In the thick of a torrent of litigation, mostly class actions, premised upon purportedly unlawful contractual provisions under the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) – a statute that permits “no-injury” claims – the District of New Jersey has reaffirmed a bright-line rule concerning this law: Omissions don’t trigger liability.
In Matijakovich v. P.C. Richard & Son, Matijakovich purchased a washing machine from P.C. Richard & Son. The written contract documenting the purchase did not, according to Matijakovich, include mandatory “language disclosing a seller’s obligations in case of the delayed delivery of furniture.” Matijakovich therefore brought a putative TCCWNA class action on behalf of himself and anyone else who purchased appliances and furniture from the same P.C. Richard & Son branch, seeking a $100 penalty for every putative class member who entered into such an agreement.
The four elements of a TCCWNA claim are: “(1) the plaintiff is a consumer; (2) the defendant is a seller; (3) the seller offers a consumer contract…and (4) the contract…includes a provision that violate[s] any legal right of a consumer or responsibility of a seller.” Here, the fourth element was key – and P.C. Richard & Son “argue[d] that a TCCWNA claim cannot be based on an omission, because an offending contract must ‘include’ an improper provision.” And while the District Court did acknowledge that “[t]he New Jersey Supreme Court has not ruled on whether a TCCWNA claim may be based on an omission,” federal court precedent is clear: The TCCWNA does not cover omissions.
This is not the first time New Jersey federal courts have illuminated this rule. As the court in Matijakovich noted, in Watkins v. DineEquity, Inc., Chief Judge Simandle held that an “omission of beverage prices from a restaurant menu is not actionable under the TCCWNA,” explaining that a “reading of ‘includes’ [that] also covers its inverse, ‘omits,’ impermissibly reads more into prohibited conduct than is provided by the statute, even under a liberal construction approach.” The Third Circuit affirmed this decision, writing that the “TCCWNA encompasses only illegal provisions in writings covered by the statute, and does not make actionable omissions.”
Thus, in Matijakovich, this precedent could support only one result: Because “Plaintiff’s claim is entirely based on an alleged omission…[P.C. Richard & Son’s] motion to dismiss that claim [was] granted.”
Although plaintiffs will continue to push the boundaries of the TCCWNA, Watkins and Matijakovich reveal that “even under a liberal construction approach,” the TCCWNA can only be pushed so far.