TCCWNA Update: NJ Supreme Court Deals Major Setback to Plaintiffs
In the Spade case decided this week, the New Jersey Supreme Court addressed two questions certified to it by the Third Circuit, holding that:
(1) A regulation (as opposed to a state or federal law) can establish a clear legal right and form the basis for a TCCWNA claim where a contract includes language in violation of that regulation; and
(2) To qualify as an “aggrieved” consumer eligible to recover under TCCWNA, a consumer must have suffered some harm as a result of the TCCWNA violation.
Notably, the Court went on to clarify that the harm suffered by an aggrieved consumer need not be monetary: “A consumer may be ‘aggrieved’ for purposes of [TCCWNA] if he or she has suffered harm as a result of the defendant’s inclusion of prohibited language in a contract or other writing even if that harm is not a basis for a damages award.” However, “[i]n the absence of evidence that the consumer suffered adverse consequences as a result of the defendant’s regulatory violation, a consumer is not an ‘aggrieved consumer’ for purposes of the TCCWNA.”
The Spade holding should put to bed the spate of recent cases seeking recovery based on allegations that a consumer was merely presented with an agreement that purportedly violated TCCWNA, without any additional allegations of harm.