Our court system shouldn’t have to deal with suits over the length of sandwiches, amusement park rides that make kids too dizzy, and gassy co-workers. But it does.
Why? Because numerous state laws explicitly encourage litigation when other means of dispute resolution would be quicker and more cost effective; poorly drafted statutes invite endless lawsuits over their interpretation; and antiquated policies limit the ability of our state to improve its legal climate.
Things have gotten so far off track, New Jersey has been named one of the nation’s worst “judicial hellholes.” At this point, there is nowhere to go but up, and the time is right to make changes, both legislatively and via judicial action.
After the Law Journal reports on a case or controversy, sometimes there are new developments that we miss out on when we move on to the next story. With 2016 coming to an end, we decided to take stock of new developments in some of those cases.
Employee-friendly initiatives, a proposal barring granting state contracts to businesses with mandatory arbitration clauses and gaming-related measures for racetracks may be on the horizon across New Jersey’s legislative and regulatory landscape in 2017, but the upcoming gubernatorial election could limit how much deal-making gets done.
Litigation over TCCWNA exploded in New Jersey courts in 2016, with well-known retailers such as Toys R Us, Victoria’s Secret and J. Crew among the defendants. The measure, which bans contract provisions that violate an already-established legal right, was enacted in 1981 but attracted little attention until 2016, when plaintiff lawyers suddenly let loose with a deluge of suits claiming violations.
Many of the suits claim that broadly worded disclaimers in companies’ e-commerce terms of service violate TCCWNA.
More recently, the [New Jersey Civil Justice Institute] has observed growth in the number of businesses who report receiving TCCWNA demand letters from plaintiff lawyers, reporting that the company is in violation of the statute, said [NJCJI president Marcus] Rayner. The targeted companies are invited to negotiate the issue, and often will agree to pay $10,000 or $20,000 to the lawyer to avert a suit, Rayner said.
“This is a growth industry. I would say it’s becoming a real problem,” Rayner said.
The American Tort Reform Association has released its annual “Judicial Hellholes” report, and New Jersey is near the top of its list. ATRA notes that our state’s consumer protection laws are far from mainstream, and our court system is becoming hostile to arbitration agreements, in direct contravention of federal law.
“It’s disappointing, but not surprising that ATRA has identified us as a ‘Hellhole,’” said Marcus Rayner, the president of the New Jersey Civil Justice Institute. “Our courts have issued some opinions that are really out of the mainstream in a few key areas – namely consumer protection and arbitration – and people in the business community, now even at the national level, are taking note.”
“The arbitration-related decisions the report highlights are really concerning. The New Jersey Supreme Court has weakened the right to arbitrate in New Jersey, in direct violation of federal law, despite the fact that arbitration is faster, cheaper, and just as fair as going to court. This is especially true when you consider the alternative to arbitration is often class action litigation, where the biggest beneficiary is the attorney bringing the case,” said Rayner.
“When it comes to consumer protection, we’ve been saying for years that New Jersey needs to enact some common sense reforms to bring our law more into the mainstream. Our main consumer protection laws, the Consumer Fraud Act (CFA) and the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), aren’t giving consumers appreciably better customer experiences, but they are inspiring lots of litigation. For example, CFA litigation increased 447% from 2000 to 2009, but there’s no evidence there was more actual fraud to fight during that period,” said Rayner.
The New Jersey Civil Justice Institute has filed an amicus brief in a class action brought by consumers who claim a restaurant’s failure to clearly post prices in the menu on all drink items violates New Jersey’s Consumer Fraud Act (CFA) and Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA). NJCJI has been spearheading the effort to reform both the Consumer Fraud Act and the Truth-in-Consumer Contract, Warranty, and Notice Act, so we are very interested in what the court will do with this case and a similar case where the court will decide whether “charging different prices for the same beverage, depending upon where in the restaurant the beverage was served” can be the basis of a CFA and TCCWNA class action. Continue reading →
A home security company has been slapped with a putative class action in New Jersey federal court alleging its customer terms illegally limit the time frame for consumer lawsuits to one year, in violation of the state’s consumer contracts law.
Michael P. Daly and Jenna M. Poligo | Drinker Biddle & Reath LLP
A lot of ridiculous lawsuits were filed in New Jersey this year, but only one can be crowned 2016’s Most Ludicrous Lawsuit. Cast your vote now for this year’s “winner.”
This year’s nominees are:
Amusement Park Ride Makes Kid Dizzy
Amusement park rides are supposed to make you dizzy, right? Not according to the parents of a child who lost his balance and hit his head after getting off the Bugs Bunny Camp Carousel. They are suing Six Flags Great Adventure for $75,000 for their son’s alleged injuries. The real kicker is the child’s dizzy spell happened four years ago, but the lawsuit was just filed this year.
“I can’t deny it’s amusing to look back at all the crazy lawsuits that popped up in the New Jersey courts this year, but is important to remember that this is really not a laughing matter. These lawsuits exist because our legal system is fundamentally flawed,” said NJCJI president Marcus Rayner.
“Many of the worst lawsuits are filed because New Jersey law incentivizes them. When the law encourages a disregard for personal responsibility, or allows uninjured parties and their attorneys to collect a windfall, people are going to take advantage of it.”
“We want to highlight the results this sort of a system produces by awarding the title ‘Most Ludicrous Lawsuit’ to a deserving recipient. But we also want to work to improve our system so that these sorts of lawsuits become a thing of the past. Legal reform is a non-partisan, low-cost way to improve our state’s legal environment, and thus, our economy.”
Want to help us advance common sense legal reform in New Jersey? Fill out the “Quick Contact” box at the bottom of this page, and we will be in touch with information on how you can help fight lawsuit abuse.
The attorney for an Accutane user seeking to reinstate his $25 million jury verdict over the acne drug’s adverse effects urged the New Jersey Supreme Court on Thursday to apply the state’s statute of limitations rules to the case, emphasizing the Garden State’s role as a “vanguard” of pharmaceutical law.
Lawyers argued before the New Jersey Supreme Court Thursday over whether an appeals court erred in overturning a $25 million verdict against a pharmaceutical company because the plaintiff violated the statute of limitations in the state where he lives.
The Hertz Corporation on Thursday ducked a class action alleging it failed to specify if a pricing provision in its Gold Plus rewards program applies in New Jersey, with a federal judge invoking the Supreme Court’s Spokeo standard by ruling the customer leading the suit failed to prove he was injured by the omission.
More than three decades after its passage, a modest New Jersey consumer-protection law has become an Internet scourge, at least in the eyes of some companies. Passed in 1981 to ensure businesses did not mislead customers about their rights, the Truth in Consumer Contract, Warranty, and Notice Act helped eliminate confusing language in sales offers, store notices, and product liability statements. And then it sat quietly, a seldom-noticed piece of the state’s legal furniture.
Democratic gubernatorial candidate Phil Murphy on Tuesday elaborated on his reluctant support for the deal to replenish the state’s infrastructure fund, saying he would have pushed for a “clean” tax trade-off.
The New Jersey Civil Justice Institute has filed an amicus brief in two cases related to the price of drinks on menus. The cases, Dugan v. TGI Friday’s, Inc. and Bozzi v. OSI Restaurant Partners, LLC (which was not a written opinion in the lower court) are both class actions brought by consumers who claim the restaurant’s failure to clearly post prices on all drink items violates New Jersey’s Consumer Fraud Act (CFA) and Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA).
The court has asked the following question in both cases:
“Is class certification appropriate in this action where plaintiffs allege that defendant violated the Consumer Fraud Act (N.J.S.A. 56:8-1 to -184) and the Truth-in-Consumer Contract, Warranty, and Notice Act (N.J.S.A. 56:12-14 to -18) by failing to include drink prices on its menu?”
In the Dugan case, the court will also determine whether “charging different prices for the same beverage, depending upon where in the restaurant the beverage was served” can be the basis of a CFA and TCCWNA class action.