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Gibbons Law Alert

Gibbons Law Alert

Tagged: Truth in Consumer Contracts Warranty and Notice Act”(“TCCWNA” or “NJTCCWNA”)

New Jersey Appellate Division Affirms Dismissal of Four Putative Class Actions Claiming Violations of Section 16 of the TCCWNA

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Posted in Class Action Defense

On August 9, 2018

In Duke v. All American Ford, the New Jersey Appellate Division affirmed dismissal of four putative class actions (consolidated for appeal) alleging that agreements to purchase, lease, or rent motor vehicles violated the Truth in Consumer Contracts, Warranty, and Notice Act’s (TCCWNA) Section 16. The trial courts had dismissed all such claims for failure to plead a violation of Section 16. While the appeals in these matters were pending, the Supreme Court issued its decision in Spade v. Select Comfort, holding that “an adverse consequence is a necessary element of the TCCWNA cause of action.” As a result of the Supreme Court’s decision in Spade, the Appellate Division in Duke rejected the appeals and affirmed the orders of dismissal without even considering the various substantive Section 16 arguments. Each of the putative class action complaints alleged that certain clauses in purchase, lease, or rental documents violated Section 16 of the TCCWNA, which, among other things, prohibits language in a written contract “that any of its provisions is or may be void, unenforceable, or inapplicable in some jurisdictions without specifying which provisions are or are not void, unenforceable or inapplicable within the State of New Jersey.” Three of the cases (Duke, Barbarino, and Greenberg), involved contracts for the lease or purchase of vehicles, which contained a...

New Jersey Supreme Court’s “Aggrieved Consumer” Ruling Will Erode TCCWNA Class Actions

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Posted in Class Action Defense

On April 19, 2018

The New Jersey Supreme Court’s April 16, 2018 decision in Spade v. Select Comfort (consolidated with Wenger v. Bob’s Discount Furniture, LLC), entirely destroys the viability of “no injury” class actions under the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) and will also surely erode the viability of TCCWNA class certification more broadly. Via referred questions from the Third Circuit Court of Appeals, the N.J. Supreme Court held that in order to be an “aggrieved consumer” under the TCCWNA, a plaintiff must demonstrate an adverse consequence caused by an unlawful provision in a consumer contract or other writing. The TCCWNA essentially prohibits businesses from including in any written consumer contract, warranty, or sign any provision that “violates any clearly established legal right of a consumer or responsibility of a seller” or other business. N.J.S.A. § 56:12-15. Although the TCCWNA on its face appears to only allow an “aggrieved consumer” to sue to recover a “civil penalty” of not less than $100 or actual damages, this Statute has been used—some might say abused—with increasing frequency by the plaintiff class action bar to bring “no injury” class actions premised solely upon the existence of a contract containing some unenforceable or illegal provision. Naturally, tens or hundreds of thousands of uniform consumer contracts with allegedly offending...

Class Certification of TCCWNA Claims Dealt a Serious Blow by NJ Supreme Court in Dugan v. TGI Fridays and Bozzi v. Restaurant Partners, LLC

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Posted in Class Action Defense

On October 31, 2017

On October 4, 2017, the Supreme Court of New Jersey dealt a subtle but serious blow to “no injury” TCCWNA class actions. In consolidated appeals, Dugan v. TGI Fridays and Bozzi v. Restaurant Partners, LLC, the plaintiffs had argued that the defendant restaurant operators violated the plaintiffs’ clearly established rights by failing to list prices for beverages on their menus, that the restaurants were required to plainly mark the prices, and that when the restaurants’ employees presented menus to customers (class members), they “offered” contracts that violated the New Jersey Consumer Fraud Act (“CFA”) and the Truth-in Consumer Contract, Warranty and Notice Act (“TCCWNA”). However, the Court concluded that class certification was not appropriate because individual, rather than common, issues would predominate in proving TCCWNA’s “aggrieved consumer” and “clearly established legal right” requirements. The fundamental take-away from the Supreme Court’s analysis of TCCWNA’s “aggrieved consumer” requirement is that simply demonstrating that a consumer contract offends TCCWNA does not establish liability under the Act, because “[b]y its very terms, TCCWNA . . . does not apply when a defendant fails to provide the consumer with a required writing.” Rather, “at a minimum, a claimant must prove that he or she was presented with a menu” (i.e., the allegedly offending writing). Using the word “critical” three times,...

California District Court Dismisses Facebook’s TCCWNA “Website Terms and Conditions” Lawsuit in Light of Valid Choice-of-Law Provision

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Posted in Class Action Defense

On February 6, 2017

New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”) ushered in a wave of class actions last year, targeting various provisions in retailers’ websites “terms and conditions.” Broadly speaking, the TCCWNA prohibits “consumer contracts” from containing language that violates any “clearly established legal right[s].” New Jersey courts have not been alone in adjudicating these cases, however, as a number of similar lawsuits have been brought in other jurisdictions, including California federal district courts. For example, on September 7, 2016, the Central District of California dismissed the complaint in Candelario v. Rip Curl, Inc. on standing grounds, holding that because the plaintiff’s “only connection to the Terms and Conditions appears to be her decision to read them” and because her complaint essentially alleged only “bare procedural violation[s]” of the TCCWNA – without more – she could not satisfy “the injury-in-fact requirement of Article III.” Even more recently, although on different grounds, the Northern District of California dismissed a “website terms and conditions” class action against Facebook. In Palomino v. Facebook, Inc., as in Candelario, the plaintiffs alleged that the social media company’s website terms and conditions violated the TCCWNA because of “provisions that purport to ‘1) disclaim liability for claims brought for Defendant’s negligent, willful, malicious and wanton misconduct; 2) bar claims for personal and economic injury...

Doomed CFA and TCCWNA Claims for Proposed Health Club Class Action Lead District Court to Question CAFA Jurisdiction

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Posted in Class Action Defense

On August 25, 2016

The District of New Jersey’s recent decision in Truglio v. Planet Fitness, Inc. provides valuable lessons on pleading claims under the New Jersey Consumer Fraud Act (“CFA”), Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”), and Health Club Services Act (“HCSA”). Not only does the district court’s opinion reinforce the requirement of an ascertainable loss to sustain a CFA claim, but it also confirms that omissions are not actionable under the TCCWNA. Moreover, the district court’s conclusion that the plaintiff in this putative class action did not plead an ascertainable loss directly called into question the subject matter jurisdiction of the court: is there $5 million in controversy under the Class Action Fairness Act (“CAFA”) if the plaintiff has not alleged an ascertainable loss? Read below for more on this case, and stay tuned for additional developments after supplemental briefing on the CAFA issue.

New Jersey Federal Court Confirms TCCWNA Doesn’t Reach “Omissions”

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Posted in Class Action Defense

On July 11, 2016

In the thick of a torrent of litigation, mostly class actions, premised upon purportedly unlawful contractual provisions under the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) – a statute that permits “no-injury” claims – the District of New Jersey has reaffirmed a bright-line rule concerning this law: Omissions don’t trigger liability.

Contractual Limitations Period Bars TCCWNA Class Action

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Posted in Class Action Defense

On June 28, 2016

Class actions brought under the New Jersey Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”) are on the rise. This year alone, Wal-Mart, J. Crew, Avis, Toys R Us, and Apple – among many others – have been sued under this unique state statute that prohibits certain types of unlawful provisions in consumer contracts and other documents. In the past decade, courts have continued to expand the scope of this law – from the New Jersey Supreme Court, which, in 2013, instructed lower courts to construe the statute broadly, to the District of New Jersey, which, in 2014, allowed a TCCWNA class action to go forward against contracts containing commonly-worded exculpatory and indemnification provisions.

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