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August 24, 2017 by Susana Cruz HodgeDownload PDF

The TCCWNA Saga ContinuesSusana  Cruz Hodge

As we wait for the Supreme Court to provide some much needed guidance on the Truth-in-Consumer, Contract, Warranty and Notice Act, N.J.S.A. 56:12-14 et seq. (“TCCWNA”), the district courts in the Third Circuit continue to dismiss TCCWNA claims on standing grounds. Earlier this month, in Pasciolla v. General Nutrition Centers, Inc., No. CV-16-1313, 2017 WL 3412146 (W.D. Pa. Aug. 8, 2017), Judge Hornak joined Judges Wolfson, Hillman, and Simandle in finding that a plaintiff lacks standing to bring a TCCWNA claim where she (1) does not allege dissatisfaction with the purchase, or (2) cannot identify a harm other than informational injury. See also Rubin v. J. Crew Grp., Inc., No. CV 16-2167, 2017 WL 1170854 (D.N.J. Mar. 29, 2017), Murray v. Lifetime Brands, Inc., No. CV 16-5016, 2017 WL 1837855 (D.N.J. May 8, 2017), Hite v. Lush Internet Inc., No. CV 16-1533, 2017 WL 1080906 (D.N.J. Mar. 22, 2017).

As in Rubin, Murray, and Hite, the plaintiff in Pasciolla purchased a product on defendant’s website, but did not allege that she was dissatisfied with her purchase, that the T&C deceived her or that the T&C prevented her from asserting any of her rights. As a result, the District Court found that plaintiff failed to allege an “injury in fact” and thus lacked constitutional standing, citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).

Plaintiff had urged the court to apply the two-step test adopted by the Third Circuit in Susinno v. Work Out World Inc., 862 F.3d 346 (3d Cir. 2017), and In re Horizon Healthcare Services Data Breach Litig., 846 F.3d 625 (3d Cir. 2017), which demands a determination of whether (1) a party is suing “under a statute alleging the very injury [the statute] is designed to prevent”, and (2) “the injury has a close relationship to a harm.” However, Judge Hornak refused to do so because:

In Susinno, the plaintiff received a call to her cellphone that she alleged was, among other things, a nuisance and an invasion of her privacy. To put it plainly, the plaintiff did not just allege a procedural violation of a statute—she alleged that the violation of a statue had actually affected her tangible (and statutorily-considered) interests in a concrete manner. In contrast, in this case, the Plaintiff has alleged only a procedural violation of the TCCWNA, namely the existence of the T&C. She has not alleged that the T&C affected her at all or even that she was aware of its provisions at or near the time of her purchase.
This was the Court’s second reference to the fact that the plaintiff had neither read nor was aware of the contract provisions at issue, without recognizing that the TCCWNA expressly prohibits businesses from

offer[ing] to any consumer or prospective consumer or enter into any written consumer contract or give or display any written consumer warranty, notice or sign after the effective date of this act 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. . . ”

N.J.S.A. 56:12-15
(emphasis added). By shifting the focus away from the defendant’s conduct, the court essentially rewrote the TCCWNA and ignored the Legislature’s clear intent to redress pure informational injury by providing a remedy even when a plaintiff does not suffer actual damages. As an Assembly report stated:

Section 4 [now 17], as amended by the committee, provides that a business which violates the provision of this bill would be liable to the aggrieved consumer for a civil penalty of not less than $100.00 if the consumer was not injured by such a violation and for a civil penalty and actual damages if he was injured by such a violation.

Assemb. B. 1660, 199th Leg., 1st Sess. (N.J.) (as reported by Assemb. Commerce, Indus. & Professions Comm., June 9, 1980) (emphases added).

Given the clear language of the TCCWNA and its legislative history, it is puzzling that the District Court distinguished this case from Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982), where the United States Supreme Court found that individuals who never intended to buy or rent an apartment had standing to sue under the Fair Housing Act because they were denied their right to truthful information when real estate agents provided false information. While it is true that the cases differ in that the plaintiffs in Haven Realty Corp. were given false information and Pasciolla did not read the terms and conditions, that reasoning ignores the reasoning underlying the Supreme Court’s ruling on standing:

As we have previously recognized, “‘[t]he actual or threatened injury required by Art. III may exist solely by virtue of ‘statutes creating legal rights, the invasion of which creates standing....’” Section 804(d), which, in terms, establishes an enforceable right to truthful information concerning the availability of housing, is such an enactment. A tester who has been the object of a misrepresentation made unlawful under § 804(d) has suffered injury in precisely the form the statute was intended to guard against, and therefore has standing to maintain a claim for damages under the Act's provisions.

I have no doubt the Supreme Court of New Jersey will address the express language of the TCCWNA and its legislative history in its forthcoming decisions in Spade v. Select Comfort Corp. and Wenger v. Bob’s Discount Furniture, LLC, and I look forward to the Supreme Court reconciling its reasoning with that of Susinno, Horizon, and Havens Realty Corp.