The Third Circuit Adopts Concepcion and Finds Muhammad Superseded By It

Litman v. Cellco Partnership, 655 F.3d 225 (3d Cir. 2011). In AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011), a 5-4 majority of the Supreme Court of the United States rejected a California rule that often invalidated class action waivers in consumer contracts. The decision spawned much discussion about the future of such class action waivers. New Jersey was a particular focus of that discussion since the Supreme Court of New Jersey had voided a class action waiver in Muhammad v. County Bank of Rehoboth Beach, 189 N.J. 1 (2006), and the Third Circuit had followed Muhammad and invalidated a class action waiver in a pre-Concepcion ruling involving New Jersey law, Homa v. American Express Co., 558 F.3d 225 (3d Cir. 2009).

Now, in a decision written by Judge Jordan, the Third Circuit has held that Concepcion effectively overruled Muhammad. Like Concepcion, this ruling involves cellphone service.

In a lengthy footnote, Judge Jordan described the arguments that plaintiffs had made against the application of Concepcion to supersede Muhammad. It does not appear from that description that plaintiffs contended that Concepcion addressed only the particular California rule at issue there, and that New Jersey’s rule, embodied in Muhammad, is sufficiently different from the California rule as to call for a different result. That potential argument is discussed here. Thus, that argument may remain available to plaintiffs. Whether it would prevail is certainly uncertain.