Lowenstein Sandler Advocates to Reduce Abusive Consumer Class Actions Harming New Jersey Businesses

On Monday, June 19, we filed an amicus brief in the New Jersey Supreme Court in connection with the appeal of Spade et al. v. Select Comfort Corporation et al. and Wenger et al. v. Bob's Discount Furniture, LLC. The appeal concerns one of the many class actions under the Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA), a law originally intended to protect consumers from contracts that mislead them as to their legal rights. In recent years, plaintiffs' lawyers have trolled for standard-form contracts and notices, hoping to find a technical violation that allows them to seek a $100 civil penalty for every consumer subject to the contract or notice under TCCWNA, even when no one suffered any adverse consequences. This has resulted in a dramatic increase in the number of TCCWNA class actions, which exposes New Jersey businesses to abusive and costly lawsuits.

To help reduce the number of these cases and the negative effects on New Jersey businesses, our brief urges the Court to address and clarify who has statutory standing to sue under TCCWNA by defining an "aggrieved consumer" as someone who has been adversely impacted by the challenged provision in a contract or notice. It argues:

• A consumer who never read, cared about, or was adversely impacted by an allegedly illegal provision is not "aggrieved" within the meaning of the statute; and
• An aggrieved consumer should be defined as someone adversely affected by the complained-of provision – meaning, at least, that the consumer read the challenged provision and was misled as to his or her legal rights in a material way.

A Supreme Court decision adopting our definition of "aggrieved consumer" as one who was adversely impacted by the TCCWNA violation in a material way would substantially curtail abusive TCCWNA class actions and mitigate the "gotcha" litigation currently clogging our courts and burdening our businesses.

The amicus brief was filed on behalf of the New Jersey Civil Justice Institute (NJCJI), a bipartisan, statewide group comprising small businesses, individuals, and not-for-profit groups, and many of New Jersey's largest business associations and professional organizations. NJCJI advocates for a civil justice system that treats all parties fairly, and has a strong interest in the clear, predictable, and fair application of the law as it concerns the broader civil justice implications that cases may have on professionals, sole proprietors, and businesses in New Jersey.