Beginning now, nationwide advertisers and retailers could wish to pay the identical consideration to legislative and judicial developments in New Jersey that they lengthy have paid in California.
New Jersey’s Governor, Phil Murphy, got here into workplace in 2018 explicitly promising to remake New Jersey into “the California of the East Coast.” Just lately reelected and holding management posts in each the Nationwide Governors Affiliation and Democratic Governors Affiliation, Governor Murphy is constructing a nationwide profile.
Throughout Governor Murphy’s first time period, his Californiafying ambitions had been considerably checked by legislative leaders, notably within the State Senate. The 2021 election left each homes of the Legislature firmly in Democratic management, however brought on a big shift in management on either side of the aisle. A number of key leaders, together with the newly minted Senate President, are members of the plaintiffs’ bar. Client-friendly, business-unfriendly payments that may not beforehand have moved by the Senate are extra seemingly to take action now.
Instantly after the 2021 election, the Legislature rapidly handed, and Governor Murphy has signed, the “New Jersey Insurance coverage Honest Conduct Act,” a sweeping legislation permitting lawsuits in opposition to vehicle insurers for any “unreasonable delay or unreasonable denial of a declare.” The legislation doesn’t outline both time period, which implies insurance coverage firms will face appreciable uncertainty. Plaintiffs will argue for very broad interpretations of those phrases, and we must see how these arguments fare earlier than a state Supreme Court docket that quickly can have a majority of Murphy appointees (extra about which under). That is the sort of measure that we might even see extra of from the New Jersey Legislature within the present time period.
Proposals are pending within the Legislature to develop New Jersey’s already broad Client Fraud Act (“CFA”). One bill was launched that will add California-style “illegal” and “unfair” prongs to the CFA, phrases which were used to significantly develop the sweep of shopper fraud legal guidelines in California. One other bill would make it illegal to require any New Jersey shopper to agree in a kind contract to resolve disputes exterior the patron’s dwelling county, shorten a limitations interval, waive punitive damages, or pay extra to arbitrate a declare than it could price to sue in courtroom. The invoice would outline these and different phrases as presumptively unconscionable and as violations of the CFA. Comparable proposals are more likely to comply with, and no less than some are more likely to cross.
New Jersey briefly captured the enterprise tort highlight a number of years in the past with a boomlet of circumstances beneath the state’s distinctive Reality-in-Client Contract, Guarantee, and Discover Act (“TCCWNA”). The TCCWNA makes it unlawful for any contract supplied to a New Jersey buyer to comprise “any provision that violates any clearly established authorized proper.” The TCCWNA allows any “aggrieved shopper” to get well “a civil penalty of not lower than $100,” so its attraction to the category motion bar was apparent. Attorneys introduced fits difficult every thing from guarantee waivers in kind contracts to the absence of costs in restaurant menus.
Tons of of TCCWNA circumstances had been filed in a multi-year span, lots of which firms elected to settle. The TCCWNA mill saved spinning till New Jersey’s Supreme Court docket, in two choices from 2017 and 2018, largely defanged the legislation. The Court docket construed the time period “aggrieved shopper” narrowly and erected a excessive hurdle to bringing TCCWNA claims as class actions. These choices just about ended TCCWNA as a stand-alone class motion risk.
Importantly, nevertheless, the New Jersey Supreme Court docket make-up has modified since Governor Murphy took workplace in 2018, and can change additional within the close to future resulting from necessary retirements. By this time subsequent 12 months, Governor Murphy can have appointed a majority of the seven-member Court docket. These modifications are very more likely to make New Jersey an much more favorable venue for the plaintiff’s bar, and companies hoping for future Supreme Court docket choices like these within the TCCWNA circumstances could also be upset.
New Jersey’s federal bench, too, has turn into a tougher jurisdiction for the enterprise neighborhood. President Joseph R. Biden Jr., inherited vacancies to 6 of the District of New Jersey’s 17 licensed judgeships. He already has crammed 4 of them and has nominees pending for the ultimate two. Seven others are appointees of President Barack Obama. And though the Third Circuit Court docket of Appeals at present has a 7-6 majority of judges appointed by Republican Presidents, a emptiness is pending with extra anticipated.
Enterprise commerce teams just like the New Jersey Civil Justice Institute (“NJCJI”) monitor legislative and litigation developments within the state. (We generally write friend-of-the-court briefs to the New Jersey Supreme Court docket on behalf of NJCJI.) We’d be completely happy to talk with any shoppers who’ve operations or gross sales in New Jersey and could also be involved about these points.