New Jersey Supreme Court: Cell Phone Users Have Privacy Interest In Cell Phone Location Information

by: Peter J. Gallagher

The New Jersey Supreme Court ruled today that police cannot access the location information revealed by your cell phone without first acquiring a warrant based on probable cause. In State v. Earls, police were investigating a string of burglaries. A court-ordered trace of a cell phone stolen in one of the burglaries led them to an individual at a bar in Asbury Park who told them that his cousin had sold him the phone. The individual also told police that his cousin was involved in the burglaries and kept the stolen items in a storage locker that was rented by his cousin or his cousin’s girlfriend. The next day, police located the girlfriend, went with her to the locker, and found various stolen items. The next day, police learned that the girlfriend had disappeared, and that defendant had threatened her when he learned that she was cooperating with police. After obtaining an arrest warrant for defendant, police began to search for him. As part of this search, the police contacted T-Mobile to obtain information about the location of a cell phone that they believed defendant had been using. This information eventually led them to a motel where defendant and his girlfriend were staying.

Defendant was arrested and eventually indicted on several charges stemming from the burglaries. He moved to suppress evidence seized at the motel where he was apprehended. The trial court denied the motion, holding that police should have obtained a warrant before tracking defendant’s phone, but that the information was nonetheless admissible under the emergency aid exception to the warrant requirement (the emergency being the threat to defendant’s girlfriend’s safety). Defendant pled guilty but appealed the suppression ruling. The Appellate Division affirmed, but on different grounds, holding that defendant had no reasonable expectation of privacy in his cell phone location information.

The Supreme Court reversed. It began by discussing the advances in cell phone technology that now make it possible for providers to pinpoint the location of a cell phone within a matter of feet, and the fact that details about the location of a cell phone can provide an intimate picture of an individual’s personal life by revealing where people go and with whom they affiliate. Under New Jersey law, individuals do not lose their right to privacy simply because they have to provide personal information like this to third parties to obtain services. Thus, cell phone users reasonably expect that the private information that they (or, perhaps more accurately, their phones) transmit to cell phone providers about their location will remain private:

[C]ell phones are not meant to serve as tracking devices to locate their owners wherever they may be. People buy cell phones to communicate with others, to use the Internet, and for a growing number of other reasons. But no one buys a cell phone to share detailed information about their whereabouts with the police . . . Citizens have a legitimate privacy interest in such information. Although individuals may be generally aware that their phones can be tracked, most people do not realize the extent of modern tracking capabilities and reasonably do not expect law enforcement to convert their phones into precise, possibly continuous tracking tools.

Accordingly, before police can obtain this information from a cell phone provider, they must obtain a warrant based on a showing of probable cause or qualify for an exception to the warrant requirement.

In its decision, the Supreme Court noted that federal courts are split on whether a warrant is required before police can obtain information about an individual’s cell phone location. However, it also noted that the New Jersey Constitution generally provides greater protection against unreasonable searches and seizures that the Fourth Amendment. This decision further emphasizes the differences between New Jersey law and federal law, particularly as it relates to information that is revealed to third parties.

Another Reminder That Even When You Win You Still Lose Under The New Jersey Consumer Fraud Act

by: Peter J. Gallagher

The Appellate Division issued an unpublished decision today that again emphasizes the power (some might say, inequity) of the New Jersey Consumer Fraud Act. In Logatto v. Lipsky, plaintiffs hired defendant to build an addition on their home and perform other renovations. Although defendant prepared a written proposal with cost estimates, he never prepared a written contract. After the project was 90% complete, and plaintiffs had paid him $247,500, defendant notified plaintiffs that actual expenses exceeded the proposed costs, and therefore he required an additional $78,469.37 to complete the project. Plaintiffs refused and, when the parties could not come to a resolution on the issue, defendant left the job. Plaintiffs then sued defendant under the Consumer Fraud Act for the costs of completion of the project, and defendant counterclaimed for $50,000 in unpaid costs. Both parties moved for summary judgment, but both motions were denied.

The case was tried to a jury. After plaintiffs put on their evidence, they moved for judgment on liability in connection with their Consumer Fraud Act Claims. The trial court granted the motion, finding that there were technical violations of the Act (failure to have a signed contract and change orders). However, the trial court left the question of whether plaintiffs had suffered an "ascertainable loss," a requirement under the Consumer Fraud Act, to the jury. The jury ultimately returned a verdict in favor of defendant, finding that plaintiffs did not suffer any ascertainable loss. After the verdict, however, plaintiffs moved for, among other things, fees and costs under the Consumer Fraud Act. The trial court denied the motion, but the Appellate Division reversed the trial court and remanded the issue back to the trial court for disposition of the fee motion.

You may be asking yourself – how is this possible? How can a defendant prevail at trial but still be responsible for the plaintiffs' legal fees? What happened to the "American Rule"? The answer to all of these questions is, the New Jersey Consumer Fraud Act. Under the Act, as it has been interpreted by the New Jersey Supreme Court — in cases like Cox v. Sears Roebuck & Co. and Weinberg v. Sprint Corp. — plaintiffs can recover costs and fees if they prove that a defendant committed an unlawful practice, even if the victim cannot show any ascertainable loss. While a plaintiff cannot recover treble damages under the Act without an ascertainable loss, it can still recover its costs and fees. What this means is that if a plaintiff survives summary judgment and presents a prima facie case of ascertainable loss, it will be able to recover its costs and fees even if, as in the Logatto case, it ultimately loses on the merits at trial.

This case, like seemingly every other decision handed down in connection with the Consumer Fraud Act, should be a cautionary tale for any business or entities that sell products or provide services that are covered by the Act.

Tenants Who Don’t Act Quickly On Claims For Breach Of Implied Warranty of Habitability Risk Being Left Out In The Cold

by: Gregory S. Ricciardi

On May 15, 2012, the Appellate Division handed down its decision in Vitiello v. Marques, a commercial landlord tenant dispute. The case involved a claim for constructive eviction, wherein the Plaintiff alleged that the leased premises was “exceptionally cold” as a result of a failing heater and cracked window frames, all of which the Landlord allegedly refused to repair. As a result of the cold, the Plaintiff declared that the premises were uninhabitable, except that the tenant waited until the summer to actually vacate the premises. The trial judge ruled and the appellate division affirmed that Plaintiff failed to establish the “factual predicate for constructive eviction.” Relying on Reste Realty Corp. v. Cooper, the benchmark New Jersey Supreme Court Case on constructive eviction, the court reasoned that the plaintiff failed to prove that the Landlord’s conduct substantially interfered with the tenant’s use and enjoyment of the premises, such that departure from the property was justified. The second element of a constructive eviction claim is that the tenant must actually vacate the premises within a reasonable time after the conditions rendering the property inhabitable arise.

The takeaway for tenants in this case is to act quickly and decisively if constructive eviction is the basis for which the tenant withholds rent or seeks to terminate a lease. Hollow complaints and chilly inconvenience are no match for a well drafted, landlord protective lease. Although the failure of a HVAC system may be the basis for a constructive eviction claim, do not wait until the summer to vacate the premises because the heat is not working, unless of course you live in Alaska.