By Shawn Schatzle, Esq. of Havkins, Rosenfeld, Ritzert & Varriale, LLP
The Prudential Center in Newark, New Jersey is home to the New Jersey Devils hockey team and the Seton Hall Pirates college basketball team. It was also the former home of the New Jersey Nets basketball team before the franchise relocated to Brooklyn. In addition to sporting events, the facility regularly hosts concerts, professional wrestling matches and mixed martial arts bouts. One regular attendee of events at the Prudential Center, however, contends that the “Terms and Conditions” of its website violate New Jersey law.
Plaintiff Josephine Guzman, on behalf of herself and all others similarly situation, recently filed a class action lawsuit in the United States District Court of New Jersey, in which she alleges that Devils Arena Entertainment, LLC (“Devils Arena”), the operator of the Prudential Center, has imposed illegal and exculpatory provisions upon all users of its website. She alleges that Devils Arena has unlawfully sought to nullify the legal duties and responsibilities it owes its consumers. Ms. Guzman’s claims are based primarily on New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”).
The TCCWNA is a consumer protection law which provides standing to consumers to obtain damages from a seller who provides a contract, warranty, notice or sign which includes language that violates New Jersey or federal law in any respect. See N.J.S.A. 56:12-14. To prove a TCCWNA claim, a plaintiff must show that: (1) he or she is a consumer or potential consumer within the statute’s definition; (2) the defendant is a seller; (3) the defendant (a) offers or enters into a written consumer contract, or (b) gives or displays any written consumer warranty, notice, or sign; and (4) the offer or written contract, warranty, notice or sign includes a provision that violates any clearly established legal right of a consumer or responsibility of a seller. See MB Imps., Inc. v. T&M Imps., LLC, 2012 U.S. Dist. LEXIS 168693, 21 (D.N.J. Nov. 28, 2012).
Essentially, any writing that may be shown to a consumer in connection with the sale of a product or service may constitute a “notice” under the TCCWNA. See Watkins v. DineEquity, Inc., 2012 U.S. Dist. LEXIS 122677, 17 (D.N.J. Aug. 29, 2012). The TCCWNA can impose liability on a seller who merely “gives or displays” such a notice. See MB Imps., Inc. v. T&M Imps., LLC, 2012 U.S. Dist. LEXIS 168693, 21 (D.N.J. Nov. 28, 2012). A consumer is defined under the statute as “any individual who buys … any … property … or service … which is primarily for personal, family or household purposes.” See N.J.S.A.56:12-15. The statute has specifically been applied to online retailers. See Shelton v. Restaurant.com, Inc., 2013 N.J. Lexis 726 (Sup. Ct. N.J. 2013). It has also been applied to the sale of tickets to live events. See Katz v. Live Nation, Inc., 2010 U.S. Dist. LEXIS 60123 (D.N.J. June 17, 2010).
Notably, the statute also applies to prospective consumers and therefore requires no agreement or contract between the consumer and the seller, nor does it even require proof of any actual damages. Any seller may be liable for a civil penalty of not less than $100 or actual damages, at the election of the consumer, if the seller violates the TCCWNA. See Slack v. Suburban Propane Partners, L.P., 2010 U.S. Dist. LEXIS 135530, 16 (D.N.J. Dec. 22, 2010). The Superior Court of New Jersey, Appellate Division has held that class actions are permissible under the TCCWNA. See United Cons. Fin. Ser. v. Carbo, 982 A.2d 7 (N.J. Sup. Ct. App. Div. 2009).
A seller who makes any statement in writing that is related to the sale of a product or service may be held liable for damages under the TCCWNA in the event that the statement is deemed to violate New Jersey law or federal law, regardless of whether the consumer in question actually sustained any damages.
Ms. Guzman’s claims under the TCCWNA are based on numerous provisions of the Prudential Center’s website Terms and Conditions. For example, she points to language which limits the liability of Devils Arena for any damages arising out of a consumer’s use of the website, including damages related to viruses that may infect a computer through the downloading of information from the website. She asserts that this provision violates the well-established duty of care to avoid creating an unreasonable risk of harm, as it essentially bars consumers from asserting claims against Devils Arena even if it negligently managed or maintained its website.
Additionally, Ms. Guzman notes that the aforementioned provisions on the web-site also purport to specifically bar consumers from seeking punitive damages. She asserts that such language violates the New Jersey Punitive Damages Act (“NJPDA”). Furthermore, and among other allegations, Ms. Guzman points to language in the Terms and Condition which appears to limit its liability for the actions of third-parties who intercept personal information through the web site. She asserts that this language unlawfully serves to waive Devils Arena’s duty to take reasonable steps to protect consumers from the criminal acts of third-parties.
In response to Ms. Guzman’s claims, Devils Arena may file a motion to dismiss, which will seek to argue that her claims should not be subject to class certification. Devils Arena may also argue that the various provisions cited by Ms. Guzman do not violate any clear provision of New Jersey law and federal law, and that she has therefore failed to state a cognizable cause of action. However, if Ms. Guzman can overcome such arguments, then the potential damages may be relatively large, even if no member of the purported class sustained any actual damages. As the TCCWNA imposes statutory damages of at least $100 per consumer, a class of 1,000 plaintiff would result in damages of at least $100,000.
This case is a reminder for sports organizations — and businesses of any type — that engage in commerce directed towards New Jersey consumers to ensure that the fine print associated with their products is lawful. Although a business may be selling products and services in good faith, a technical error in the fine print could result in damages under the TCCWNA.
