New Jersey Supreme Court to Consider Twin TCCWNA Class Certification Rulings

August 2, 2016 in Client Alerts

By: Peter J. Pizzi

Peter J. PizziThe New Jersey Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA), N.J.S.A.  56:12-14, et seq. went into effect in 1981. After over thirty years on the books, however, the TCCWNA has recently given rise to a wave of consumer class actions. The TCCWNA was enacted to address concerns about consumer contracts, warranties, notices and signs that include provisions which violate consumers’ rights. As a result, the TCCWNA provides that a business may be held liable if it asks a consumer or prospective consumer to enter into a contract, or otherwise gives or displays to a consumer or prospective consumer any warranty, notice or sign, “which includes any provision that violates a clearly established legal right of a consumer.” N.J.S.A. 56:12-15.  The TCCWNA provides consumers with the ability to recover $100 per violation, without the need to establish actual injury, and also provides for recovery of actual damages, attorneys’ fees and costs. N.J.S.A. 56:12-17.

With proof of actual injury not required for a TCCWNA claim, plaintiff class action law firms have filed an increasing number of putative class actions based upon the statute.  In the past year, approximately forty class actions have been filed alleging violations of the TCCWNA against such businesses as Wal-Mart, Target, TOYS ‘R’ US, Burlington Coat Factory, Bed Bath & Beyond, the New Jersey Devils and others. The sudden onslaught of cases has left the courts divided on the requirements for liability under the statute as well as the criteria for class certification.

In late July 2016, the New Jersey Supreme Court granted leave to appeal in two related cases – Dugan v. TGI Fridays, Inc. and Bozzi v. OSI Restaurant Partners, LLC – involving class certification criteria for TCCWNA claims based upon the omission of drink prices on restaurant menus. In Dugan, New Jersey’s intermediate appellate court in March 2016 reversed the trial court and concluded that the putative class plaintiffs failed to meet the class action “predominance” requirement because “individualized inquiries” would be required to determine whether, for example, “each class member was handed a menu that lacked beverage pricing.” 135 A.3d 1003, 1014 (N.J. Super. Ct. App. Div. 2016), petition for leave to appeal granted, A-92-15, No. 077567 (N.J. July 26, 2016). Therefore, the Court concluded that plaintiffs failed to “establish[] that issues of fact common to the members of the class predominate over issues that only affect individual class members.”

Despite apparently similar facts, in the earlier case Bozzi v. OSI Restaurant Partners, LLC, a different appellate panel came to the opposite conclusion, declining to grant a restaurant chain’s appeal from the trial court’s ruling certifying a class of plaintiffs alleging violations of the TCCWNA resulting from drink menus without prices. No. L-001324-11 (N.J. Super. Ct. Law Div. Dec. 16, 2011), petition for leave to appeal granted, A-92-15, No. 077556 (N.J. July 26, 2016).

Faced with opposite outcomes in these similar TCCWNA class action cases, the New Jersey Supreme Court is now poised to address whether “class certification [is] appropriate . . . where plaintiffs allege that defendant violated the [CFA] and the [TCCWNA] by failing to include drink prices on its menu.”  The Supreme Court’s decision in these two appeals will be significant for businesses operating in New Jersey, as it is likely to provide guidance about the criteria for class certification in TCCWNA actions and shape TCCWNA jurisprudence generally.

For additional information, please contact Peter J. Pizzi at (973) 757-1011