New Jersey Civil Justice Institute concerned about consumer lawsuit spike

By Sean Fowler | May 13, 2016


TRENTON, N.J. (Legal Newsline) – A civil justice reform organization in New Jersey continues to be concerned about an increase in the number of lawsuits filed under a New Jersey business conduct law.

"We’ve been sounding the alarm about the unique danger New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA) poses to our state’s businesses for several years now," Marcus Rayner, president of the New Jersey Civil Justice Institute (NJCJI), recently told Legal Newline.

The TCCWNA is a New Jersey law intended to protect consumers from deceptive language in advertising by making it illegal for any provisions or contract terms to be contrary to New Jersey or federal law. There has been a sharp increase in the number of cases as of late, however.

For instance, in April, a woman sued clothing retailer J.Crew, alleging that its website contains provisions that lessen the impact of its disclaimers, not making clear what policies would not be enforceable in New Jersey.

It's cases like this one, where the plaintiffs are seeking $100 per class member, that concern Rayner so much. 

"There is no indication that any of the consumers involved in any of these cases has been actually harmed by the terms and conditions they are suing over," Rayner said. "We are waiting to see what the court system does with all of these cases."

Since the TCCWNA is a law, any deficiencies in it would have to be fixed at the legislative level, which is precisely what the NJCJI is attempting to do. It has started a petition on its website to send a message to the New Jersey legislature that the TCCWNA needs to be modified to provide some level of protection to businesses in the state. 

 "We think there can be a legislative solution, and we have begun talking with legislators about that," Rayner said. "In the meantime, we are looking to the courts to begin to impose some order around the statute."

The NJCJI does not believe the law needs to be struck down, and it realizes the good intentions behind it. Rayner said that he knows the Legislature meant to protect consumers - it just hasn't worked out that way, he says.

 Many of the businesses facing lawsuits under this law have decided to settle out of court due to the expense of litigation, leading to an increase in cases for this law but no corresponding increase in decisions.

One of the possible causes for the spike in these cases is the application of the law to online businesses that serve New Jersey. 

 "TCCWNA made the jump to the online world in 2013 in the case Shelton v. Restaurant.com, Inc. Since that time, the number of e-commerce related TCCWNA cases has ballooned," Rayner said.

In the end, while it is clear the intent of the law is the protection of consumers, Rayner says things have to change before the law gets abused more. 

"Plaintiffs attorneys are filing an increasing number of TCCWNA-based class actions against companies doing business in New Jersey and elsewhere because the law is poorly written and easy to use as a shakedown against businesses who serve large numbers of consumers," he said.

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