In recent years,
The Supreme Court's Recent Holding in AT&T Mobility
In AT&T Mobility, 179 L. Ed. 2d at 759 the Supreme Court, in a 5-4 vote, overturned a 9th U.S. Circuit Court of Appeals decision, which had declared a class action waiver in an arbitration provision unenforceable under California law for public policy reasons. The case involved a dispute resolution provision in a consumer cellular telephone contract that the district court had described favorably as a "quick, easy to use" dispute resolution procedure that was likely to "promp[t] full or ... even excess payment to the customer without the need to arbitrate or litigate."
The Supreme Court reversed the 9th Circuit and held that the Discover Bank rule is pre-empted by the Federal Arbitration Act.
Background of the New Jersey Case
NAACP of Camden
After a hearing to assess plaintiffs' claims of unconscionability, the trial court upheld the class action waiver, dismissed the complaint, and referred the case to arbitration.
The Court's Application of AT&T Mobility
The Appellate Division rejected plaintiffs' claim that the arbitration provisions were unconscionable and therefore unenforceable on public policy grounds, but it did so based upon AT&T Mobility, rather than the evidential hearing relied upon by the trial court. As the court reasoned, "in light of the United States Supreme Court's supervening opinion in AT&T Mobility, plaintiffs' unconscionability and public policy arguments must fail for a legal reason, regardless of how one views the testimony adduced at the Muhammad hearing."
The Arbitration Provisions Nonetheless Found Unenforceable
Even before declaring the unconscionability and public policy arguments ineffective under AT&T Mobility, the Foulke court acknowledged that the Supreme Court's decision left the door open to challenge arbitration provisions and class waivers based on contract formation principles. Citing both a footnote in the majority opinion and a broader discussion in Justice Thomas' concurring opinion, the
In its analysis, the Appellate Division held that the RIC, the Addendum, and the SAD all included arbitration provisions that were "plagued with confusing terms and inconsistencies." Among those inconsistencies were the nature of the arbitration procedure (e.g., rules to be utilized, arbitrator or arbitrators to be used, and method of selection), locale of the arbitration, the costs of the arbitration and who is to bear them, the class waiver provisions, and time limitations.
Chase Rogers, former Chief Justice of the Connecticut Supreme Court, served as faculty at the New Appellate Judges Seminar, sponsored by the Institute of Judicial Administration (IJA) at New York University School of Law from July 15 – 20 in New York City.
Day Pitney Alert
On May 31, Michael Furey will be speaking at "Commercial Litigation from the Masters," a program being presented by the New Jersey Institute for Continuing Legal Education (NJICLE) and being held at the New Jersey Law Center in New Brunswick, NJ.
Day Pitney Alert
Elizabeth (Beth) Sher was invited to participate in a National Institute of Trial Advocacy (NITA) symposium and training program in Tokyo that took place September 2-3, 2017.
Day Pitney Press Release
Gary Betensky and Michael Napoleone were featured in a profile, "Day Pitney LLP: Firm Expands to Better Serve South Florida Clients," published in the March issue of The Boca Raton Observer magazine.
Day Pitney's representation of Walmart is noted in a Law360 article, entitled "Walmart Wins At NJ High Court In Fight Over Medical Terms."
Jed Davis was quoted in a feature article, "The Privacy Fight For Digital Data Warrants Is Just Starting," published by Law360.
Day Pitney LLP, led by partner Michael Furey, is representing a major retailer in connection with a personal injury case of first impression that is pending in the Supreme Court of New Jersey.