The Third Circuit today reversed dismissal of a New Jersey-only class action alleging that American Express violated the New Jersey Consumer Fraud Act by misrepresenting its "cash back" promotion for holders of the Amex Blue Card. The district court tossed the case on the ground that the card member agreement, which provided for application of Utah law, required individual arbitration of the claims. The Third Circuit held that:
- The federal Arbitration Act doesn't pre-empt state law unconscionability principles;
- Controlling New Jersey case law might bar enforcement of the no-class-arbitration clause as unconscionable and preclude application of contrary Utah law; and
- The district court on remand should consider whether "the claims at issue are of such a low value as effectively to preclude relief if decided individually".
Homa v. Am. Express Co., No. 07-2921 (3d Cir. Feb. 24, 2009).
For a list of other recent cases that held likewise, lookie here.
