The Flood of Class Actions Under NJ's TCCWNA

Enacted over three decades ago, New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act, N.J.S.A. 56:12-14 to -18 (TCCWNA), sat largely unnoticed by the plaintiffs bar until recently. But in the past couple of years, scores of putative class actions have been filed alleging violations of TCCWNA against a broad array of businesses such as Wal-Mart, Target, J. Crew, Select Comfort, Burlington Coat Factory, Toys “R” Us, Bed Bath & Beyond, TGI Friday’s, Johnston & Murphy, Whirlpool, and Bob’s Discount Furniture. TCCWNA’s broad reach has been found to encompass nearly every form of written consumer contract, warranty, notice, advertisement or sign that is displayed, offered, or entered into with a consumer or potential consumer—from restaurant menus to in-store displays to website terms and conditions of use. And the statute’s penalty of at least $100 per violation, coupled with its fee-shifting ­provision, makes it attractive for the class-action bar and dangerous for ­businesses with substantial customer contacts, since alleged damages could rapidly rise into the millions or tens of millions of dollars. Whether it’s a brick-and-mortar retailer in New Jersey or an internet business marketing to New Jersey consumers, TCCWNA could be a pricey trap for unwary enterprises. New Jersey state and federal courts, the U.S. Court of Appeals for the Third Circuit and courts elsewhere are grappling with novel issues arising under TCCWNA, and potentially important decisions are pending.

What TCCWNA Prohibits

This short little statute—its five sections would take up less than a page of text—prohibits two general categories of conduct. Section 15 prohibits sellers from offering, displaying or entering into “any written consumer contract … warranty, notice or sign … which includes any provision that violates any clearly established legal right of the ­consumer or ­responsibility of a seller … as established by a state or federal law.” Consequently, businesses need to be aware that restricting or undermining any clearly established independent right of consumers, or obligation of sellers, could violate TCCWNA. Sources of clearly established legal rights are as broad as the mind can imagine, but the plaintiff must identify which clearly established legal right has been violated; a plaintiff cannot pursue a TCCWNA claim unless she can show both a clearly established legal right and its violation, as in McGarvey v. Penske Auto Group, 486 Fed. Appx. 276 (3d Cir. 2012) and in Perrotta v. LG Electronics USA, (D.N.J. Aug. 15, 2013). Notably, TCCWNA doesn’t create any new rights; rather, it’s a means of enforcing other existing consumer rights, as in Watkins v. DineEquity, 591 F. App’x 132 (3d Cir. 2014).