New Jersey Decision Could Slow TCCWNA Actions

by Manatt, Phelps & Phillips, LLP
Contact

Manatt, Phelps & Phillips, LLP

In a victory for defendants, the New Jersey Supreme Court ruled that a plaintiff must suffer actual harm from an allegedly unlawful provision in a contract or notice to be an “aggrieved” party under the state’s Truth in Consumer Contract, Warranty and Notice Act (TCCWNA).

Businesses have faced a rash of consumer class actions after an appellate court in the state released a plaintiff-friendly interpretation of the statute in December 2015. The new opinion, answering certified questions from the U.S. Court of Appeals, Third Circuit, may help turn the tide.

Two cases involving married couples suing furniture companies were consolidated after both sets of plaintiffs alleged violations of the TCCWNA. Specifically, the plaintiffs purchased furniture and claimed that the sales contracts provided by the retailers did not include language regarding the delivery of household furniture as mandated by regulations promulgated under the state’s Consumer Fraud Act.

Although both couples had their furniture delivered in a timely fashion, they pointed to the deficient contracts as the basis of their TCCWNA lawsuit. The statute, found at N.J.S.A. Section 56: 12-14, states that a seller may not enter into a written contract that “includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller … as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed.” The law provides a penalty of $100 per violation.

A district court judge granted the defendants’ motion to dismiss the suits and the plaintiffs appealed to the Third Circuit, which certified two questions to the state’s highest court. First, does a violation of the Furniture Delivery Regulations alone constitute a violation of a clearly established right or responsibility of the seller under the TCCWNA and thus provide a basis for relief under the TCCWNA?

Second, is a consumer who receives a contract that does not comply with the Furniture Delivery Regulations, but has not suffered any adverse consequences from the noncompliance, an “aggrieved consumer” under the TCCWNA?

The New Jersey Supreme Court answered the first question in the affirmative and the second in the negative. While a violation of an underlying regulation may trigger a cause of action for a consumer, he or she must be “aggrieved” in order to obtain a remedy under the TCCWNA, the court explained.

The statute does not define the term “aggrieved consumer,” but the court said the legislature clearly intended to differentiate the term from a “consumer,” which is defined and used separately in the TCCWNA. The court interpreted the word “aggrieved” “so as to give it significance; it distinguishes consumers who have suffered harm because of a violation of [the TCCWNA] from those who have merely been exposed to unlawful language in a contract or writing, to no effect.”

The term “aggrieved consumer” denotes “a consumer who has suffered some form of harm as a result of the defendant’s conduct,” the unanimous court wrote, although the harm is not limited to injury compensable by money damages. In the context of furniture delivery, this harm could be leaving a consumer without the furniture needed for a family gathering, for example.

“In the setting of these appeals, if a consumer has entered into a sales contract containing a provision that violated [the Furniture Delivery Regulations], but his or her furniture was delivered conforming and on schedule, and he or she has incurred no monetary damages or adverse consequences, that consumer has suffered no harm,” the court said. “Such a consumer is not an ‘aggrieved consumer’ under [the TCCWNA].”

To read the opinion in Spade v. Select Comfort Corp., click here.

Why it matters: For defendants coping with the onslaught of TCCWNA litigation, the decision could prove to be a boon. While the court found that a regulatory violation may form the basis for a claim under the statute, it eliminated the prospect of cases based simply on missing contract language when it made clear that a consumer must suffer some form of harm as a result of the defendant’s conduct.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Manatt, Phelps & Phillips, LLP | Attorney Advertising

Written by:

Manatt, Phelps & Phillips, LLP
Contact
more
less

Manatt, Phelps & Phillips, LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.