Hillary Weinstein of AnapolWeiss. Hillary Weinstein of AnapolWeiss.

For many plaintiffs lawyers practicing in New Jersey, the N.J. Truth-in-Consumer-Contract, Warranty and Notice Act (TCCWNA) ,colloquially pronounced “TIC-wa-na”) had, until recently, provided a way for consumers in class actions to add a count to an already-existing action under the Consumer Fraud Act (CFA). However, a recent ruling may have hamstrung the statute’s punch. Is there any room for TCCWNA’s continued use in class actions, or has the statute seen its day in court?


The N.J. TCCWNA was introduced by the Legislature in 1980 as a way to strengthen provisions of the N.J. CFA by prohibiting a seller, lessor, creditor, lender or bailee from including in a “written consumer contract” any provision that “violates any clearly established legal right of a consumer or responsibility of a seller, lessor creditor, lender or bailee as established by state or federal law …” The act also prohibits provisions generally stating that portions of the contract or notice may be “void, inapplicable or unenforceable in some states,” and instead must specify which provisions are, or are not, void, unenforceable, or inapplicable in New Jersey, see  N.J.S.A. 56:12-16; Kendall v. Cubesmart, No. 15-6098, 2016 WL 1597245 (D. N.J. Apr. 21, 2016). Any person who violates these provisions are liable “to the aggrieved consumer” for a civil penalty of not less than $100 per violation, as well as reasonable attorney fees and court costs.

The bill was meant to address what N.J. legislators saw as a growing trend of business notices or contracts containing provisions that were legally invalid or unenforceable but that deceived consumers into “thinking that they are enforceable and for this reason the consumer often fails to enforce his rights,” see N.J. Legislature Sponsors’ Statement, Statement to Assembly Bill No. 1660 (May 1, 1980). The Legislature provided some examples of types of language that were both invalid but also deceptive: where a provision stated the “seller or lessor is not responsible for any damages caused to a consumer, even when such damages are the result of the seller’s or lessor’s negligence” or when a provision stated “that a lessor has the right to cancel the consumer contract without cause and to repossess its rental equipment from the consumer’s premises without liability for its trespass.”

TCCWNA Cases Rise With the Proliferation of E-commerce

Though largely ignored for decades, the law began to pick up steam in the early 2000s. The New Jersey Civil Institute reports that the number of written decisions on TCCWNA rose from zero in 2002 to approximately 12 in 2009. Plaintiffs class action attorneys were hooked; unlike the CFA, TCCWNA on its face did not require the plaintiff to suffer any actual harm. In 2009, for instance, United Consumer Financial Services v. Carbo, 982 A.2d 7, 22-23 (N.J. Super. 2009) affirmed that TCCWNA claims could be brought as a class action even if the plaintiff has not suffered an ascertainable loss. This allowed the class to include “prospective” customers who did not even make a purchase but might have viewed a retailer’s site.

This TCCWNA trend continued, as e-commerce sites boomed and asset to online terms and conditions became de rigueur to online purchases. The 2013 case of Shelton v. Restaurant.com, 70 A.3d 544 (N.J. 2013) was particularly instructive. In Shelton, the plaintiff purchased 10 gift certificates for $1 to $6 from Restaurant.com (with a face value $25 or $10) for use at various restaurants in New Jersey. Plaintiffs contended that the certificates violated TCCWNA because, in part, they contained generalized provisions that the certificates were “void to the extent prohibited by law” without specifying which provisions might be void in New Jersey, see N.J.S.A. 56:12-16. Significantly, the New Jersey Supreme Court held that certificates or coupons bought online were within the scope of TCCWNA, as both “intangible property” and a “written consumer contract.” Interestingly, the court also confirmed the idea that TCCWNA was “a remedial statute, entitled to a broad interpretation to facilitate its state purpose,” confirming the court’s comfort with its strong stance in support of consumer rights.

Even by 2015, the U.S. Court of Appeals for the Third Circuit continued to hold that actual harm was not necessary to obtain statutory damages under the TCCWNA. In Bohus v. Restaurant.com, 784 F.3d 918, 930 (3d Cir. 2015), a later iteration of the Shelton case, the court reinforced that TCCWNA was put in place by the legislature to impose a civil penalty as a “deterrent,” and that the court “cannot disregard the legislature’s choice to award statutory damages in the absence of actual damages.”

And the TCCWNA damages were significant, decreed as not less than one hundred dollars per violation, despite the fact that the plaintiff’s actual damages could be much less. For instance, in Shelton, the plaintiffs only actually suffered a loss of what they actually paid for the certificates ($1 to $6) or at most, the value of the certificate ($10 to $25).

TCCWNA’s Fall From Grace

However, since 2015, Third Circuit TCCWNA decisions began to fall more in line with Spokeo v. Robins, (136 S.Ct. 1540 (2016)), which held that an individual alleging a website operator published inaccurate information about him in violation of the Fair Credit Reporting Act, could not satisfy the injury-in-fact demands of Article III by merely stating bare procedural violations.  For instance, in Rubin v. J.Crew Group, case, No. 16-2167, 2017 WL 1170854 (D. N.J. Mar. 29 2017), the plaintiff claimed that the terms and conditions on clothing retailer J.Crew’s website violated the TCCWNA in numerous ways, but did not plead any underlying injury that the plaintiff suffered as a result of purchasing the merchandise or using the website. Thus, the court held that the mere fact that J.Crew’s website contained terms and conditions that might deny rights to consumers which are prohibited under New Jersey law, did not mean that the plaintiff suffered any injury as a result of his purchase, and thus the plaintiff had no standing. In other words, a plaintiff needed to be actually injured as a result of the challenged language in the contract or notice.

Then, in Russell v. Croscill Home, No. 3:16-cv-0119, 2016 WL 6571278 (D.N.J. Oct. 11, 2016), the federal court also dismissed a plaintiff’s complaint for failure to state a claim under TCCWNA because the plaintiff did not allege that the product he purchased was defective, that he was injured, or that he had even read the allegedly violative terms and conditions on the website.

But it was not until April of this year that the New Jersey Supreme Court itself finally struck a resounding blow to TCCWNA, especially in the class action context. In Spade v. Select Comfort, No. 078611 (N.J. Apr. 16, 2018), two putative class actions brought by sellers in state court for violations of TCCWNA were removed to federal court and dismissed. In both cases, plaintiffs had brought suits against a furniture company because their sales contracts omitted or violated language required by the New Jersey Delivery of Household Furniture and Furnishing Regulations, despite the fact that the plaintiffs’ own furniture was delivered without delay. The court unanimously held, in part, that a consumer who receives a contract that does not comply with the Furniture Delivery Regulations but has not suffered any adverse consequences from the noncompliance, is not an “aggrieved consumer” under the TCCWNA. Thus, though still purporting to recognize the punitive nature of TCCWNA, by now requiring definitive harm the court eviscerated the statute’s teeth. And why? Perhaps the court was simply persuaded by years of defense attorneys, claiming the law threatened the state’s innocent merchant.

However, the court still left open the possibility that a plaintiff could be aggrieved even if he did not experience “monetary harm”: one example is if a seller failed to timely deliver goods, and the consumer would have sought a refund but had been deterred by the contract’s “no refunds” language, that customer could still be “aggrieved.” Or, perhaps the consumer’s furniture was delivered after a family gathering (for which it was needed). Either case however, is extremely individualized, and it is difficult to imagine uniform classwide damages that would make such a case suitable for class certification.

Such a case would have to involve a situation where every potential plaintiff read the terms of conditions or contract and were all injured in some similar way. Though cases like this may certainly exist, ascertainability of the class still remains an issue in the New Jersey federal courts (though, according to Daniels v. Hollister, 113 A.3d 796 (N.J. Super. 2015), may not be as much of an issue in New Jersey state court).

Yet, even if such a classwide, nonmonetary injury could exist, the New Jersey Legislature has already taken steps to further send TCCWNA to its grave: in January of this year it introduced a bill to definitively require consumers to suffer an “ascertainable economic loss” before filing a class action lawsuit under TCCWNA, and also required consumers suffering an economic loss of $250 or less to first request reimbursement from the retailer.

Hillary Weinstein joined Anapol Weiss as an associate in 2017. Her practice focuses primarily on appellate advocacy, consumer class actions, and complex commercial and personal injury litigation in Philadelphia.