New Jersey Lemon Law Lawyer Blog

THERE IS NO PRIVITY REQUIREMENT TO MAINTAIN A CAUSE OF ACTION UNDER THE NEW JERSEY CONSUMER FRAUD ACT.

You have a right of action against those up the stream of commerce, e.g., an indirect seller.

There is no privity requirement to maintain a cause of action under the New Jersey Consumer Fraud Act. In Alloway v. General Marine Ind., 149 N.J. 620 (1997), the Supreme Court held that the New Jersey Consumer Fraud Act does not require privity to maintain a cause of action. In Alloway, the plaintiff purchased a defective boat, which was built by the (manufacturer) defendant. The plaintiff instituted suit against the manufacturer and other defendants for tort (negligence) and warranty claims. The Court dismissed the tort claims and permitted the plaintiff to proceed on the warranty claims, holding that privity was required for tort claims, but not for warranty type claims. The underpinnings of the decision were that the plaintiff had statutory avenues of remedy including, but not limited to, the Uniform Commercial Code (UCC) and the New Jersey Consumer Fraud Act to address economic injuries to property. Id. at 639 – 640. The Court specifically left unanswered whether or not tort or contract law applies to a product that poses a risk of causing personal injuries or property damage, but has caused only economic loss to the product itself.

Individuals are specifically authorized to act as private attorneys general. The New Jersey Consumer Fraud Act’s provisions authorizing consumers to bring their own private actions is integral to fulfilling the legislative purposes, and those purposes are advanced as well by Court’s affording the Attorney General the broadest kind of power to act in the interest of the consumer public. The empowerment of citizens to act as private attorneys general reflects an apparent Legislative intent to enlarge fraud-fighting authority and to delegate the authority among the various governmental and non-governmental agencies, each exercising different forms of remedial power. That Legislative intent is readily inferable from the ongoing need for consumer protection and the salutary benefits to be achieved by expanding enforcement, authority and enhancing remedial address. When a remedial power is concentrated in one agency, under-enforcement may result because of lack of resources, concentration of agency responsibilities, lack of expertise, agency captured by regulated parties, or a particular ideological bent by an agency decision-maker. See, E.G. Arcadia v. Ohio Power Co., 498 U.S. 73, 87-88, 111 S.Ct. 415, 423-24, (1990); (Stevens J. concurring).

Under-enforcement by an administrative agency may be even more likely where, as in this case, the regulated party is a relatively powerful business entity, while the class protected by the regulation tends to consist of low income persons with scant resources, lack of knowledge about their rights, inexperience in a regulated area, and an insufficient understanding of the prohibited practice. The primary risk of under- enforcement – the victimization of the protected class – can be greatly reduced by allocating enforcement responsibilities among the various agencies, among the members of the consuming public in the forms of judicial and administrative proceedings, and in private causes of action. Lemelledo v. Beneficial Management Co., 150 N.J. 255, 269-270.

NEW JERSEY LAW PERMITS DISCOVERY TO DEMONSTRATE THE DEFENDANTS’ INTENT AND OTHER OF THE PLAINTIFF’S DEMAND REASONABLY CALCULATED TO LEAD TO ADMISSIBLE EVIDENCE

New Jersey Court Rules provide that parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of books, documents or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not grounds for objection that the information sought will be admissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. See Rule 4:10-2. The public policies of expeditious handling of cases, avoiding stale evidence, and providing uniformity, predictability and security in the conduct of litigation is the policy underlining the New Jersey Discovery Rules. See Abtrax Pharmaceuticals v. Elkinssinn, Inc., 139 N.J. 499, 512 (1995). The effect of the discovery rules cite that, in effect, the discovery rules were designed to eliminate, as far as possible, concealment and surprise in the trial of lawsuits to the end that judgments rest upon the real merits of the causes and not upon the skill and maneuvering of counsel. See Payton v. NJ Turnipike Authority, 148 N.J. 524 (1997).

Discovery, however, is intended to lead to facts supporting or opposing an asserted legal theory; it is not designed to lead to formulation of a legal theory. Energy Rec. v. Dept. of Environmental Protection, 320 N.J. Super 59, 64 (App. Div. 1999). The relevant standard of the Court Rules does not relate only to matters which would necessarily be admissible in evidence, but includes information reasonably calculated to lead to admissible evidence respecting the cause of action or a defense. See Comments to New Jersey Court Rules 2000, R. 4:10-2, Comment 2, Page 1203.

New Jersey Lemon Law Unit

If you are interested in filing a lemon law claim, whether with or without an attorney, the site that you might want to review is the Department of Consumer Affairs. This website gives all the appropriate instructions on how to file a lemon law claim and all the requirements. The forms are also listed on this page and make it easier for a person to represent themselves in the process of filing a lemon law claim.

All of the forms might be simple. The law and the legal principles underlying a lemon law claim are in fact quite contrary.

US Supreme Court Decision on Arbitration

Recently, the US Supreme Court decided a significant arbitration case. The issue is whether or not the Federal Arbitration Act permitted the waiver of class action claims in a consumer contract. At the state level under the state laws, the states were divided as to whether or not a consumer could waive the right to a class action. Specifically, under New Jersey Law, the Supreme Court had held that the waiver of class action claims under certain circumstances were unconscionable. Thus, even if a selling dealer or manufacturer had a class action provision in the contract prohibiting the plaintiff to participate in a class action, this “clause” was not enforceable as part of the contract. There are specifically two cases, which were entitled “Delta Funding” and “Mohammad.”

The US Supreme Court held, however, that the policy underlying the Federal Arbitration Act and the expeditious resolution of disputes took precedence over the public policy behind class actions. In addition, the Court held that class actions could not be appropriately handled in the arbitration contacts. As an example, if there was an arbitration clause but no waiver of class action, various attorneys could potentially or were within the right to file a class action in the arbitration forum. JAMS and AAA had their specific provisions for arbitrating class actions. The Supreme Court held that the risks of mistakes were too great and thus determined that class actions could not be arbitrated.