Judge Denise Cote in the U.S. District Court for the Southern District of New York last week held that a class action waiver in a pre-dispute arbitration clause in eBooks purchasers’ customer agreements rendered the arbitration agreement unenforeceable because the costs of pursuing claims individually would not permit individuals to vindicate their statutory rights.  See In re Electronic Books Antitrust Litig., 11 MD 2293 (DLC) (S.D.N.Y. June 27, 2012).  The eBooks purchasers – who had purchased their books either from amazon.com for download on Kindle or from barnesandnoble.com for download on Nook  — brought the class action against six publishers for price-fixing, among other claims.  Both of those websites had dispute resolution clauses in the download agreements that included class action waivers.   The court followed the Second Circuit’s decision in In re American Exp. Merchants’ Litig., 667 F.3d 204, 214 (2d Cir. 2012), and held that the high cost of pursuing antitrust claims individually was so prohibitive that individuals could not vindicate their rights under the federal antitrust laws, thus rendering the arbitration clauses unenforceable.

This decision is another example of courts properly circumventing AT&T Mobility’s holding that the FAA preempts state laws declaring class action waivers in consumer PDAAs per se unenforceable.  Hopefully, more courts will follow the lead of Judge Cote, the Second Circuit and others.