In 1981, New Jersey enacted the Truth in Consumer Contract, Warranty and Notice Act (the “TCCWNA”), N.J.S.A. §§ 56:12-14 to 12-18. Although the law languished in relative obscurity for decades, there has been a widely-discussed uptick recently in putative class actions invoking the TCCWNA. The TCCWNA broadly prohibits any:
offer to any consumer or prospective consumer or enter[ing] into any written consumer contract or giv[ing] or display[ing] any written consumer warranty, notice or sign . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee 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.
N.J.S.A. § 56:12-15.
The successful “aggrieved consumer” may elect to receive a statutory penalty of “not less than $100.00 or . . . actual damages, or both” and may also receive “reasonable attorney’s fees and court costs.” N.J.S.A. § 56:12-17. In a putative class action, the plaintiff almost invariably chooses the statutory $100, usually flatly denying that he or she has any “actual damages.” Often, the plaintiff affirmatively states the he or she has not even read the allegedly offending contract or notice. Can such a person be “aggrieved” by a violation of the TCCWNA?
Two pending appellate cases promise to bring some needed clarity.
On November 23, 2016, the United States Court of Appeals for the Third Circuit asked the New Jersey Supreme Court two questions under its Local Appellate Rules, Internal Operating Procedures, and New Jersey Court Rule 2:12A-1 concerning the TCCWNA. The appeals giving rise to the certified questions are Spade v. Select Comfort Corp., Nos. 16-1558, and Wenger v. Bob’s Discount Furniture, 16-1572. Spade and Wenger alleged violations of New Jersey’s Delivery of Household Furniture and Furnishings regulations, which govern, among other things, promised delivery dates and the required typeface in related disclosures. Despite allegedly failing to comply with the regulations, Spade’s and Wengers’s furniture was delivered on time. The federal district court dismissed both suits on the ground that the plaintiffs were not “aggrieved consumer[s]” under the TCCWNA, given that they had suffered no ill effects from the alleged regulatory lapses. On appeal, plaintiffs argued that because the TCCWNA allows recovery of statutory damages or actual damages, they must be allowed to recover the statutory amount even when they have suffered no harm. The logic of that argument is less than perfect. Legislatures may provide statutory damages for an injury that is small or difficult to measure without necessarily intending to authorize awards of statutory damages where harm is nonexistent. So it is at least possible to read the word “aggrieved” to connote “having an actual injury” without rendering meaningless the statutory damages provision.
The federal appeals court certified the following questions:
- 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?
- 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 provides a basis for relief under the TCCWNA?
On April 4, 2017, the New Jersey Supreme Court, agreed to answer those two questions exactly as certified to it. Briefing is underway. The answer to the first question may also bear upon the future implementation in TCCWNA cases in federal courts of the Supreme Court’s recent decision in Spokeo v. Robins, 136 S.Ct. 1540 (2016), holding that a “bare procedural violation” will not provide standing. If the New Jersey Supreme Court decides that a “bare procedural violation” serves to “aggrieve” consumers, many more of these suits may end up in state court.
Consumer-facing companies doing business in New Jersey, especially web-based business, will want to pay close attention to the outcome and seek timely advice on protecting against liability.