State Allies Blog Series: Q&A with the New Jersey Civil Justice Institute

September 02, 2016

License plates dub New Jersey the “Garden State,” and while this densely populated state is known for growing eggplant, blueberries, and cranberries, it is also known for growing litigation.

New Jersey is fertile land for plaintiffs’ lawyers, who use the state’s consumer protection laws and the court system’s easy access for out-of-state plaintiffs to bring frivolous lawsuits and score big payouts. 

The New Jersey Civil Justice Institute (NJCJI) advocates for legal reforms to weed out the frivolous suits, stop the trend of “litigation tourism,” and make the state’s justice system fair for all. 

So how exactly do we achieve an impartial civil justice system in New Jersey? Through an interview with NJCJI we got a glimpse at some of the reforms the organization is prioritizing.

New Jersey’s consumer protection laws are expansive and often misused by plaintiffs’ lawyers.  One law that leaves businesses open to frivolous lawsuits is the New Jersey Consumer Fraud Act (CFA). What are the big issues with the CFA?

New Jersey’s CFA is a mess, so much so that we have a Consumer Fraud Act Hall of Shame that looks at some of the most ridiculous and, frankly, unbelievable lawsuits brought under the CFA.  Even the state’s Law Revision Commission, which has been tasked with cleaning up the statute, has noted that in its current form, the CFA is “infirm” and “one of the state’s most complicated statutes.”

The CFA’s complexity and lack of clarity, combined with the promise of triple damages and attorneys’ fees for successful litigants, has made the law a magnet for lawsuits. A recent study found that the number of lawsuits filed under the Act increased 447% from 2000 to 2009. This is not because there was significantly more fraud going on in New Jersey during this period, but because attorneys are systematically targeting businesses for CFA violations.

It is time for the legislature to step in and amend the CFA so that it targets real fraudsters without entrapping businesses that are not trying to rip-off their customers, but who happen to make an honest mistake.

The CFA isn’t the only consumer protection bill that is flooding New Jersey courts with cases. We’ve noticed a lot of cases are being filed against well-known retailers over their online terms of service agreements under New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA). What is going on there?

We are seeing a crazy number of TCCWNA (pronounced tic-WA-na) cases being filed right now. This is a New Jersey law that was passed in the 1980s, but it basically sat on the books until the early 2000s.

The Act forbids any business from violating “any clearly established legal right of a consumer” when they enter into a written contract with a consumer or give or display any warranty, notice or sign to a consumer.  This includes the ubiquitous “terms of service” agreements we all click accept on to download apps on our smartphones.

If a business violates TCCWNA, it is on the hook for $100 or actual damages, plus reasonable attorneys’ fees and court costs.

In 2009, the courts started allowing plaintiffs to file class action lawsuits under TCCWNA, even if the plaintiffs suffered no injury. Then in 2013, TCCWNA made the jump to the online world. Since that time, the number of e-commerce related cases has ballooned. At the heart of most of these cases is the TCCWNA provision barring statements like, “void where prohibited” unless the contract, notice or sign says what exact provisions are prohibited in New Jersey. There is no indication that the consumers involved in any of these cases have even been harmed by the terms and conditions they are suing over.

Online terms of service lawsuits are just the tip of the TCCWNA iceberg. The only way to stop this law from costing businesses in our state billions of dollars is by being pro-active and taking a strong, united stand against TCCWNA abuse.

On October 11, we are hosting a conference on the unintended consequences of business regulation, where we will be providing an update on our TCCWNA reform efforts, exploring how this statute has produced such an explosion of litigation, and discussing practical steps businesses can take to attempt to shield themselves from TCCWNA litigation. If you own a business in New Jersey, you are going to want to be in the room for this important discussion.

Let’s talk about expert testimony. In litigation, experts are often brought in to testify on a subject in the case.  This testimony can be abused and “junk science” too often finds its way into the case.  How can New Jersey improve its expert testimony standards?

Right now, New Jersey’s rule on expert testimony gives judges the discretion to allow expert witnesses to offer any testimony that “will assist the trier of fact to understand the evidence or to determine a fact in issue.” This has been interpreted in various ways, leading to a lot of uncertainty about what standards actually apply.

At the federal level, courts use a more reliable standard for allowing expert testimony, known as the Daubert standard. Under the Daubert standard, before a witness offers expert testimony the judge must determine whether the offered evidence is based on sufficient facts or data; confirm that the evidence is the product of reliable principles and methods; and ensure the evidence is based on the application of those principles and methods to the facts of the case.

We know our standard is not as strong or reliable as the Daubert standard because there have been cases where an expert was allowed to testify in New Jersey, but was barred from testifying in a similar case in federal court.

New Jersey’s judges deserve to have a time-tested and trial-perfected set of rules that they can apply consistently to all cases to keep junk science out of the courtroom instead of a vague directive to do what they think is best.

 

 

 

 

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