Consumer protection laws allow the recovery of damages from businesses for various fraudulent or deceptive practices. These laws tend to define prohibited conduct in very general terms. Businesses that provide goods or services to the general public should be aware of the latest developments in consumer protection law in order to avoid unwitting liability for deceptive business practices. The New Jersey Supreme Court has agreed to hear two appeals of putative consumer class actions alleging deceptive pricing schemes against two restaurant chains. While these cases only directly involve alcohol sales, they demonstrate how major consumer complaints can arise from seemingly minor practices.
The New Jersey statutes at issue are the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 et seq., and the Truth in Consumer Contract Warranty and Notice Act (TCCWNA), id. at 56:12-14 et seq. Among the many acts prohibited by the CFA is the offered, attempted, or completed sale of retail goods without clearly stating “the total selling price.” Id. at § 56:8-2.5. The statute also prohibits “the knowing, concealment, suppression, or omission of any material fact,” when such an action is intended to induce a consumer to make a purchase. Id. at § 56:8-2. The TCCWNA prohibits businesses from offering or entering into contracts with consumers that “violate any clearly established legal right of a consumer,” including a consumer’s rights under the CFA. Id. at § 56:12-15. Both statutes allow individual consumers to sue for damages. Id. at §§ 56:8-2.11, 56:12-17.
When an individual consumer’s damages are not enough to make the time and expense of pursuing a claim worthwhile, multiple consumers with similar claims can file a class action on behalf of all similarly situated consumers. To obtain class certification, the plaintiffs must be able to establish four elements: (1) that the class is sufficiently numerous that it would not be practical to join every plaintiff individually; (2) that all class members have factual or legal issues in common; (3) that the claims of the plaintiffs are typical of the rest of the class; and (4) that the plaintiffs can “fairly and adequately protect the interests of the class.” N.J.R.C. 4:32-1(a).
The plaintiffs in the pending appeals filed suit under the CFA and the TCCWNA against two nationwide restaurant chains. They alleged that they were charged different prices for beer, depending on whether they ordered at the bar or while seated at a table, and that the restaurants failed to disclose the price difference in the menu or anywhere else. The price difference was typically $1.59. The proposed plaintiff classes included anyone who bought items without a disclosed price at the defendant restaurants.
The trial courts granted class certification in both cases. In one case, Bozzi v. OSI Restaurant Partners, the Appellate Division did not disturb the ruling. The court reversed the lower court’s order in the other case, Cameron v. TGI Fridays, finding that the plaintiffs had failed to show a common “ascertainable loss” among class members, as required by the CFA. Both cases will now go to the state supreme court.
Business attorney Samuel C. Berger practices in New York and Northern New Jersey, representing entrepreneurs, businesses, and business owners. The fixed-fee legal service packages that we offer cover a wide range of legal issues and needs. Contact us today online, at (201) 587-1500, or at (212) 380-8117 to schedule a confidential consultation to see how we can help you and your business.
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