NJCJI has filed amicus briefs in several Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA) lawsuits, and has been following other cases quite closely. Below is an update on the cases we’re involved with and info on some other notable cases.
The Drink Price Cases
On April 4, the New Jersey Supreme Court held oral arguments in two TCCWNA cases that have come to be known as the drink price cases. NJCJI filed an amicus brief in one of the cases, Dugan v. TGI Friday’s, Inc.
The plaintiffs in this class action claim a restaurant’s failure to clearly post prices in the menu on all drink items violates TCCWNA and the New Jersey Consumer Fraud Act. In our brief and at oral arguments, we argued that only “aggrieved consumers” should have standing to bringing a TCCWNA lawsuit, and consumers who have not, at a minimum, been exposed to the allegedly offending contract or notice are not aggrieved.
We also pointed out that TCCWNA class actions are not more efficient than individual litigation in situations where a class-member-by-class-member mini-trials are necessary to determine which consumers are “aggrieved.”
NJ Supreme Court to Decide If Undisclosed Restaurant Drink Prices Can Be Basis of Class-Action Suits: New Jersey Law Journal, April 4, 2017.
Kaufman v. Lumber Liquidators
We partnered with the United States Chamber of Commerce to file a friend of the court brief in this TCCWNA case that the Appellate Division will soon be deciding.
TCCWNA provides, in relevant part, that:
No seller, lessor, creditor, lender or bailee shall in the course of his business . . . enter into any written consumer contract . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by State or Federal law at the time . . . the consumer contract is signed . . . .
We argue that the “clearly established” right of a consumer
must be a settled one that is “beyond debate,” such that “any reasonable” seller would be on notice that the provision is prohibited. Accordingly, the right must be clear and unambiguous on the face of the statute at issue or under controlling and dispositive decisional law. Moreover, the right must be settled at the time that the contractual provision is entered into; subsequent case law or statutes cannot suffice. Only if these requirements are met will the seller have fair warning of what kind of provisions may invoke penalty damages under TCCWNA.
Oral arguments in this case were held in September 2016.
Barbarino v. Paramus Ford
In this case, we are asking the court to give meaning to the term “aggrieved consumer” as used in the TCCWNA. Right now, a lot of TCCWNA cases being brought against businesses who offer warranties or terms of service that say something like “void where prohibited” or “unless prohibited by law” without specifying if there are any terms void in New Jersey. Oral arguments in this case were held in March.
Judge Dismisses Suit Against J. Crew
In late March, U.S. District Court Judge Freda Wolfson dismissed a TCCWNA class action that had been filed against J. Crew over its online terms and conditions because the plaintiff suffered no concrete harm.
Wolfson concluded by saying:
The Court is aware that there are numerous class actions filed in this district based on similar TCCWNA violations alleged in this case. While the intent of the New Jersey Legislature in enacting the TCCWNA is to provide additional protections for consumers in this state from unfair business practices, the passage of the Act is not intended, however, for litigation seeking plaintiffs and/or their counsel to troll the internet to find potential violations under the TCCWNA without any underlying harm. In such instances, standing would be lacking.
J. Crew Cleared in TCCWNA E-Commerce Suit: New Jersey Law Journal, March 30, 2017.
Federal Judge Sprays a Little Pesticide on Garden State’s Parasitic Plaintiffs: ATRA, March 31, 2017.
Hite v. Lush Internet Inc.
Chief Judge Jerome Simandle of the U.S. District Court also dismissed a TCCWNA class action based on an online terms of service agreement in March. He found that the plaintiff, who had purchased a product from Lush Cosmetics suffered an injury that was “metaphysical at best.”
Suit Against Cosmetics Website Held Futile Without Showing of Harm: New Jersey Law Journal, March 23, 2017.
Lush Beats Suit Alleging Website Terms Shirk NJ Law: Law360, March 22, 2017.
Smerling v. Harrah’s Entertainment, Inc.
Back in September 2016, a New Jersey appeals courts overturned a trial court’s decision allowing a TCCWNA class action over birthday coupons given out by Harrah’s. The court held that the coupon offer was not a “consumer contract” and the plaintiff was not a “consumer.”
In March 2017, the New Jersey Supreme Court declined to take up the case on appeal, bringing an end to this litigation, which has been pending since 2004.
NJ High Court Won’t Disturb Harrah’s Win In Promo Case: Law360, March 15, 2017.
Harrah’s Wins Appeal in Birthday Coupon Case: Press of Atlantic City, Sept. 14, 2016.
The Third Circuit Wants Some Clarification Too
We at NJCJI are not the only ones looking to the New Jersey Supreme Court to provide some clarity on the terms “aggrieved consumer” and “clearly established legal right.” The NJ Supreme Court has agreed to answer the following certified question from the Third Circuit:
Is a consumer who receives a contract that does not comply with the Delivery of Household Furniture and Furnishings Regulations (Furniture Delivery Regulations), N.J.A.C. 13:45A-5, but has not suffered any adverse consequences from the noncompliance, an “aggrieved consumer” under the Truth-in-Consumer Contract Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-17; and, does a violation of the Furniture Delivery Regulations alone constitute a violation of a clearly established right or responsibility of the seller under the TCCWNA and thus provide a basis for relief under the TCCWNA?
The court’s answer will provide clarity not only to the Third Circuit, which is looking for guidance as it decides the cases David Spade v. Select Comfort Corp. and Christopher Wenger v. Bob’s Discount Furniture, LLC, but to everyone.
Clarifying what the terms “aggrieved consumer” and “clearly established legal right” mean will go a long way toward ensuring that this statute does what it was designed to do, protect consumers, without being a tool that attorneys can use to troll for lawsuits against well-meaning businesses.
TCCWNA is going to remain a muddled mess until the courts or the legislature clarifies certain terms in the statute and settles some procedural questions. The defendants in all of the cases above should be applauded for their willingness to litigate instead of settling so that the courts have an opportunity to set things straight.