Debra Dugan v. TGI Friday’s, Inc. (077567) (Burlington County and Statewide)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3485-14T3
DEBRA DUGAN, ALAN FOX, and
APPROVED FOR PUBLICATION
ROBERT CAMERON on behalf of
themselves and all other March 24, 2016
similarly situated,
APPELLATE DIVISION
Plaintiffs-Respondents/
Cross-Appellants,
v.
TGI FRIDAYS, INC., CARLSON
RESTAURANTS WORLDWIDE, INC.,
on behalf of themselves and
all others similarly situated,
Defendant-Appellant/
Cross-Respondents.
__________________________________________
Argued February 23, 2016 – Decided March 24, 2016
Before Judges Yannotti, Guadagno and
Vernoia.
On appeal from Superior Court of New Jersey,
Law Division, Burlington County, Docket No.
L-0126-10.
Stephen M. Orlofsky argued the cause for
appellants/cross-respondents (Blank Rome,
L.L.P., and LeClair Ryan, attorneys; Mr.
Orlofsky, David C. Kistler, Jeffrey L.
O'Hara, and Matthew S. Schultz, on the
briefs).
Sander D. Friedman argued the cause for
respondents/cross-appellants (Law Office of
Sander D. Friedman, LLC, attorneys; Mr.
Friedman and Wesley G. Hanna, on the
briefs).
The opinion of the court was delivered by
YANNOTTI, P.J.A.D.
Defendants TGI Fridays, Inc. and Carlson Restaurants
Worldwide, Inc. (collectively, TGIF) appeal, on leave granted,
from an order entered by the Law Division on February 13, 2015,
denying their motion to reconsider class certification and de-
certify the class or, in the alternative, to revise the class
definition. Plaintiffs Debra Dugan, Alan Fox and Robert Cameron
cross-appeal from the court's order certifying the class. For
the reasons that follow, we reverse on the appeal, dismiss the
cross-appeal, and remand the matter to the trial court for
further proceedings on plaintiffs' individual claims.
I.
We begin our discussion with a summary of the relevant
procedural history and facts, as revealed in the record on
appeal.
A. The Complaint.
On January 12, 2010, Dugan filed a putative class-action
complaint against TGIF alleging that the restaurant chain
violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -184,
and the Truth in Consumer Contract Warranty and Notice Act
(TCCWNA), N.J.S.A. 56:12-14 to -18, by: (1) failing to list
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prices for beer, mixed drinks, and soft drinks on its restaurant
menus; and (2) engaging in an unconscionable commercial practice
by charging different prices for the same beverage, depending
upon where in the restaurant the beverage was served.
Dugan alleged that she had been a patron of TGIF's
corporate-owned restaurant in Mount Laurel and was aggrieved by
TGIF's failure to disclose the price of beverages on the
restaurant's menus. Dugan claimed she became aware of the prices
after she had consumed the beverages and was presented with a
check. Dugan also claimed that on December 5, 2008, she was
charged $2.00 for a beer at the bar and later charged $3.59 for
the same beer at a table in the restaurant.
The proposed plaintiff class consisted of all TGIF
customers who had "purchased items from the menu that did not
have a disclosed price." The proposed defendant class consisted
of the thirty-eight TGIF restaurants in New Jersey, some of
which are corporate-owned, and some of which were are operated
as a franchise of TGIF.
B. TGIF's Motion to Dismiss.
In June 2010, TGIF filed a motion to dismiss the complaint
for failure to state a claim upon which relief could be granted.
The judge entered an order denying the motion. We denied TGIF's
motion for leave to appeal from the judge's order, but the
Supreme Court later granted TGIF's motion and summarily remanded
3 A-3485-14T3
the matter to this court for consideration of TGIF's
interlocutory appeal. We affirmed the trial court's order in an
unpublished opinion. Dugan v. TGI Fridays, Inc., No. A-3098-10
(App. Div. Oct. 25, 2011) (slip op. at 20).
We held that Dugan had alleged sufficient facts to support
a claim under the CFA, specifically a violation of N.J.S.A.
56:8-2.5, which mandates point-of-sale disclosure of the price
of merchandise at retail, and N.J.S.A. 56:8-2, which declares
certain unconscionable commercial practices to be unlawful. Id.
at 12-14. We also held that Dugan pled sufficient facts to show
that she sustained an ascertainable loss, and that TGIF's alleged
unlawful conduct was the cause of her loss. Id. at 14-18.
We stated, "At the very least, if proven, Dugan would
logically have lost the benefit of a $2.00 beer and paid $1.59
more for the privilege of moving from the bar to a nearby
table." Id. at 17. We added that the measure of out-of-pocket
loss, which is "typically applied when [a] misrepresentation
induces a consumer to pay a higher price than is reasonable," is
the difference between the price paid and the actual value of
the property acquired. Ibid.
We also held that the facts as alleged in the complaint
were sufficient to support a claim that TGIF's alleged failure
to include prices on its menus caused the loss. Id. at 17-18. We
noted that, in her complaint, Dugan had not expressly alleged
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(1) that she looked at the menu, discerned
the absence of prices, and assumed a
reasonable price lower than what she was
eventually charged, or (2) that she
purchased a beer at the bar, actually
noticed that it cost two dollars, and then
decided to buy another at a table on the
assumption the price would be the same.
[Id. at 17.]
We observed that the lack of such facts might result in the
grant of summary judgment in favor of TGIF, but at that stage of
the litigation, Dugan's complaint had to be reviewed with some
indulgence. Id. at 18. We concluded that Dugan had alleged facts
establishing a sufficient factual "link between the alleged
unconscionable commercial practices and her purported injury."
Ibid.
We also determined that Dugan had alleged sufficient facts
to state a claim under the TCCWNA. We found that Dugan was a
"consumer" as that term is defined in N.J.S.A. 56:12-15. Id. at
18-20. We found that Dugan had alleged TGIF offered her a
contract that included a provision which allegedly violated the
CFA, and "the affirmative act that may trigger [liability under]
the TCCWNA is the offer encompassed by TGIF's menu." Id. at 19-
20.
C. The Amended Complaints.
In December 2011, Dugan filed an amended complaint,
alleging that she purchased unpriced beverages at TGIF's Mount
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Laurel restaurant on at least two occasions. Dugan claimed that
on one occasion she purchased two mixed drinks. On the other
occasion, Dugan purchased a beer at the bar, and then purchased
a beer and a soft drink at a table in the restaurant. Dugan
claimed she was not aware of the costs of the beverages until
after she had consumed the drinks and was presented with a
check.
In March 2013, a second amended complaint was filed adding
Fox and Cameron as plaintiffs and putative class
representatives. Fox claimed that in June 2007, he ordered two
unpriced mixed drinks at TGIF's corporate-owned restaurant in
Cherry Hill. He alleged that if he had known the prices he would
be charged for the drinks, he would "have ordered something
different and certainly would not have ordered two [drinks]."
Cameron alleged that in August 2012, he ordered an unpriced beer
and soda at TGIF's franchise-operated restaurant in Toms River.
In the second amended complaint, Dugan alleged that she had
ordered unpriced soft drinks, mixed drinks and beer at various
TGIF restaurants over the previous six years. She claimed TGIF's
practice of making an affirmative offer for the sale of
beverages without posting prices facilitated the sale of "more
beverages at a given price point than would be feasible if the
prices were disclosed." She claimed that this was "menu
engineering," which was "an intentional and carefully planned
6 A-3485-14T3
act" designed to "exploit consumer psychology and manipulate
consumer perceptions."
D. Discovery.
Dugan was deposed and testified that on December 5, 2008,
she ordered a beer at the bar at TGIF's Mount Laurel restaurant,
while waiting with her friends for a table. Dugan conceded that
she did not review the menu at the bar, or review the price of
the beer indicated on the receipt before she paid the bar bill.
Dugan then ordered another beer and a soda while seated at a
table in the restaurant. She conceded that she did not read the
beverage section of the menu, did not review the final bill
before she paid it, and had no expectation of what the cost of a
beer or soda would be.
When she returned home, Dugan reviewed the receipts. Dugan
learned that she had paid $2.00 for the beer at the bar, which
was what she said was the "happy-hour price." She paid $3.59 for
the beer at the table. She also paid what she characterized as a
"steep" price for a soda.
Dugan later submitted a certification to the trial court,
in which she stated that she had looked at the beverage section
of the TGIF menu on many occasions. Dugan asserted that she had
expected to pay the same price for a beer at the bar and at a
table in the restaurant.
At his deposition, Fox testified that on June 26, 2007, he
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ordered three mixed drinks at the company-owned TGIF in Cherry
Hill. In his answers to interrogatories, Fox explained that he
ordered the drinks because he had had "a bad day" and wanted to
"adjust" his "attitude." Prices for the drinks were not listed
on the menu. Fox testified that he "went ballistic" when he
received the bill because he had not realized that each drink
cost $6.99. Fox said he expected to pay about $5.75 per drink.
Fox returned with his wife to the TGIF in Cherry Hill in
January 2013 and ordered two mixed drinks and a beer. Prices for
the drinks were not listed on the menu. Fox testified that,
based on the placement of the drinks on the menu, he thought
TGIF was running a special on mixed drinks.
In response to Fox's query, the server told him that the
mixed drinks cost $7.00 and a beer costs $5.00. When Fox
received the bill, he discovered that one mixed drink cost $7.19
and the other cost $8.20. The beer cost $5.29. Fox testified
that he thought the prices of the mixed drinks were a little
high. He stated that he was dissatisfied "with the deception"
perpetrated by TGIF.
In its answers to interrogatories, TGIF indicated that
fourteen of the TGIF restaurants in New Jersey are company-
owned, including the restaurants in Cherry Hill and Mount
Laurel. Twenty restaurants are franchise-operations, including
the Toms River restaurant. All corporate-owned and franchise-run
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restaurants in New Jersey use the same menus, which were
provided by and are subject to Carlson's approval. TGIF stated
that in accord with the "customary practice within the bar
restaurant industry," the company-owned restaurants do not list
the prices for beer, soda and mixed drinks on their menus.
However, a franchisee could post beverage prices if TGIF
authorized it to do so.
E. Class Certification.
In late 2012, plaintiffs filed a motion for class
certification, and TGIF thereafter filed a cross-motion for
summary judgment. The judge denied TGIF's motion for summary
judgment, and granted plaintiffs' motion to certify the class.
The judge found that plaintiffs had met the requirements for a
class action in Rule 4:32-1(a), and demonstrated both the
predominance of the common issues and superiority of a class
action over other trial techniques, as required by Rule 4:32-
1(b).
The judge defined the class as all persons who visited a
company-owned TGIF restaurant "from January 12, 2004 to June 18,
2014, relied upon [TGIF's] menus, and purchased an offered but
unpriced soda, beer or mixed drink." The defendant class was
limited to the fourteen company-owned TGIF restaurants in New
Jersey.
On September 5, 2014, the judge granted TGIF's motion to
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dismiss Cameron as a class representative. The judge found that
Cameron did not fit within the class definition since he
allegedly ordered unpriced beverages at a franchise-owned TGIF.
The judge also extended the cut-off time for claims to July 14,
2014, the date Carlson sold the TGIF chain of restaurants to new
owners, who were not named in the complaint.1
F. Motions to redefine the class, and for Reconsideration
or Decertification of the Class.
In November 2014, plaintiffs filed a motion to amend the
class definition for purposes of preparing notices to class
members. Plaintiffs sought to remove the requirement that the
class member "relied upon" TGIF's menu, and to define the class
as any customer who purchased an unpriced beverage during the
relevant time period. The judge granted the motion and found
that the class members need not show reliance to pursue claims
under the CFA and TCCWNA.
On December 23, 2014, the judge entered an order approving
the notices for class members. The order also changed the
definition of the class to include: "All persons who visited [a]
TGI Friday's restaurant in New Jersey that is owned by TGI
Friday's (i.e. company owned store) from January 12, 2004 to
July 14, 2014, and purchased an offered but unpriced soda, beer
1 The new owners are Sentinel Partners, LLC, and TriArtisan
Capital Partners, LLC.
10 A-3485-14T3
or mixed drink."
In January 2015, TGIF filed a motion to reconsider class
certification and decertify the class or, in the alternative, to
revise the class definition. By order entered February 13, 2015,
the judge denied the motions. The judge ordered class
notification to begin on February 20, 2015.
G. The Appeal and Cross-Appeal.
TGIF filed a motion with this court for leave to appeal the
trial court's orders of December 23, 2014 and February 13, 2015,
and to stay class notification. We denied TGIF's motions.
Thereafter, the Supreme Court stayed class notification, granted
TGIF's motion for leave to appeal, summarily remanded the matter
to this court for consideration of the merits of the appeal, and
stayed further trial court proceedings pending a decision on the
appeal.
On appeal, TGIF argues that the trial court erred by
denying its motion to reconsider class certification and
decertify the class because plaintiffs failed to meet the
requirements for maintaining a class action under the court
rules. In the alternative, TGIF argues that the trial court
erred by refusing to revise the definition of the class to
require that each class member has read TGIF's menu before
purchasing an unpriced beverage.
In their cross-appeal, plaintiffs argue that the trial
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court erred by limiting the class to persons who purchased
unpriced beverages at TGIF's company-owned restaurants;
excluding purchasers of coffee, tea and miscellaneous beverages
from the class; and excluding persons who purchased unpriced
soda, beer and mixed drinks after July 14, 2014.
II.
We begin our analysis with the general standards that
govern our review of the trial court's certification order, and
the requirements in our court rules for maintaining a class
action.
The decision on whether to certify a class rests in the
sound discretion of the trial court. Lee v. Carter-Reed Co.,
L.L.C., 203 N.J. 496, 506 (2010). In making that decision, the
trial court must accept as true the allegations in the complaint
and cannot decide "the ultimate factual issues underlying the
plaintiff's cause of action." Id. at 505 (quoting Riley v. New
Rapids Carpet Ctr., 61 N.J. 218, 223 (1972) (internal quotation
marks omitted)).
We review a trial court's order on class certification for
abuse of discretion. Id. at 506. However, we apply a de novo
standard of review when evaluating a trial court's decision on a
question of law. Int’l Union of Operating Eng'rs Local No. 68
Welfare Fund v. Merck & Co., Inc., 192 N.J. 372, 386 (2007); see
also Beegal v. Park W. Gallery, 394 N.J. Super. 98, 111 (App.
12 A-3485-14T3
Div. 2007) (trial court's legal determinations relevant to class
certification are reviewed de novo).
Under our court rules, the party seeking class action
certification must first satisfy the general prerequisites for
maintaining a class action in Rule 4:32-1(a), which provides
that:
One or more members of a class may sue or be
sued as representative parties on behalf of
all only if (1) the class is so numerous
that joinder of all members is
impracticable, 2) there are questions of law
or fact common to the class, 3) the claims
or defenses of the representative parties
are typical of the claims or defenses of the
class, and 4) the representative parties
will fairly and adequately protect the
interests of the class.
These factors are commonly referred to as numerosity,
commonality, typicality and adequacy of representation. Lee,
supra, 203 N.J. at 519.
The party seeking class certification also must meet the
criteria of Rule 4:32-1(b), which requires, among other things,
that the court find "the questions of law or fact common to the
members of the class predominate over any questions affecting
only individual members, and that a class action is superior to
other available methods for the fair and efficient adjudication
of the controversy." R. 4:32-1(b)(3). This subsection of the
rule requires "the party seeking certification [to] demonstrate
both predominance of the common issues and superiority of a
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class action over other trial techniques." Muise v. GPU, Inc.,
371 N.J. Super. 13, 30 (App. Div. 2004).
To establish predominance, a plaintiff must demonstrate
that "the proposed class is 'sufficiently cohesive to warrant
adjudication by representation.'" Iliadis v. Wal-Mart Stores,
Inc., 191 N.J. 88, 108 (2007); Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 623, 117 S. Ct. 2231, 2249, 138 L. Ed. 2d 689, 712
(1997). In determining whether a plaintiff has satisfied this
requirement, the trial court should "conduct a pragmatic
assessment of various factors," including an inquiry as to: 1)
"the significance of the common questions," which "involves a
qualitative assessment of the common and individual questions
rather than a mere mathematical quantification of whether there
are more of one than the other"; 2) "whether the benefit of
resolving common and presumably some individual questions
through a class action outweighs doing so through individual
actions"; and 3) "whether a class action presents a common
nucleus of operative facts." Lee, supra, 203 N.J. at 519-20
(citation and internal quotation marks omitted).
The court also must determine whether a class action is
superior to other trial techniques. Id. at 520. This decision
"involves considerations of fairness to the putative class
members and the defendant, and the 'efficiency' of one
adjudicative method over another." Ibid. (citing In re Cadillac
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V8-6-4 Class Action, 93 N.J. 412, 436 (1983)). Finally, the
court must consider the manageability of a class action. Ibid."Managing a state-wide class action almost always will be a
difficult undertaking because '[c]omplexity is an inherent trait
of class litigation.'" Ibid. (quoting Iliadis, supra, 191 N.J.
at 117-18).
In making the predominance, superiority and manageability
assessment, "a certifying court must undertake a 'rigorous
analysis' to determine if the Rule's requirements have been
satisfied." Iliadis, supra, 191 N.J. at 106-07 (citation
omitted). The certifying court "must understand and analyze the
'claims, defenses, relevant facts, and applicable substantive
law' in determining whether a class action: (1) presents common
issues of fact and law that predominate over individual ones,
(2) is a superior means of achieving efficient and just results,
and (3) is manageable." Lee, supra, 203 N.J. at 505-06 (quoting
Iliadis, supra, 191 N.J. at 107).
III.
TGIF contends plaintiffs failed to establish the
predominance requirement of Rule 4:32-1(b)(3) with regard to the
claims under the CFA.
A CFA claim brought by a consumer "requires proof of three
elements: '1) unlawful conduct by defendant; 2) an ascertainable
loss by plaintiff; and 3) a causal relationship between the
15 A-3485-14T3
unlawful conduct and the ascertainable loss.'" Manahawkin
Convalescent v. O'Neill, 217 N.J. 99, 121 (2014) (quoting
Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009)). "'A
plaintiff who proves all three elements may be awarded treble
damages, "attorneys" fees, filing fees and reasonable costs of
suit.'" Id. at 121 (quoting N.J.S.A. 56:8-19).
An ascertainable loss "is one that is 'quantifiable or
measurable,' not 'hypothetical or illusory.'" D'Agostino v.
Maldonado, 216 N.J. 168, 185 (2013) (quoting Thiedemann v.
Mercedes-Benz USA, L.L.C., 183 N.J. 234, 248 (2005)). A consumer
may establish an ascertainable loss if he or she suffers an out-
of-pocket loss. Lee, supra, 203 N.J. at 522. Furthermore, the
consumer must "demonstrate that he or she suffered an
ascertainable loss 'as a result of' the unlawful practice." Id.
at 522 (quoting N.J.S.A. 56:8-19 (emphasis added)). The
statutory phrase "as a result of" connotes a "causal nexus
requirement." Bosland, supra, 197 N.J. at 557-58.
Here, plaintiffs allege they suffered ascertainable losses
as a result of TGIF's alleged unlawful conduct, specifically,
its failure to list prices on its menus for certain beverages.
Plaintiffs allege TGIF's practice violates N.J.S.A. 56:8-2.5,
and constitutes an unconscionable commercial practice in
violation of N.J.S.A. 56:8-2. However, in order to obtain
damages, each plaintiff must show that he or she sustained an
16 A-3485-14T3
ascertainable loss and that the alleged unlawful conduct caused
the loss.
In this case, plaintiffs failed to show that common issues
of fact as to whether TGIF's customers who purchased unpriced
soda, beer or mixed drinks predominate over issues that pertain
to individual class members. The class definition approved by
the trial court assumes that any patron at a TGIF company-owned
restaurant who purchased those beverages sustained an out-of-
pocket loss "as a result of" TGIF's failure to list prices for
these items on the menu. The court's analysis fails for several
reasons.
The class definition erroneously includes all persons who
purchased an unpriced soda, beer or mixed drink regardless of
whether they reviewed the menu before purchasing the beverages.
However, a person cannot establish that he or she sustained an
ascertainable loss caused by TGIF's alleged unlawful conduct
unless that person reviewed the beverage section of the menu
before making the purchase. If a person did not look at the
beverage section of the menu, TGIF's failure to list prices on
the menu had no causal nexus to the person's decision to
purchase a particular beverage.
Furthermore, based upon this record, we must assume some
persons who purchased a soda, beer or mixed drink at a TGIF-
owned restaurant in the period at issue made decisions as to
17 A-3485-14T3
whether to order those beverages that had nothing whatsoever to
do with whether the prices were listed on the menu. For example,
a patron may have asked the price before ordering a soda, beer,
or mixed drink. If so, the patron would have been informed of
the price of the beverage before purchasing it.
In this regard, we note that Fox claims one of TGIF's
servers misinformed him of the prices of certain beverages that
he purchased. There is, however, no evidence that TGIF's servers
routinely misinformed customers as to the prices of beverages,
or that it was TGIF's practice to have its servers tell
customers one price and charge them a higher price later. In any
event, Fox's experience confirms that some TGIF patrons ask the
price of a beverage before purchasing it.
In addition, some of the persons who purchased a soda, beer
or mixed drink at company-owned TGIF restaurants in the relevant
period may have previously patronized one of TGIF's restaurants
and knew the prices that would be charged for these beverages.
Patrons also may have assumed the prices they would be charged
based on prices charged in other restaurants. Thus, the absence
of menu pricing for soda, beer and mixed drinks would not have
had any effect upon the decisions of these patrons to purchase
these beverages.
Plaintiffs allege, based on certain marketing studies and
tests, that TGIF patrons will spend an average of $1.72 more on
18 A-3485-14T3
beverages if the prices are not listed on the menu.2 However,
even if this allegation is proven, it would not establish that
all persons who purchased soda, beer and mixed drinks at TGIF-
owned restaurants spent more on these beverages because prices
were not listed on the menus. As we have explained, a patron may
have chosen to purchase a particular beverage on a specific date
for any number of reasons that have nothing to do with the lack
of menu pricing.
We also note that Dugan claims she was charged $2.00 for a
beer at the bar and was later charged $3.59 for the same beer at
a table in the restaurant. Dugan asserts that the bar price was
the price charged during "happy hour." Although Dugan may have
been misled to believe she would be charged the "happy hour"
price for both drinks, that may not be so as to other patrons
who made similar purchases.
We are therefore convinced that, with respect to the claims
under the CFA, the trial court erroneously found that issues of
fact common to members of the class predominate over issues that
affect individual class members. The court therefore erred by
allowing these claims to be maintained as a class action.
The decision in International Union of Operating Engineers,
2 We note that TGIF asserts that plaintiffs have misinterpreted
the studies and tests. TGIF also asserts that there is no
evidence that TGIF acted or relied upon these studies and tests.
19 A-3485-14T3
supra, 192 N.J. 372, supports our conclusion. In that case, the
plaintiff, a third-party payor of a healthcare benefits plan,
brought an action against the defendant, the manufacturer of the
prescription drug Vioxx, alleging it violated the CFA by
engaging in a fraudulent marketing campaign that induced "third-
party payors to accord Vioxx preferred status in their
formularies." Id. at 381.
In reversing the grant of class certification, the Supreme
Court found that although each proposed class member received
the same information from the defendant, the class members did
not react "in a uniform or even similar manner." Id. at 390. The
Court stated that each third-party payor
made individualized decisions concerning the
benefits that would be available to its
members for whom Vioxx was prescribed. The
evidence about separately created
formularies, different types of tier
systems, and individualized requirements for
approval or reimbursement imposed on various
plans' members and, to some extent, their
prescribing physicians, are significant.
That evidence convinces us that the
commonality of defendant's behavior is but a
small piece of the required proofs. Standing
alone, that evidence suggests that the
common fact questions surrounding what
defendant knew and what it did would not
predominate.
[Id. at 391.]
Here, the "commonality" of TGIF's alleged unlawful conduct
is but "a small piece of the required proofs." Ibid. As we have
20 A-3485-14T3
explained, there are numerous reasons why customers at TGIF-
owned restaurants may have purchased a soda, beer or mixed drink
in the relevant period, and whether the absence of menu pricing
caused those customers to sustain an ascertainable loss
cognizable under the CFA. Therefore, we conclude the court erred
by permitting plaintiffs to maintain a class action for the CFA
claims.
Our decision in the earlier appeal does not require a
different conclusion. There, we held that Dugan had pled
sufficient facts to state a claim under the CFA, noting that the
appeal involved review of the denial of a motion to dismiss for
failure to state a claim, and the complaint had to be "parsed
generously." Dugan v. TGI Fridays, Inc., supra, slip op. at 18.
We held that, viewing the complaint indulgently, Dugan had
stated a claim under the CFA.
However, we did not hold that all persons who purchased an
unpriced soda, beer or mixed drink at a TGIF-owned restaurant
necessarily sustained an ascertainable loss that was caused by
TGIF's alleged unlawful conduct. We also specifically declined
to address the issue of whether the matter should be certified
as a class action. Id. at 21-22.
IV.
TGIF further argues that plaintiffs failed to establish the
predominance requirement of Rule 4:32-1(b)(3) with respect to
21 A-3485-14T3
the claims under TCCWNA.
The purpose of the TCCWNA "is to prevent deceptive
practices in consumer contracts by prohibiting the use of
illegal terms or warranties in consumer contracts." Kent Motor
Cars, Inc. v. Reynolds & Reynolds Co., 207 N.J. 428, 457 (2011).
The TCCWNA provides in relevant part that:
No seller . . . shall in the course of his
business offer to any consumer or
prospective consumer or enter into any
written consumer contract . . . or display
any written . . . notice or sign . . . which
includes any provision that violates any
clearly established legal 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 . .
. notice or sign is given or displayed.
[N.J.S.A. 56:12-15.]
The TCCWNA also provides that any person who violates the
statute shall be liable to an aggrieved consumer for a civil
penalty of not less than $100, actual damages, or both at the
consumer's election, in addition to reasonable attorneys' fees
and court costs. N.J.S.A. 56:12-17.
The TCCWNA does not create any new consumer rights, rather
"[t]he rights, remedies, and prohibitions conferred by the
TCCWNA are 'in addition to and cumulative of any other right,
remedy or prohibition accorded by common law, Federal law or
statutes of this State.'" Shelton v. Restaurant.com, Inc., 214
N.J. 419, 428 (2013) (quoting N.J.S.A. 56:12-18).
22 A-3485-14T3
In the earlier appeal, we held that Dugan had alleged
sufficient facts to state a claim under the TCCWNA. Dugan v. TGI
Fridays, Inc., supra, slip op. at 18-20. We found that the
omission of prices from TGIF's menu qualified as an "affirmative
act" under the TCCWNA because that practice violated N.J.S.A.
56:12-15. Id. at 19. We also found that Dugan was a "consumer"
under the statute, and that "the affirmative act that may
trigger the TCCWNA is the offer encompassed by TGIF's menu." Id.
at 20.
Here, TGIF argues that plaintiffs cannot establish
predominance under Rule 4:32-1(b)(3) for the TCCWNA claims
because "each individual class member will be required to
demonstrate that he or she was provided with a menu that
violates the law[.]"
Plaintiffs allege that TGIF instructs its servers to hand
opened menus to all patrons. However, if TGIF gave its servers
such instructions, they may not have been always followed. For
example, a server may have forgotten to provide the menu to a
customer, or a patron may have told the server a menu was not
required. Individualized inquiries would be required to
determine whether each class member was handed a menu that
lacked beverage pricing.
Furthermore, claims for "actual damages" pursuant to
N.J.S.A. 56:12-17 would necessarily involve individual inquiries
23 A-3485-14T3
to determine whether each class member sustained a loss caused
by the absence of beverage pricing on TGIF's menus. Those
inquiries would be similar to the individual inquiries required
to determine whether the class members sustained losses
recoverable under the CFA.
We therefore conclude that with regard to their claims
under the TCCWNA, plaintiffs have not established that issues of
fact common to the members of the class predominate over issues
that only affect individual class members. We conclude the court
erred by allowing plaintiffs to maintain a class action to
pursue these claims.
In view of our decision, we need not consider TGIF's other
arguments regarding the class certification, or plaintiff's
contention that the court erred by excluding certain TGIF
patrons and purchases from the class.
Accordingly, the trial court's orders of December 23, 2014
and February 13, 2015, are reversed, and plaintiffs' cross-
appeal is dismissed. The matter is remanded to the trial court
for further proceedings on plaintiffs' individual claims. We do
not retain jurisdiction.
24 A-3485-14T3