On August 24, 2011, in Litman, et al. v. Cellco Partnership d/b/a Verizon Wireless, No. 08-4103, on remand from the United States Supreme Court, the United States Court of Appeals for the Third Circuit (Philadelphia) held that New Jersey law — providing that class arbitration waivers in consumer contracts of adhesion may be unconscionable and unenforceable — is inconsistent with the Federal Arbitration Act. At issue in the case was Verizon’s unilateral imposition of a $0.40 and/or $0.70 administrative fee for existing contracts containing class arbitration waivers. Applying AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011), the Third Circuit Court of Appeals reversed itself and endorsed the District Court’s decision, issued on September 29, 2008 (D.C. No. 07-CV-4886 [FLW]), which had ordered individual arbitration of the plaintiffs’ claims.
Litman, et al. v. Cellco Partnership d/b/a Verizon Wireless (Third Circuit Court of Appeals)
Litman, et al. v. Cellco Partnership d/b/a/ Verizon Wireless (District Court of New Jersey)