In Wolf v. Nissan Motor Acceptance Corp., 2011 WL 2490939 (D.N.J. 2011), Judge DeBenedictis applied Concepcion to stay a class action matter, and order same to arbitration.   In Wolf,  Matthew S. Wolf, filed a class action suit against Defendant NMAC alleging violations to the Servicemembers Civil Relief Act, 50 U.S.C.App. §§ 501 et seq. (or, “SCRA”). Nissan moved to dismiss or stay Wolf’s claims and compel arbitration, based on an arbitration provision agreed upon by the parties.  Matthew S. Wolf is a captain in the Judge Advocate General’s Corps of the United States Army Reserves. On November 25, 2006, Wolf signed a lease for a 2007 Nissan Infiniti G35 Sedan for thirty-nine months.  The lease contained an arbitration clause mandating that all claims are subject to arbitration.  Wolf paid $595 in “capitalized cost reduction” (“CCR”), an advance toward the lease’s rent. He also prepaid other items for which, alternatively, he could have paid on a monthly basis. During the life of the lease, however, Wolf entered into active military service. On October 30, 2007, he returned his leased vehicle to Nissan. Moreover, Wolf invoked the SCRA. According to Wolf’s complaint, the SCRA entitles military service members, like himself, to a prorated refund of lease payments made in advance. Despite Wolf’s invocation of the SCRA and his provision of proper notices, Nissan refused to refund to Wolf any prorated CCR payments.  In June 2010, Wolf filed a class action suit against NMAC, alleging conversion and violation of the SCRA. Several months later, Nissan moved to dismiss or stay Wolf’s claims and compel arbitration.  The district court granted the petition, rejecting the argument that the SCRA vitiated the arbitration clause: 


The SCRA is intended “to provide for, strengthen, and expedite the national defense through protection extended by [the SCRA itself] to service-members of the United States to enable such persons to devote their entire energy to the defense needs of the Nation.” 50 U.S.C.App. § 502(1). Among the circumstances in which the SCRA protects eligible members of the Armed Forces is when a service member terminates a motor vehicle lease. See id. § 535. In the event that a service member terminates a motor vehicle lease covered by the SCRA, “[r]ents or lease amounts paid in advance for a period after the effective date of the termination of the lease shall be refunded to the lessee by the lessor (or the lessor’s assignee or the assignee’s agent) within 30 days of the effective date of the termination of the lease.” Id. § 535(f).     Certainly, the SCRA aspires to free members of our Armed Forces from civilian obligations to the extent that those obligations may distract or interfere with our service members’ military service and objectives. When an individual or entity does impose undue hardship upon a service member in violation of the SCRA, there are remedies to be had. However, the SCRA, by its own words and provisions, does not bar or otherwise invalidate a class action or arbitration waiver provision. Wolf sensibly questions whether such a waiver imposes additional obligations or burdens upon a service member, but that legitimate concern does not graft another term or directive onto a clearly worded statute. Wolf points to no section or subsection within the SCRA that precludes waivers of class-wide proceedings. Absent direct authority of that kind, the Court cannot assume the SCRA modifies or nullifies a contractual agreement mutually adopted by private parties to the degree asserted by Wolf. Nor may the Court infer without warrant the SCRA’s tacit supersession or predominance over the FAA, and the latter’s policies favoring and promoting arbitration—especially in light of the recent decision of the Supreme Court of the United States in AT & T Mobility L.L.C. v. Concepcion, 131 S.Ct. 1740 (2011), to be discussed infra.     Further, Wolf highlights Section 517 of the SCRA to suggest that any waiver to his statutorily prescribed protections must comport with the particular requirements governing waivers as articulated in that section. But the class action waiver does not deprive Wolf of any SCRA rights or privileges, at least not as identified by Wolf in his opposition. Should the SCRA guarantee service members the right to a class-wide proceeding to vindicate their statutory benefits, then that has not been made apparent to the Court. The SCRA protects service members in certain dealings with motor vehicle leases, and private contracts contravening those protections may have to succumb to the federal statute. But there is no indication that the SCRA protects service members from class action or arbitration waivers to which they assented.


The district court followed Concepcion in rejecting the argument that New Jersey Supreme Court precedent deemed the arbitration clause unconscionable.  (Muhammad v. Cty Bank of Rehoboth Beach, 912 A.2d 88, 97 (N.J.2006)).   


Though Wolf’s argument and authority are persuasive, the Court must take note of the recent decision issued by the Supreme Court of the United States in AT & T Mobility L.L.C. v. Concepcion, 131 S.Ct. 1740 (2011). In that case, the Supreme Court addressed a California rule of law that—like the New Jersey principles of contract articulated in Muhammad—deemed as unconscionable class action and collective arbitration waivers in consumer contracts of adhesion in which the likely damages would be predictably small. Id. at 1746, 1750. The Supreme Court held that the FAA, with its objective toward encouraging arbitration, preempted the California rule, because by invalidating portions of arbitration agreements and imposing class-wide proceedings where they otherwise have been waived, the California rule interferes with and stymies arbitration. Id. at 1750–51, 1753.    Based on the United States Supreme Court’s holding and reasoning in AT & T Mobility, the Court cannot find that any public interest articulated in this case, either in connection with the SCRA or New Jersey law, overrides the clear, unambiguous, and binding class action waiver included in the parties’ arbitration agreement. New Jersey precedent notwithstanding, the Court is bound by the controlling authority of the United States Supreme Court.