Class Action Arbitration Waiver in Consumer Contract Enforceable

A federal district court in New Jersey held that a class action arbitration waiver contained in an arbitration agreement between a consumer and a business is enforceable even though the state court had held that such waivers are unconscionable. Litman v. Cellco Partnership, No. 07-CV-4886 (2008). See http://www.wileyrein.com/docs/docs/215.pdf The federal court found that the Federal Arbitration Act preempted a New Jersey Supreme Court holding that found class action arbitration waivers unconscionable. The court acknowledged that its holding would effectively end the Verizon Wireless customer’s claim, but that any change to the FAA’s preemptive power would have to come from Congress, not the courts.

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