As the principal home to many large corporations, and with treble damages available under the New Jersey Consumer Fraud Act (NJCFA), New Jersey has quickly become a preferred venue among plaintiffs counsel commencing nationwide consumer fraud class actions. However, New Jersey district courts have disagreed over whether New Jersey’s conflict of laws rules require the application of the NJCFA or the consumer fraud statutes of the plaintiff’s home state where the allegedly defective product was purchased outside New Jersey. A majority of those courts faced with this issue now hold that the law of the state in which the product was purchased should apply. This issue may have a meaningful impact on the number of nationwide consumer fraud class action suits venued in the District of New Jersey, because requiring the application of the laws of the 50 states presents a barrier to class certification.
New Jersey district courts sitting in diversity apply New Jersey’s “most significant relationship test” to choice of law issues. The most significant relationship test consists of two prongs: (1) a substantive comparison of the laws of the states to determine whether a conflict exists, and if there is no conflict, then the law of the forum state applies; but (2) if there is a conflict between the states, then the court must apply the factors enumerated in the Restatement (Second) of Choice of Laws. New Jersey district courts agree that there is a significant conflict between the NJCFA and the laws of other states, and, accordingly, an analysis of choice of law is necessary.
