Class Decertified Where Vast Majority of Members Sustained No Ascertainable Loss

Adrienne C. Rogove

In another blow to plaintiffs suing under New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”), the United States District Court for the District of New Jersey in Martinez-Santiago v. Public Storage, 2019 WL 1418118 (D.N.J. March 29, 2019), decertified a class of 160,000 members alleging that lease agreements with the Defendant Public Storage violated TCCWNA. Following the New Jersey Supreme Court’s decision last year finding that a consumer who is a party to a contract that fails to comply with New Jersey law, but who does not suffer any adverse consequences from the noncompliance, has failed to state a TCCWNA claim, United States District Judge Jerome Simandle decertified the class. The decision was based on an analysis of the Rule 23 requirements, where the Court held that the requirements of “typicality,” “predominance,” and “numerosity” under Rule 23 could not be met.

With respect to the typicality requirement, the Court found that the named plaintiff was one of “relatively few” customers who actually suffered an adverse consequence due to the form lease contract entered into with Public Storage. Since the vast majority of class members did not suffer an adverse consequence, the claims of the named plaintiff were not typical of the class members, and therefore the typicality requirement was not met.

The Court also found that the “predominance” requirement could not be met because questions of fact common to class members no longer predominated over questions affecting only individual claims. Finally, because discovery revealed that only 29 class members might be able to assert a viable claim under TCCWNA, the “numerosity” requirement of Rule 23 likewise could not be met.

The decision of the Court in Martinez-Santiago left only the named plaintiff with potentially viable claims, thereby continuing to chip away at the prospect of successful class action suits against corporate entities, and large attorneys’ fee awards to class action counsel, in suits where the class cannot meet the requirements of Federal Rule of Civil Procedure 23.

Must Consumer Suffer Adverse Consequence in Order to Sue under TCCWNA?

Stephen M. Orlofsky and Ethan M. Simon

The Third Circuit certified to the New Jersey Supreme Court two questions about the interplay between New Jersey’s furniture delivery regulations and the state’s Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA). In Spade v. Select Comfort Corp., — A.3d —, 2018 WL 1790394 (N.J. Apr. 16, 2018), the court answered. In so doing, it expanded the reach of TCCWNA, which is intended to “prevent deceptive practices in consumer contracts.” Id. at *7. The act prohibits merchants from offering and entering into written contracts with consumers that include “any provision that violates any clearly established 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 consumer contract is signed.” Id. Continue reading “Must Consumer Suffer Adverse Consequence in Order to Sue under TCCWNA?”