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.
Judge Christopher Droney presented a webinar, "Perspectives on Practicing in the Age of COVID-19" for the Holy Cross Lawyers Association (HCLA).
Michael K. Furey authored article, "Is It Worth the Risk to Represent a Client Who Has Fired a Previous Attorney?," for the New Jersey Law Journal.
On May 7, Judge Droney will speak on the Connecticut Bar Association "Federal Practice Section Meeting: Using Zoom in Federal Courts."
On May 1, Christopher F. Droney will discuss effective advocacy before the federal circuit courts and take questions from Hartford County Bar Association moderators and registrants.
Stan Twardy was quoted in the New York Times article, "Top Aid in Review of Russia Inquiry Resigns From Justice Dept."
Stan Twardy was quoted in CT Post article, "Arrests of Perez, Dunn raise concern that FBI probe is just the beginning."
Day Pitney Press Release
Susan Huntington and Christopher Klimmek were quoted in Hartford Business Journal article, "Gov. Lamont's executive orders have helped CT beat back COVID-19, but some businesses want to curtail his powers."
Day Pitney's Michael Napoleone has been appointed to the Palm Beach County League of Cities board of directors.