The New Jersey Supreme Court found that a consumer must suffer actual adverse consequences from an alleged violation of New Jersey’s Truth in Consumer Contract, Warranty and Notice Act (“TCCWNA”) in order to bring suit under the act — although such adverse consequences don’t have to be monetary. The ruling from New Jersey’s highest court — which follows a number of federal court decisions reaching a similar conclusion (based on federal procedural law) — makes the TCCWNA a less enticing vehicle for class action attorneys seeking to capitalize on immaterial errors in companies’ customer agreements or terms of service.
The matter, referred to the New Jersey Supreme Court by the United States Court of Appeals for the Third Circuit, involved furniture sale contracts that failed to conform to New Jersey Furniture Delivery Regulations, which require that certain language appear in all furniture contracts. The plaintiff claimed that such failure violated the TCCWNA, which seeks to impose liability for contracts that violate a consumer’s already-established legal right. The New Jersey Supreme Court first found that an alleged violation of state regulations was enough to constitute the violation of a “clearly established right” under the TCCWNA. The court rejected the argument that inclusion or omission of language in a contract or agreement must violate a state or federal statute in order to form the basis for a TCCWNA claim.
The court went on, however, to find that the plain text of the TCCWNA requires a consumer to suffer some adverse consequences from any such violation in order to bring suit under the statute. In doing so, the court pointed to the statute’s use of “aggrieved consumer” in its remedial provision (which states that a person that violates the act shall be liable to “the aggrieved consumer” for a civil penalty of not less than $100 or actual damages). The court did not agree that any customer who enters into an agreement that violates existing law is “aggrieved”, whether or not he consequently suffered harm. The court reasoned that if “aggrieved consumer” were understood to cover any consumer to whom a contract or writing was offered, the word “aggrieved” would be superfluous.
With that said, the court made clear that the required adverse consequences do not need to involve monetary damages. The court explained that if the furniture seller failed to timely deliver a consumer’s furniture and the consumer would have sought a refund had he not been deterred by the offending “no refunds” language, that could be enough to make him “aggrieved.” Untimely delivery and improper “no refunds” language leaving a consumer without furniture for a family outing could also render the consumer “aggrieved.”
The bottom line for companies after this decision is that violating a state regulation is enough to trigger potential TCCWNA liability, but in order for a person to bring suit for such violation, they must have suffered some actual adverse consequence beyond a mere violation of the regulation, although that consequence need not be something that can be cured by monetary damages.