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A federal judge in Trenton has tossed out a potential class action against retailer Forever 21 under New Jersey’s Truth in Consumer Contract, Warranty and Notice Act based on the state Supreme Court’s recent definition of an aggrieved consumer.

In Patterson v. Forever 21, plaintiff Tifany Patterson purchased a necklace and a pair of sunglasses from the Forever 21 website. Patterson claimed she and class members were entitled to relief under TCCWNA because they purchased items from Forever 21 and because its website contains language that violates New Jersey law.

Patterson sought a civil penalty of at least $100 for each class member, but U.S. District Judge Michael Shipp ruled Patterson did not meet the definition of “aggrieved consumer” under Spade v. Select Comfort, which the justices held to be someone who was harmed by a violation of TCCWNA.

Patterson’s lawsuit said Forever 21 imposes “unfair, one-sided provisions” in its terms and conditions, a violation of TCCWNA. She said the terms and conditions deprive her of a cause of action for any unforeseeable risk of harm, and purports to absolve Forever 21 of its legal responsibility to exercise due care and refrain from creating an unreasonable risk of harm to consumers.

The disclaimer also violates New Jersey’s Punitive Damages Act because it purports to bar the plaintiff from seeking punitive damages for any harm caused by Forever 21, the lawsuit claimed.

Enacted in 1980, TCCWNA bars language in consumer contracts that violates any clearly established legal right. The measure drew little attention until around 2015, when plaintiffs lawyers began filing lawsuits to target provisions in e-commerce terms of service.

In the Forever 21 case, Shipp granted the defendant’s motion in February 2017 to stay the case pending outcome of an appeal in another TCCWNA case before the U.S. Court of Appeals for the Third Circuit, Russell v. Croscill Home. In that case, another judge threw out the suit because the plaintiff suffered no concrete harm. But the anticipated guidance from that case never materialized because it was dismissed after the parties filed a stipulation of dismissal.

Without guidance from the Third Circuit, Shipp said the Supreme Court’s April 2018 decision in Spade also addressed the meaning of the term “aggrieved consumer.”

The federal court’s jurisdiction in the case is conferred by the Class Action Fairness Act, which requires the plaintiff to plead a minimum of $5 million. But if the plaintiff is not an “aggrieved consumer” under TCCWNA, she can’t satisfy the minimum amount in controversy under CAFA, Shipp said.

“Plaintiff’s contention that defendant’s alleged violations of certain New Jersey laws, without any alleged harm arising from the violations, entitles her to relief under the TCCWNA is vitiated by the New Jersey Supreme Court’s holding in Spade,” Shipp wrote.

Because Patterson did not have the benefit of Spade when she filed her complaint, Shipp said she would be allowed to file an amended complaint.

Gerald Clark of the Clark Law Firm in Belmar said in an email that, “Upon initial review it appears that Judge Shipp has provided a well-reasoned opinion that strikes an effective balance between adhering to recent precedents while ensuring fair consumer protections within the current, limited statutory framework. We are reviewing the matter further to determine our next steps.”

Joseph Jean of Pillsbury Winthrop Shaw Pittman, who represented Forever 21, did not return a phone call seeking a comment.

Charles Toutant

Charles Toutant is a litigation writer for the New Jersey Law Journal.

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