By now, many retailers have heard of New Jersey’s Truth in Consumer Contract, Warranty and Notice Act, N.J.S.A. §56:12-18 (“TCCWNA”), which is the basis for several class action lawsuits filed in New Jersey state and federal courts. In these cases, plaintiffs typically allege that the TCCWNA provides standing to sue for alleged violations resulting from disclaimers, limitations of liability, and other terms on websites, in contracts, or that are incorporated in any type of written notice. The broad language of the statute arguably makes it applicable to any consumer-facing material – even restaurant menus.
On July 26, 2016, the New Jersey Supreme Court granted leave to appeal in two TCCWNA cases to determine whether restaurants violate state consumer laws when they fail to list cocktail prices on their menus. Although a class was initially certified in both cases, the appellate division subsequently decertified the class in Dugan v. TGI Fridays, Inc., 135 A.3d 1003, 445 N.J. Super. 59 (N.J. Super. Ct. App. Div. 2016), petition for leave to appeal granted, No. M-1421, September Term 2015, 2016 BL 251133 (N.J. July 20, 2016), on the basis that the customers failed to establish that common issues of fact predominated over issues pertaining to individual customers. Id. at 1014-1015. The restaurant patrons brought a class action against TGI Friday’s, Inc. alleging violations of the TCCWNA and New Jersey’s Consumer Fraud Act, N.J.S.A. 56:8-19, based on the failure to include prices for beverages on the menu. Id. at 1006.
In considering TGI Friday, Inc.’s motion to decertify the class, the Superior Court of New Jersey determined that “[i]ndividualized inquiries would be required to determine whether each class member was handed a menu that lacked beverage pricing.” Id. at 1014. In addition, the court reasoned that “…claims for actual damages would necessarily involve individual inquiries to determine whether each class member sustained a loss caused by the absence of beverage pricing on TGIF’s menus.” Id. Based on this reasoning, the court determined that the plaintiffs could not establish that the issues of fact common to the members of the class predominate over issues that only affect individual class members. Id.
The ruling in Dugan was a favorable precedent for putative class action defendants facing TCCWNA claims, because although the plaintiffs’ individual claims could proceed, TGI Friday, Inc.’s potential exposure to liability would be substantially reduced without a certified class. However, under a similar set of facts, the appellate division declined to consider defendant’s appeal of class certification in Bozzi v. OSI Rest. Partners, LLC, No No. M-1422, September Term 2015, 2016 BL 251861 (N.J. July 20, 2016), in connection with the failure to list cocktail prices on the menu.
Thus, the New Jersey Superior Court reached two different outcomes in class action cases involving similar allegations that restaurants violated state consumer laws when they failed to list cocktail prices on their menus. In order to address this conflict, the New Jersey Supreme Court agreed to determine whether or not class certification is appropriate in both Dugan and Bozzi when plaintiffs claim that the defendants violated the TCCWNA and New Jersey’s Consumer Fraud Act by failing to include prices for beer and mixed drinks on the menu. In Dugan, the New Jersey Supreme Court will also consider the additional issue of whether charging different prices for the same beverage, depending upon where in the restaurant the beverage was served, violates the TCCWNA and New Jersey’s Consumer Fraud Act.
We will be closely watching the New Jersey Superior Court’s rulings in these cases, as the New jersey Supreme Court's decisions in these cases will have a significant impact on the potential exposure retailers could face in connection with TCCWNA claims. These decisions will likewise have a significant impact on the incentive of the plaintiffs’ bar in continuing to pursue TCCWNA class action claims.
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