TRENTON, N.J. (Legal Newsline) - The New Jersey Supreme Court is aiming to reconcile opposing lower court decisions regarding certification of class action lawsuits brought under the state's Truth in Consumer Contract, Warranty and Notice Act (TCCWNA) and Consumer Fraud Act.
The ruling should go a long way toward clarifying the issue and resolving the growing number of consumer class action lawsuits in which plaintiffs allege they suffered monetary losses as a result of retailers' failure to adequately and clearly disclose product prices in advance of purchases.
Disclaimers, limitations of liability and other terms of purchase incorporated on websites, in contracts, or any type of written notice apply in alleged violations of TCCWNA, a state statute passed in 1981, when internet technology was a far cry from what it is today and usage was much more limited.
Taking two factors into consideration - both the potential number and value of TCCWNA lawsuits - and compensatory damages can reach the stratosphere, according to S. Patrick McKey and Maria Vathis, attorneys at Bryan Cave in Chicago.
¨The broad language of the statute, arguably, makes it applicable to any consumer-facing material – even restaurant menus,¨ the two attorneys wrote to Legal Newsline. That's exactly the situation in two New Jersey lawsuits in which two courts reached opposing conclusions.
The state Supreme Court on July 26 granted leave to appeal two putative class actions in which plaintiffs contend that restaurants violated the state's TCCWNA and Consumer Fraud Act by failing to list cocktail prices on their menus.
A New jersey appellate court decertified the class action in Dugan v. TGI Fridays Inc. a little less than a month before the state Supreme Court granted leave to appeal. In the case, the Superior Court of New Jersey concluded that class action plaintiffs' claims of monetary loss lacked commonality - i.e. that they failed to establish the alleged losses they suffered resulted from the failure of TGI Fridays to list the prices of promotional beer and mixed drinks offers on their menus.
Elaborating, the court explained that "[i]ndividualized inquiries would be required to determine whether each class member was handed a menu that lacked beverage pricing."
In addition, the Superior Court ruled that individual inquiries would have to be made in order to determine that for each class member, the lack of price disclosure on TGIF's menus resulted in monetary losses. The court decided that plaintiffs failed to establish that the issue of fact common to class members prevailed over issues specific to individual class members, the Bryan Cave attorneys say.
The circumstances and allegations set out in Bozzo v. OSI Rest. Partners LLC are similar, but the New Jersey Superior Court reached the opposite conclusion, ruling that plaintiffs established sufficient commonality across class members to warrant class action status.
In reviewing the Dugan case, the state Supreme Court also will consider whether charging different prices for beverages served in different sections of restaurants is a violation of either or both statutes, Vathis noted.
"Taking a view from defendants' perspective, we tend to agree with the ruling in Dugan and believe that such instances are not sufficient grounds for class actions," McKey said. "The underlying damages [in individual instances] sought in these cases are de minimis at best and don't exist at worst."
More significantly, McKey and Vathis do not believe New Jersey legislators foresaw or intended TCCWNA being applied in class actions that aggregate compensatory claims from individuals throughout the state or nation who purchased goods online.
Given their applicability to online consumer sales, TCCWNA class action damage claims could reach into the millions or multiple millions of dollars, McKey said.
"Take, for example, a 'big box´ retailer in New Jersey that makes online, ecommerce sales via its website. How many consumers does that retailer reach?
"We don't think these are the kinds of cases legislators intended this statute be applied to, and we think that's an issue the state Supreme Court may address as well."