A clause in Verizon cell-phone service contracts that makes arbitration of disputes mandatory but prohibits arbitration as a class is enforceable under federal law, despite New Jersey Supreme Court precedent to the contrary.

The Third U.S. Circuit Court of Appeals on Wednesday affirmed dismissal of a putative class action, Litman v. Cellco Partnership, 08-4103, based on a finding by the U.S. Supreme Court last April that the Federal Arbitration Act preempts contrary state law.

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