Another TCCWNA “Website” Terms & Conditions Class Action Dismissed

Over the last year – and as we have previously reported – online retailers have repeatedly been targeted by threatened or filed class actions, premised on their website terms and conditions purportedly containing unlawful terms that violate the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”). Many of these cases have been dismissed by trial courts on state law grounds and, in federal court actions, for failure to demonstrate “injury in fact,” a fundamental requirement for Article III standing. Continuing this trend, the District of New Jersey recently dismissed yet another website terms and conditions class action grounded in the TCCWNA, Hite v. Lush Internet Inc.

In Hite – as in so many of these lawsuits – “Plaintiff visited Defendant’s website . . . and purchased one of Defendant’s cosmetic products.” Yet, she “[d]id not allege she has any claim about the product that she purchased, such as fraud, product liability or tort.” Instead, “[h]er quarrel [was] with the provisions of the terms of use of the website” in that she “generally allege[d] that the exculpatory clauses contained in the Terms of Use violate . . . the TCCWNA because they unlawfully disclaim all tort liability.”

Chief Judge Simandle dismissed the case, however, holding that “Plaintiff has not alleged an injury sufficient to confer standing under the statute,” emphasizing that the damages provision of the TCCWNA only provides a remedy to an “aggrieved consumer.” And this statutory standing requirement, however minimal, could not be met by a plaintiff who “has plead that she was unaware of the Terms of Use and has demonstrated no way in which she has been harmed by them.” According to Judge Simandle, “[b]ased upon the allegations in the Amended Complaint, the harm that Plaintiff has suffered from the allegedly unlawful limitations of liability in the Terms of Use is metaphysical at best.”

Although not a case decided on constitutional standing grounds, “Defendant liken[ed] the ‘aggrieved consumer’ inquiry to the analysis the Supreme Court recently undertook in Spokeo, Inc. v. Robins in determining whether a plaintiff had Article III standing to sue under a particular statute, a comparison the Court [found] useful.” Indeed, evoking key phraseology from Article III jurisprudence, the court explained that “Plaintiff has not alleged concretized harm of the sort that the TCCWNA was meant to prohibit and she lacks standing under the TCCWNA to challenge these terms.”

Judge Simandle thus dismissed the complaint with prejudice, dealing yet another blow to the overly expansive scope of the TCCWNA that plaintiffs have recently been pursuing.

Joshua S. Levy is an Associate in the Gibbons Business & Commercial Litigation Department.