New York Sues Rapid Ruling: What the MCA Arbitration Lawsuit Means for Your Contract (2026)

Short answer: On June 8, 2026, New York Attorney General Letitia James sued Rapid Ruling, an online arbitration platform operated by Mediation and Civil Arbitration, Inc., and its two founders. The state alleges that Rapid Ruling marketed itself as a neutral forum while it was built with a merchant cash advance (MCA) company, ran on rules that company helped write, and ruled for funders in nearly all of its cases (press release). According to the verified petition, 2,688 of 2,760 matters through March 30, 2023 went ahead with no answer from the merchant. These are allegations, and no court has ruled on them. If your MCA agreement names Rapid Ruling, or an award or judgment against your business came from it, read the arbitration clause, write down your deadlines and talk to a New York attorney before you sign anything new.

By the Business Debt Adjusters research desk. Reviewed November 13, 2026. If you can show us a record that contradicts anything here, call (877) 817-0404 and we will correct it.

What the Attorney General filed

The case is a special proceeding in the Supreme Court of the State of New York, County of New York, brought by the People of the State of New York against Mediation and Civil Arbitration, Inc., d/b/a RapidRuling, Zachary Meyer and Andrew Sachs. The copy of the petition posted by the Attorney General carries Index No. 452192/2026 and a court filing system received date of June 9, 2026. It describes Meyer and Sachs as New York attorneys who co-founded the platform and asserts claims for fraud, deception and abusive practices under Executive Law Section 63(12) and General Business Law Section 349.

The case rests on internal emails and sworn testimony, including from the general counsel of The LCF Group, Inc., formerly Last Chance Funding, the funder the petition says helped create the platform. LCF is not a party (petition, paragraphs 2 and 7). In the press release, Attorney General James said the founders "worked in secret to stack the deck against struggling small businesses."

What Rapid Ruling is alleged to have done

According to the petition, Rapid Ruling grew out of New York's 2019 change to confessions of judgment. As amended, CPLR 3218 lets a confession of judgment be filed "only with the clerk of the county where the defendant's affidavit stated that the defendant resided" when it was signed, or where the defendant lives at filing. The petition says those amendments took effect August 30, 2019, that LCF had filed hundreds of confessions of judgment in New York, and that LCF then looked for "an online or expeditious platform" to collect from merchants outside the state. Rapid Ruling was incorporated in New York on September 27, 2019 (petition, paragraphs 10 and 53 to 55).

The petition then alleges, among other things (petition paragraphs cited in each item):

• LCF drafted and edited the arbitration rules. Its counsel sent a first draft on August 6, 2019, at least six drafts were exchanged, and the founders accepted virtually all of LCF's input (paragraphs 59 and 86 to 87).
• Meyer and Sachs were the only arbitrators from March 2020 until April 2022 and did not, as a matter of course, issue conflict disclosures (paragraphs 102 to 104).
• New arbitrators were sent one sample uncontested award and one sample contested award, both in LCF's favor, and dozens of contested awards copied the sample's analysis verbatim, many repeating its typo (paragraphs 108, 133 and 134).
• Arbitrators were paid by the hour on contested matters but a flat $50 to $75 for each uncontested case (paragraph 112).
• It was marketed at MCA industry conferences; at one in 2022 the sponsored WiFi username was "ForFastJudgmentsUse" (paragraphs 76 to 79).
• LCF filed over 2,500 arbitrations from March 2020 through March 2023, more than 90 percent of the filings in that period, each against an out-of-state merchant. It stopped using the platform in 2024, and other MCA companies replaced its business (paragraphs 67, 68 and 82).

Of 2,760 matters pending or completed as of March 30, 2023, the petition says 82 were contested and 2,688 went ahead with no answer or opposition from the merchant, nearly all ending in the funder's favor. Of the 82 contested matters, a merchant prevailed once, and only because LCF filed the wrong contract (petition, paragraphs 121, 122 and 131). The press release puts it as 97 percent of approximately 3,000 arbitrations in the first three years proceeding without a small business appearing.

In a June 20, 2022 interview with the trade publication deBanked, Meyer pitched the online model and said the platform had "a panel of six arbitrators."

The practices the Attorney General targets

The state's theory is not that arbitration is illegal. It is that Rapid Ruling told the public and the merchants it emailed that it was "neutral," "independent" and "impartial" without disclosing the LCF ties, while, the petition says, it ran on rules that favored claimants: service of the claim and award by email, an answer deadline LCF cut to seven days (lengthened to 14 only after the investigation began), and discovery limited to "good cause shown" unless more than $1 million is at stake. Awards typically added the funder's filing and arbitrator fees, and some courts later struck attorney's fees they included (petition, paragraphs 34, 39 to 47, 89 to 100 and 125 to 126).

The abusiveness claims rely on New York's amended General Business Law Section 349, which now declares "unfair, deceptive, or abusive acts or practices" unlawful and treats as abusive taking unreasonable advantage of a person's lack of understanding, inability to protect their interests, or reasonable reliance. The petition says that language took effect February 17, 2026, and that Rapid Ruling issued at least fifteen uncontested awards to an MCA company after that date (petition, paragraphs 138 and 153).

The Attorney General asks the court to bar the respondents from arbitrating for any company that offers merchant cash advances, to cause the dismissal without prejudice of all MCA arbitrations pending before the panel, and to order an accounting, restitution and damages for affected merchants, disgorgement of profits, and a civil penalty of $5,000 for each MCA arbitration administered (petition, demand for relief). None of that has been granted.

Where the case stands

On July 3, 2026, the respondents removed the case to the U.S. District Court for the Southern District of New York, where it is No. 1:26-cv-05679 before Judge Edgardo Ramos (federal docket). On August 14, 2026, the Attorney General moved to send it back to state court and asked for fees, arguing that the removal rested on a Federal Arbitration Act preemption defense while the petition pleads only New York law (memorandum of law). The docket we read on November 13, 2026 lists an opposition filed September 8 and a reply filed September 15, and no ruling on that motion. We could not read the respondents' filings, which were not available there.

A federal court raised the question before the Attorney General did. In Legacy Capital 26, LLC v. Chaldean Enterprise, LLC, a merchant alleged that the two arbitration forums named in its MCA agreement, one of them Mediation & Civil Arbitration, Inc., were run for the MCA industry. On August 28, 2023, Judge Lewis J. Liman granted limited discovery on whether the arbitration clause was induced by fraud and held the funder's motion to compel arbitration in abeyance, writing that the evidence raised "the concern that the arbitral fora exist solely to enforce MCA agreements in favor of the MCA industry" (order). The petition also cites New York state court decisions from 2022 to 2026 that refused to confirm, or vacated parts of, Rapid Ruling awards, mostly over totals or attorney's fees the contract did not support (petition, paragraphs 124 to 126).

What to check in your MCA agreement

An arbitration clause is not a problem by itself. Pull the signed agreement, not a summary, and check these items. Our guide to the merchant cash advance agreement covers the other clauses.

• The arbitration clause. Is it mandatory, who can start it, and does it cover a personal guarantor?
• The named forum. Look for "Mediation and Civil Arbitration, Inc.," "RapidRuling" or "Rapid Ruling," and for any fallback forum. When we checked on November 13, 2026, Rapid Ruling's website still offered its rules effective October 7, 2024.
• The seat and governing law. Rule 12 of those rules deems arbitrations to take place in Dallas, Texas; the petition says awards still list New York, NY as the place of arbitration (petition, paragraphs 16 and 21).
• How notice reaches you. Under the 2024 rules, Rapid Ruling emails notice of a claim, a respondent may answer within fourteen calendar days, and email delivery of an award counts "without regard for" a spam filter (rules, Rules 5.5, 5.6 and 37).
• Fee shifting. Check who pays filing and arbitrator fees and whether the agreement gives the funder attorney's fees or sets a percentage. The rules' fee schedule starts at $350 to file a claim of up to $50,000, and Rule 37 allows additional counsel fees in a court proceeding to confirm if a party does not comply with an award within ten days (rules).
• Arbitrator choice and discovery. Arbitrators are appointed from the platform's panel; the parties may agree on an outside arbitrator only within seven days after an answer, and discovery on claims of $1,000,000 or less needs good cause (rules, Rules 9, 10.3 and 14.1).
• A confession of judgment or personal guaranty. See our guide to confessions of judgment in MCA contracts.

If an award or judgment references Rapid Ruling

Deadlines run from specific events, so write down when the claim was emailed, the award delivered and any court papers served.

1. Gather the agreement, the Rapid Ruling emails, the award and any petition to confirm.
2. Know the court clocks. Under CPLR 7511, an application to vacate or modify an award may be made "within ninety days after its delivery." Under CPLR 7510, a court shall confirm an award on an application made within one year after its delivery unless it is vacated or modified.
3. Know the grounds. CPLR 7511(b) lists corruption, fraud or misconduct in procuring the award, "partiality of an arbitrator appointed as a neutral," an arbitrator exceeding power, and failure to follow Article 75's procedure, a ground lost by a party who kept arbitrating with notice of the defect and without objection. A party who neither took part nor was served with a notice of intention to arbitrate may also argue that no valid agreement was made or that the claim was time-barred.
4. If you were served with a demand or notice of intention to arbitrate, CPLR 7503(c) gives the party served 20 days after service to apply to stay the arbitration; missing it can bar later objections that no valid agreement was made.
5. If a judgment has been entered, ask a New York attorney whether a motion is still available. Do not count on the Attorney General's case to undo it: restitution has been requested, not ordered.

Where settlement and negotiation fit

An award or judgment does not end the conversation with the funder. The petition says, on information and belief, that many petitions to confirm Rapid Ruling awards are resolved outside court when the funder and the merchant reach an agreement (petition, paragraph 129). A negotiated resolution can cover the award, the judgment and any guaranty together, but no funder has to agree and results vary. Get terms in writing, with a release naming the business and any guarantor, and if you are still inside the window to challenge an award, see an attorney before you sign away defenses.

Business Debt Adjusters is a business debt settlement company, not a law firm. We review the agreement and any award and tell you plainly whether negotiation is realistic. Start with a free consultation. If you have been served, also read our page on MCA attorneys in New York. See also MCA debt relief in New York. The funder the petition says helped build the platform is covered on our LCF Group record page, and FundKite, which the petition lists among later claimants, on our FundKite record page.

Rapid Ruling lawsuit: common questions

What is Rapid Ruling?

Rapid Ruling is the trade name of Mediation and Civil Arbitration, Inc., an online arbitration platform incorporated in New York in 2019 by attorneys Zachary Meyer and Andrew Sachs. The New York Attorney General's petition says most of its cases have been filed by merchant cash advance companies against small businesses.

What is New York suing Rapid Ruling for?

Fraud, deception and abusive practices under Executive Law Section 63(12) and General Business Law Section 349. The petition, announced June 8, 2026, alleges the platform presented itself as neutral while an MCA company helped write its rules and its arbitrators were trained and paid in ways that favored funders. These are allegations; nothing has been decided.

Has a court found that Rapid Ruling was biased?

Not in this case, as of November 13, 2026. The respondents removed it to federal court in July 2026, and the Attorney General's motion to send it back to state court had no ruling on the docket we read. In 2023 a federal judge did allow limited discovery into whether a clause naming it was induced by fraud.

Is my Rapid Ruling arbitration award void now?

No. Filing a lawsuit does not void any award or judgment. Under CPLR 7511, an application to vacate or modify an award may be made within ninety days after its delivery, and an award confirmed by a court becomes a judgment. A New York attorney can tell you what options remain for yours.

What should I look for in my MCA agreement?

Read the arbitration clause, the named forum and any fallback, the seat, how notices and awards are delivered, the response deadline, who pays filing, arbitrator and attorney's fees, and whether a confession of judgment or personal guaranty is attached.

Can I still negotiate with the funder after an award or judgment?

Often, though no funder is required to. The Attorney General's petition says many confirmation petitions end in an agreement between funder and merchant. Get any deal in writing, with a release that covers the business and any guarantor, and check your court deadlines with an attorney before you sign.

Will the Attorney General's case pay back affected businesses?

The petition asks for restitution and damages for affected merchants, an accounting, disgorgement and civil penalties, but the court has not ordered any of it. Whether any business recovers money depends on how the case ends.

Sources

• Attorney General press release, June 8, 2026.
• Verified Petition, N.Y. Sup. Ct., New York County, Index No. 452192/2026, dated June 8, 2026.
• Federal docket, No. 1:26-cv-05679 (S.D.N.Y.), read November 13, 2026.
• Memorandum of Law in Support of Motion to Remand, filed August 14, 2026.
• Memorandum and Order, Legacy Capital 26 v. Chaldean Enterprise (S.D.N.Y.), August 28, 2023.
• RapidRuling Commercial Arbitration Rules, effective October 7, 2024.
• Deal Gone Bad? Next Stop Arbitration, deBanked, June 20, 2022.
• CPLR 3218, New York State Senate.
• CPLR 7503, New York State Senate.
• CPLR 7510, New York State Senate.
• CPLR 7511, New York State Senate.
• General Business Law Section 349, New York State Senate.

This article summarizes the sources above as of November 13, 2026. Allegations in a petition are not findings, and dockets may not show every filing. It is general information, not legal advice. Business Debt Adjusters is not a law firm and is not affiliated with Rapid Ruling, The LCF Group, FundKite or the New York Attorney General.