Jessica Karmasek Mar. 30, 2016, 12:20pm


NEWARK, N.J. (Legal Newsline) - A New Jersey appeals court ruled last week that a lawsuit filed in 2010 over TGI Fridays’ failure to list prices for beer, mixed drinks and soft drinks on its restaurant menus no longer can proceed as a class action.

Presiding Judge Joseph Yannotti, for the New Jersey Superior Court’s Appellate Division, said in a March 24 opinion that the trial court incorrectly certified the class in Dugan v. TGI Fridays Inc.

Yannotti explained that the plaintiffs in Dugan failed to show that common issues of fact as to whether TGI Fridays’ customers who purchased unpriced soda, beer or mixed drinks predominate over issues that pertain to individual class members.

“The class definition approved by the trial court assumes that any patron at a TGIF company-owned restaurant who purchased those beverages sustained an out-of-pocket loss ‘as a result of’ TGIF’s failure to list prices for these items on the menu,” the judge wrote in the 25-page ruling, noting that the trial court’s analysis failed “for several reasons.”

“The class definition erroneously includes all persons who purchased an unpriced soda, beer or mixed drink regardless of whether they reviewed the menu before purchasing the beverages. However, a person cannot establish that he or she sustained an ascertainable loss caused by TGIF’s alleged unlawful conduct unless that person reviewed the beverage section of the menu before making the purchase,” Yannotti continued.

“If a person did not look at the beverage section of the menu, TGIF’s failure to list prices on the menu had no causal nexus to the person’s decision to purchase a particular beverage.”

Defendants TGI Fridays and Carlson Restaurants Worldwide Inc. appealed from an order entered by the Law Division last year, denying their motion to reconsider class certification and decertify the class.

Plaintiffs Debra Dugan, Alan Fox and Robert Cameron cross-appealed from the court’s order certifying the class.

Dugan filed her putative class action complaint against TGI Fridays in January 2010. She alleged she was a patron at one of the company’s corporate-owned restaurants in Mount Laurel, N.J., and was “aggrieved” by its failure to disclose the price of beverages on the restaurant’s menus. She claimed she wasn’t made aware of the prices until she received her check.

In particular, she claimed she was charged $2 for a beer at the bar and later charged $3.59 for the same beer when she moved to a table in the restaurant.

In late 2012, the trial judge granted a motion to certify the class, finding that the plaintiffs had met the requirements for a class action, demonstrating both the predominance of the common issues and superiority of a class action.

The judge defined the class as all persons who visited a company-owned TGI Fridays restaurant “from Jan. 12, 2004 to June 18, 2014, relied upon [TGIF’s] menus, and purchased an offered but unpriced soda, beer or mixed drink.” The defendant class was limited to the 14 company-owned TGI Fridays restaurants in New Jersey.

Later, the judge dismissed Cameron as a class representative, finding he did not fit within the class definition since he allegedly ordered unpriced beverages at a franchise-owned restaurant.

The judge also extended the cut-off time for claims to July 14, 2014, the date Carlson sold the chain of restaurants to new owners, who were not named in the complaint.

Last year, TGI Fridays filed its motion to reconsider class certification and decertify the class or, in the alternative, to revise the class definition. By order entered Feb. 13, 2015, the judge denied the motions.

TGI Fridays then filed a motion for leave to appeal the trial court’s order, and to stay class notification. The appeals court, at the time, denied TGI Fridays motions. As Yannotti noted in last week’s ruling, the appeals court at the time “specifically declined” to address the issue of whether the matter should be certified as a class action.

Soon after, the state Supreme Court stayed class notification, granted TGI Fridays’ motion for leave to appeal and remanded the matter to the appeals court for consideration of the merits of the appeal.

TGI Fridays, on appeal, argued the trial court erred by denying its motion to reconsider class certification and decertify the class because plaintiffs failed to meet the requirements for maintaining a class action.

In their cross-appeal, plaintiffs argued the lower court erred by limiting the class to persons who purchased unpriced beverages at TGI Fridays’ company-owned restaurants; excluding purchasers of coffee, tea and miscellaneous beverages from the class; and excluding persons who purchased unpriced soda, beer and mixed drinks after July 14, 2014.

Yannotti noted in the appeals court’s opinion that while Dugan may have been misled to believe she would be charged the “happy hour” price for both of her drinks, that may not be so as to other patrons who made similar purchases.

“We are therefore convinced that, with respect to the claims under the CFA (Consumer Fraud Act), the trial court erroneously found that issues of fact common to members of the class predominate over issues that affect individual class members,” the judge wrote. “The court therefore erred by allowing these claims to be maintained as a class action.”

The appeals court said in light of its decision, it need not consider the plaintiffs’ contention that the lower court erred by excluding certain patrons and purchases.

Yannotti said the matter would be remanded to the trial court for further proceedings on the plaintiffs’ individual claims.

The Law Office of Sander Friedman, in West Berlin, N.J., represented the plaintiffs in the case, and is representing another plaintiff, Michael Grace, in a similar but separate class action.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

More News