Fazio v. Altice USA, ___ N.J. ___ (2025). As Justice Fasciale noted in his opinion for a unanimous Supreme Court today, “[h]abit evidence is particularly well suited for cases involving reasonably regular and uniform routine practices of business organizations.” New Jersey Evidence Rule 406 permits proof of conduct in a particular instance via the presentation of habit or routine practice. The application of that Rule was at the center of this appeal.

The issue arose in the context of a dispute over contract clauses requiring mandatory arbitration of disputes. Plaintiff purchased cellphone service from defendant Altice at one of its retail stores. Crucially, as Justice Fasciale noted, “[w]hile he was there, plaintiff was not shown the customer service agreement or any other document that contained arbitration and opt-out provisions. Instead, a salesperson handed plaintiff a receipt that stated, without any reference to arbitration, ‘[a] copy of all documents and agreements -- including Terms & Conditions, AutoPay, handset insurance, etc., -- will be sent electronically to the email address you provided during account creation.’”

The documents and agreements to be sent purportedly included a Customer Service Agreement (“CSA”). The CSA contained a mandatory arbitration provision that included, among other things, an express waiver of a jury trial.

A few days later, plaintiff went to an Altice store and bought a cellphone. This time, while at the store, he was given and signed a written Retail Installment Contract (“RIC”) that included an arbitration provision. But that provision “did not mention anything about waiving his right to a jury trial or to sue in court.”

In 2021, during the COVID-19 pandemic, plaintiff went to an Altice store to address a problem with his cellphone. Because plaintiff has quadriplegia, which makes breathing difficult, he did not wear a face mask. Due to that, Altice refused to allow him into the store and called the police. Plaintiff later sued, alleging a violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., for failure to accommodate his condition, and for negligent infliction of emotional distress by calling the police and thereby “creat[ing] a spectacle whereby other customers were emboldened to harass [plaintiff] on the basis of his disability.”

Defendants (collectively, “Altice”) moved to compel arbitration. Altice submitted an affidavit from its Senior Director of Business Process Management for retail stores, who certified familiarity with ‘[defendants’] business practices” and generally certified that after buying cellular service, plaintiff “would have received a copy of the Customer Service Agreement by email.” Plaintiff responded that he had never received a copy of the CSA by email, and that he had searched his email and found no message containing an arbitration clause.

The Law Division granted the motion to compel arbitration. The Appellate Division affirmed. On further review, the Supreme Court today reversed and remanded the case for trial, applying de novo review to the legal question of whether (as Justice Fasciale phrased it) “Altice can rely on evidence of a habit or routine practice to prove that a salesperson emailed plaintiff the customer service agreement, and, if so, whether such evidence establishes a rebuttable presumption that Altice acted in conformity with that habit or routine practice when plaintiff purchased his cellular service..”

The answer hinged on Evidence Rule 406, which states:

“(a) Evidence, whether corroborated or not, of habit or routine practice is admissible to prove that on a specific occasion a person or organization acted in conformity with the habit or routine practice.

(b) Evidence of specific instances of conduct is admissible to prove habit or routine practice if evidence of a sufficient number of such instances is offered to support a finding of such habit or routine practice.”

Justice Fasciale observed that habit evidence under Evidence Rule 406 is especially useful “when, for example, the organization is large, the organization’s nature is complex, and there are few expectations that there exists direct proof of any one single act.” That was so here. But before evidence of habit can be used to prove conduct in a specific instance, “the offering party must establish the degree of specificity and frequency of uniform response that ensures more than a mere ‘tendency’ to act in a given manner, but rather, conduct that is ‘semi-automatic’ in nature.” Justice Fasciale emphasized that “[t]he degree of specificity of the habit or routine evidence is crucial to establishing the inference that a business employed a regular practice of addressing a particular kind of situation with a specific type of conduct and the likelihood that it occurred on the occasion at bar.”

Here, Altice’s affidavit lacked that specificity. The affiant stated “’I am familiar . . . with [defendants’] business practices’ but did not identify what those practices were for either [defendant]. And [the affiant] did not describe how such habit or routine practices were undertaken. The … affidavit did not, for example, certify that an email is automatically sent by a computer upon a certain condition or that it is a specific employee’s job to send an email after a customer purchases cellular service. Instead, [the affiant] only speculated in conditional terms that ‘[w]hile placing the orders, plaintiff would have discussed the Customer Service Agreement and any contract terms and conditions for the [cellular] service with a customer service representative,’ and that ‘[w]hen plaintiff ordered cellular services’ he ‘would have received a copy of the Customer Service Agreement by email.’ [The affiant] did not set forth, with specificity, what the customer service representatives routinely discussed with customers. [The affiant] did not list how or when or from whom emails containing customer service agreements were routinely sent. In short, [the affiant] did not set forth what either [defendant’s] specific business practices were regarding how customers were provided with service agreements.”

That defeated Altice’s effort to rely on the CSA. But Altice fell back to the RIC, asserting that it required arbitration. But Justice Fasciale found that the RIC, “which simply incorporated the terms and conditions of the customer service agreement” that Altice did not prove plaintiff received, did not comply with New Jersey law as to what an arbitration clause must contain.

The Court reversed the decision below and remanded the case for trial, not for further discovery. “Altice represented that this appeal can be adjudicated on the existing record and that it did not need discovery to carry its burden of establishing an N.J.R.E. 406 habit or routine practice or its adherence to such habit or practice in this case. And because the parties urged us to decide this appeal without remanding for an opportunity to more fully develop the record at the trial level, we remand solely for trial and not to re-open the motion record,” Justice Fasciale concluded.