Spade v. Select Comfort Corp.
181 A.3d 969
| N.J. | 2018Background
- Two putative class actions (Spade; Wenger) challenged furniture sales contracts under the Truth‑in‑Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12‑14 to ‑18, alleging violations of Attorney General regulations N.J.A.C. 13:45A‑5.2 and ‑5.3 governing furniture delivery and contract language.
- Plaintiffs alleged defendants included language in sales contracts (e.g., "all sales final," "no returns") that N.J.A.C. 13:45A‑5.3(c) prohibits; plaintiffs nonetheless received timely, conforming deliveries and suffered no monetary loss from the noncompliance.
- District court dismissed both complaints, reasoning a TCCWNA plaintiff must demonstrate that the regulatory violation caused adverse effects; because deliveries were timely and conforming, plaintiffs were not "aggrieved consumers."
- Third Circuit certified two questions to the New Jersey Supreme Court: (1) whether a violation of the Furniture Delivery Regulations alone can establish a "clearly established" right/responsibility under the TCCWNA, and (2) whether a consumer who suffered no adverse consequences from regulatory noncompliance is an "aggrieved consumer."
- New Jersey Supreme Court accepted certification, limited analysis to affirmative inclusion of prohibited language under N.J.A.C. 13:45A‑5.3(c), and heard amici from consumer and business interests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether violation of N.J.A.C. 13:45A‑5.3(c) alone can establish a "clearly established legal right of a consumer or responsibility of a seller" under N.J.S.A. 56:12‑15 | Spade/Wenger: Any violation of the furniture regulations supplies a TCCWNA basis; regulations qualify as "State or Federal law." | Defendants: Administrative regulations generally cannot, by themselves, supply the "clearly established" legal right/responsibility required by the TCCWNA. | Held: Yes — inclusion of language prohibited by N.J.A.C. 13:45A‑5.3(c) may alone constitute a violation of a "clearly established" right/responsibility under N.J.S.A. 56:12‑15. |
| Whether a consumer who receives a noncompliant contract but suffers no adverse consequences is an "aggrieved consumer" under N.J.S.A. 56:12‑17 | Spade/Wenger: Any consumer offered or entering a noncompliant contract is an "aggrieved consumer," even without harm. | Defendants: Must show adverse consequences or harm caused by the unlawful provision to be "aggrieved." | Held: No — an "aggrieved consumer" must show harm (monetary or other adverse consequences), though harm need not be monetary damages; mere exposure to unlawful language with no adverse effect is insufficient. |
Key Cases Cited
- Dugan v. TGI Fridays, Inc., 231 N.J. 24 (2017) (describes TCCWNA purpose to prevent deceptive consumer contract practices)
- Kent Motor Cars, Inc. v. Reynolds & Reynolds Co., 207 N.J. 428 (2011) (assesses whether statutes or regulations clearly prohibited contractual provisions underlying TCCWNA claims)
- Bosland v. Warnock Dodge, Inc., 396 N.J. Super. 267 (App. Div. 2007) (recognized TCCWNA claims based on violations of consumer‑sales regulations)
- Cox v. Sears Roebuck & Co., 138 N.J. 2 (1994) (regulatory violations can impose strict liability under the Consumer Fraud Act)
- Shelton v. Restaurant.com, Inc., 214 N.J. 419 (2013) (construing TCCWNA remedial structure and statutory interpretation principles)