant Richard John Rubin, Assistant
Attorney General Santa Fe, NM for Amici Curiae
J. VARGAS, Judge
In this consolidated appeal, ITT Educational Services, Inc.,
d/b/a ITT Technical Institute (ITT) appeals the district
court's order denying its motion to compel arbitration,
as well as its order compelling compliance with subpoenas
served on counsel for ITT students by the Attorney General.
On appeal, ITT claims that the Attorney General is bound by
provisions in student enrollment agreements requiring that
any dispute related to a student's enrollment be
arbitrated and further requiring that any information related
to the arbitration remain confidential. We conclude that
under the specific circumstances of this case, enforcement of
the agreement to arbitrate and accompanying confidentiality
clause against the Attorney General is contrary to public
policy and we affirm.
The State of New Mexico, through its Attorney General (State)
filed suit against ITT, claiming violations of the New Mexico
Unfair Practices Act (UPA) arising out of alleged
misrepresentations to students about ITT's nursing
program and its financial aid process. ITT filed a motion to
compel arbitration, asking the district court to order the
State to arbitrate individually for each student, "all
claims seeking restitution or other relief on behalf of any
ITT students in accordance with the arbitration provision in
the students' enrollment agreements with ITT[.]"
ITT's enrollment agreement requires that "any
dispute arising out of or in any way related" to the
agreement, "including without limitation, any statutory,
tort, contract or equity claim" be resolved by binding
arbitration. ITT argued that, notwithstanding that the State
was not a party to the enrollment agreement, it was required
to arbitrate because its claims were derivative of student
claims or alternatively, were brought in a representative
capacity on behalf of students. Following a hearing, the
district court denied ITT's motion to compel arbitration.
ITT appealed the district court's denial pursuant to the
New Mexico Uniform Arbitration Act, allowing for an appeal
from an order denying a motion to compel arbitration. NMSA
1978, § 44-7A-29(a)(1) (2001).
During discovery, the State served subpoenas duces tecum on
two private attorneys (attorneys) who had each represented
ITT students in prior arbitration proceedings against ITT
conducted in accordance with the requirements of the
enrollment agreements. The subpoenas served on the attorneys
required that, for any proceeding against ITT in which they
were counsel for an ITT student, they produce the following
1. All pleadings, decisions, or verdicts, filed, entered or
issued in any arbitration proceeding involving [ITT] and ITT
students in New Mexico;
2. All written discovery, including but not limited to,
answers to interrogatories, and admissions and accompanying
requests for admissions, produced or provided by [ITT] during
arbitration between ITT and ITT students;
3. All testamentary evidence gathered or produced during
arbitration proceedings between [ITT] and [ITT] students . .
. including but not limited to, transcripts of depositions,
transcripts of hearings or the contact information of any
court reporter transcribing any hearings if the transcripts
were not delivered or provided to you, affidavits, and
4. All documents produced or provided by [ITT];
5. All documents produced or provided by your clients[.]
objected to the subpoenas pursuant to Rule 1-045(C) NMRA,
asserting that disclosure of the requested materials would
violate the confidentiality clauses of the enrollment
agreements, requiring that "[a]ll aspects of the
arbitration proceeding, and any ruling, decision or award by
the arbitrator, will be strictly confidential." ITT
instructed the ...