NEWARK, N.J. (Legal Newsline) - A recent class action lawsuit filed against
Facebook Inc. in connection with the social media site’s requirement that
users agree to the company’s conditions is one of many suits being filed under
New Jersey’s Truth-in-Consumer, Contract Warranty and Notice Act (TCCWNA).
The TCCWNA was enacted in 1981, but its popularity among
plaintiffs’ attorneys has increased recently, often with online retailers as
its targets. The act was designed to curb a practice under which consumer
contracts, warranties, notices and signs include “provisions which clearly
violate the rights of consumers.”
Loly G. Tor, a partner at K&L Gates LLP, said companies
named as defendants in the recent spate of class actions brought against online
retailers are filing motions to dismiss.
Tor said the companies are arguing that the claims should be
dismissed because of lack of standing under the U.S. Supreme Court's decision in Spokeo Inc. v. Robins, because the
plaintiff is not an aggrieved consumer, because TCCWNA does not apply to a
website’s terms and conditions, because there is no violation of clearly
established law, and because New Jersey law does not apply under a choice-of-law
provision in the terms and conditions, among other reasons.
Spokeo required plaintiffs to prove a concrete and particularized harm.
Tor said defendants have had some success in getting TCCWNA
lawsuits dismissed, although the motions to dismiss in some of the website
cases are still pending.
“In recent motions decided in non-website cases, defendants have
been successful in arguing that the plaintiff was not a consumer (Smerling v. Harrah’s Casino), and that
an omission cannot form the basis of a TCCWNA claim (Matijakovich v. PC Richard & Son),” Tor told Legal Newsline.
Whether the Spokeo decision actually helps a defendant’s
case is less clear.
The plaintiff in the lawsuit filed against Spokeo alleged
that the company violated the Fair Credit Reporting Act. After an initial
dismissal was overturned, Spokeo appealed to the Supreme Court, which remanded
the case to decide whether the harm allegedly
suffered by plaintiff Thomas Robins was enough for the case to proceed.
“(Whether Spokeo will help defendants’ cases) remains to be
seen,” Tor said. “Plaintiff and defense attorneys both declared victory after
Spokeo was decided. This issue is pending in several cases, so we will have an
answer (or several answers soon)."
Tor said defendants argue that a statutory violation with no
actual harm to the plaintiff does not confer standing because there is no
concrete harm, while plaintiffs say the exact opposite -- that the violation of
the statute itself is the concrete harm that confers standing.
“However, if actions are dismissed based on Spokeo, the
victory for defendants may be short-lived because plaintiffs will be able to
refile their suits in state court,” she said. “A dismissal for lack of standing
is not a dismissal on the merits and Spokeo addresses only Article III
standing, not standing in New Jersey state court.”
Depending on how the New Jersey Supreme Court rules on the
class certification issues in the two TCCWNA cases pending before it, including
Dugan v. TGI Fridays Inc. and Bozzi v. OSI Restaurant Partners LLC,
Tor said defendants in a less desirable situation than if they had remained in
In addition, the nature of potential awards for plaintiffs
may be a driving factor behind the recent upswing in TCCWNA lawsuits.
“TCCWNA provides statutory damages of $100 per violation
plus actual damages and attorneys’ fees,” Tor said.