NJ Supreme Court Narrowly Defines “Aggrieved Consumer.” End Of The Road For One Type Of “No Injury” Class Action?

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Contract(pd)
I have written a number of times about New Jersey's Truth in Consumer Contract, Warranty and Notice Act (TCCWNA). (Here, here, and here for example.) This statute, which was largely ignored after it was enacted in 1981, became increasingly popular in recent years as part of so-called no injury class actions. (So-called mostly by defense counsel, not plaintiff's counsel.) Its popularity may now have come to an end, however, because the New Jersey Supreme Court recently issued its opinion in the highly-anticipated case, Spade v. Select Comfort Corp., which answered two questions certified to it by the U.S. Circuit Court of Appeals for the Third Circuit, one of which appears to hamper, at the very least, the ability of plaintiffs to sue for alleged violations of the act.

By way of brief background, the TCCWNA was enacted to prevent deceptive practices in consumer contracts by prohibiting the use of illegal terms or warranties. It provides:

No seller . . . shall in the course of his business offer to any consumer or prospective consumer or enter into any written  consumer contract  .  .  .  or display any written . . . notice or sign . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller . . . as established by State or Federal law at the time the offer is made . . . or the . . . notice or sign is given or displayed.

To state a claim under the TCCWNA, a plaintiff must prove four elements: (1) that it is a consumer; (2) that defendant is a seller; (3) that the seller offered a consumer contract containing a provision that violated a legal right of the consumer or a responsibility of the seller; and (4) that it was an "aggrieved consumer." Any party found to have violated the TCCWNA is liable for a civil penalty of not less than $100, actual damages, or both, and reasonable attorneys' fees and court costs.

The questions certified to the Supreme Court in Spade arose out of two cases that had been consolidated by the district court. Each involved plaintiffs who ordered furniture pursuant to contracts that violated certain regulations promulgated by New Jersey's Division of Consumer Affairs. The regulations require, among other things, that furniture sellers deliver furniture to customers by or before the promised delivery date or provide written notice that they will not be able to do so. Sellers must also provide notice to the purchaser that if the delivery is late, the consumer has the option of canceling the order and receiving a full refund, or agreeing to accept delivery at a specified later date. The regulations also prohibit sellers from including certain language in their contracts, such as "all sales final," "no cancellations," and "no refunds." In Spade, plaintiffs alleged that the contracts they entered into with defendants did not contain language required by these regulations, contained language prohibited by these regulations, or both. Notably, however, plaintiffs received their furniture deliveries on time.  

Continue reading “NJ Supreme Court Narrowly Defines “Aggrieved Consumer.” End Of The Road For One Type Of “No Injury” Class Action?”

“[Saint] Cecelia You’re Breaking My Heart” (By Not Paying My Commission)

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

House + money (pd)If you are a realtor and you enter into an exclusive agreement to find tenants for your client's property, but then your client enters into a rent-free lease with a tenant, do you still get a commission? The answer, at least according to the Appellate Division in Century 21-Main Street Realty, Inc. v. St. Cecelia's Church, is no. 

In Century 21, plaintiff entered into an exclusive listing agreement with defendant, a church, under which  plaintiff would list an "inactive school building," which the church owned, for either sale or lease. Under the agreement, plaintiff was entitled to a commission equal to 6% of the sales price, if the property was sold, or one month of rent, if the property was leased. During the term of the agreement, the church entered into a lease with the local school board, which allowed the board to use the building "rent free" for the first 26 months. It also contained two, six-month "hold over terms." If the board continued to occupy the building during either or both of these terms, it would have to pay the church $900,000 per term. The lease also required the board to repave the parking lot, and allowed, but did not require, the board to make any repairs or renovations to the building that it saw fit, at the board's expense.

Two months after the church signed the lease, plaintiff demanded a commission based on the "asserted costs" of the repairs the board intended to make to the building. It asserted that it was entitled to a commission equal to "two month's rent due based on rental, repair evaluation." Apparently, plaintiff assumed the repairs would costs $1.5 million, divided that amount by the 26-month term of the lease to come up with the per-month cost of the repairs, and then claimed that it was entitled to two month's payment as its commission. The church refused to pay any commission and plaintiff sued. 

Continue reading ““[Saint] Cecelia You’re Breaking My Heart” (By Not Paying My Commission)”

Not An Open-Ended Issue: Judge’s Failure To Ask Open-Ended Questions During Voir Dire Is Reversible Error.

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

 Jury (pd)
In 2006 and 2007, the Administrative Office of the Courts issued directives addressing jury voir dires. The directives require, among other things, that trial judges ask jurors at least three open-ended questions that are designed to elicit a narrative response to which "appropriate follow up questions [can] be asked." These questions must be "posed verbally to each juror to  elicit a verbal response." The purpose of this requirement is to "ensure that jurors verbalize their answers so the court, attorneys and litigants can better assess the jurors' attitudes and ascertain any bias or prejudice, not evident from a yes or no response, that might interfere with the ability of that juror to be impartial." The importance of the Administrative Office's directives was highlighted in two recent decision from the Appellate Division, both of which overturned verdicts rendered by jurors who were not asked at least three open-ended questions during voir dire.

In Heredia v. Piccininni, plaintiff sued after being injured in an automobile accident. Before trial, defendant stipulated liability, thus the only issue for the jury was damages. In advance of jury selection, Plaintiff submitted the following open-ended questions to be asked during voir dire:

  1. What are your feelings regarding the proposition that accidents resulting in serious damage to a vehicle may result in no bodily injuries and accidents resulting in little damage to a vehicle may result in serious bodily injuries?
  1. Describe by way of an example an experience in your life that illustrates your ability to be fair and open-minded in this case.
  1. Who are the two people that you least admire and why?
  1. What would you do about the homeless situation?
  1. What would you do about those without medical insurance?

The court did not include any of plaintiff's proposed questions in the list of questions used during voir dire. Instead, the trial judge asked each juror "multiple biographical questions required by the [Administrative Office]," including how they received their news, what their favorite television shows were, what bumper stickers they had on their cars, and how they spent their time. None of these were open-ended questions. Plaintiff's counsel used two of her six peremptory challenges during jury selection and, at the end of the process, advised the court that the jury was satisfactory.

After trial, the jury returned a verdict of no cause on plaintiff's non-economic losses (e.g., pain and suffering damages) but awarded plaintiff her economic damages, representing the full value of her outstanding medical bills. Plaintiff appealed, arguing, among other things, that the trial judge failed to ask any open-ended questions during voir dire.

Continue reading “Not An Open-Ended Issue: Judge’s Failure To Ask Open-Ended Questions During Voir Dire Is Reversible Error.”

Citing Springsteen

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Springsteen 2
Continuing with a Bruce Springsteen themed week as I return to regular blogging . . .

A few years ago, I wrote an article — Courts Can Make Better Use of 'The Boss" — about judges citing Bruce Springsteen's music. Here are the opening paragraphs:

Springsteen usually comes in third — behind Bob Dylan and the Beatles and slightly ahead of Paul Simon — on the list of musicians whose lyrics are most frequently cited in legal articles and judicial opinions. Several law review articles, and at least one symposium, have been dedicated to the characters in his songs, particularly those on the margins, living in the darkness on the edge of town.

These individuals are appealing to law professors and commentators, particularly those interested in social justice, because, as professor Abbe Smith noted in her article “The Dignity and Humanity of Bruce Springsteen’s Criminals,” Springsteen “takes the least popular, least sympathetic among us, and offers up their stories to teach us something about ourselves.” However, when judges cite Springsteen, something seems to get a little lost along the way.

The article then noted how one judge used the lyrics to "No Surrender" to describe a party's approach to discovery and another quoted "Badlands" in an insurance dispute about bags of coffee. Since I wrote this article, a few more judges have quoted Springsteen in their opinions, with mixed results.

One of the recent cases involved a repeat player! In my article, I noted that, in a 2011 decision, a Florida federal court judge had compared a party’s aggressive approach to discovery to the song "No Surrender" from "Born in the U.S.A.": “A ‘no surrender’ mentality may be perfectly appropriate for a Bruce Springsteen rock and roll song, but it is frequently unhelpful in litigation, as illustrated by the unfortunate scenario here.” Four years later, the same judge made a similar comparison in a different case: 

In the well-known “No Surrender” song released on his “Born in the U.S.A.” album, Bruce Springsteen noted, “Well, we made a promise we swore we'd always remember, no retreat, baby, no surrender.” Springsteen's “no surrender” philosophy may be fine for a rock and roll song about the importance of being true to one's own dreams and beliefs, but it is frequently unhelpful in litigation. It is particularly inapplicable and inappropriate here.

Miami Yacht Charters, LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh Pennsylvania, 2015 WL 520846 (S.D. Fla. Feb. 9, 2015). Kudos to the judge for citing Springsteen, but I am still not sure if the comparison fits. 

In several other recent cases, however, the references to Springsteen were a better fit:

  • a California judge referred to "57 Channels (And Nothin' On)" when sympathizing with cable customers in a putative class action against the cable companies, among others, over licensing fees that increased the customers' bills: "With apologies to Bruce Springsteen, we appreciate the lament of cable television subscribers who feel that although they now receive 10 times 57 channels or more, mostly nothing's on that they wish to view." Fischer v. Time Warner Cable Inc., 234 Cal. App. 4th 784, 798 (2015); and
  • a federal judge in Pennsylvania cited "Glory Days" as an example of "a middle-aged man's wistful recollection of his youthful vigor." Flood v. Nat'l Collegiate Athletic Ass'n, 2015 WL 5785801 (M.D. Pa. Aug. 26, 2015).

As I was a few years back, however, I remain surprised at the lack of references to Springsteen's music from New Jersey state or federal court judges.