The New Jersey Supreme Court issued an important decision on the scope of the New Jersey consumer protection statute called the Truth-in-Consumer Contract, Warranty and Notice Act or TCCWNA.

The two class action matters involved allegations that Select Comfort Corp. and Bob’s Discount Furniture violated the TCCWNA by failing to include, among other things, specific language regarding a consumer’s right to cancel an order as a result of delayed delivery. The Supreme Court held that a violation of this regulation could constitute a violation of a “clearly established legal right or responsibility of sellers” to constitute a violation of TCCWNA.

Separately, and of broader significance, the Supreme Court was asked whether a consumer must suffer an actual adverse consequence to be entitled to the statutory minimum penalty of $100 per person provided by the TCCWNA.  None of the plaintiffs in either of the cases had alleged that they suffered any actual harm, monetarily or otherwise, from the defendants’ technical violations of the regulations. The question before the Court was whether these plaintiffs could be considered “aggrieved consumers” to qualify for TCCWNA’s statutory penalties.

Analyzing the statutory language, the unanimous Supreme Court noted that certain sections of the TCCWNA use the term “consumers” whereas the term “aggrieved consumer” was used in the section of the TCCWNA discussing damages. The addition of the term “aggrieved” before “consumer,” the Court held, must be given meaning and, under a plain reading of this word, denotes the plaintiff’s suffering some actual harm, even non-monetary harm.  As an example of the type of harm that may be sufficient to render a consumer “aggrieved” under the TCCWNA, the Supreme Court hypothesized a potential furniture seller customer who contends he would have sought a refund after a late furniture delivery but did not because of a company’s “no refund” statement (in violation of the regulation).

The Supreme Court’s decision will likely impact the uptick in putative class actions filed by consumers under TCCWNA. In addition to reducing the number of individuals who might be entitled to TCCWNA statutory damages, the decision will also make it more difficult for consumers to maintain class actions since each class member potentially must demonstrate that they suffered an “adverse consequence.”