NJ District Judge Tosses Website Warranty Claims Against J Crew


In an unpublished decision issued on March 29, 2017, a New Jersey District Court judge dismissed a consumer plaintiff's lawsuit brought against the retailer J. Crew alleging that the company's website terms and conditions violated New Jersey's Truth in Consumer Contract, Warranty and Notice Act ("TCCWNA), N.J.S.A. 56:12-14, et seq. Rubin v. J. Crew Group, Inc., Case No. 16-2167 (FLW)(D.N.J. March 29, 2017). The full opinion is reported here.

"The TCCWNA . . . prohibits a seller from entering into a contract with a consumer that includes any provision that violates a federal or state law." Bosland v. Warnock Dodge, Inc., 396 N.J. Super. 267, 278 (App. Div. 2007); Kent Motor Cars, Inc. v. Reynolds and Reynolds Co., 207 N.J. 428, 457 (2011) ("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.").

To state a claim under the TCCWNA, a plaintiff must allege each of the following: (1) the plaintiff is a consumer within the statute's definition; (2) the defendant is a seller; (3) the defendant offers a consumer contract or gives or displays any written notice or sign; and (4) the contract, notice or sign includes a provision that "violate[s] any legal right of a consumer" or responsibility of a seller. Mattson v. Aetna Life Ins. Co., 124 F. Supp. 3d 381, 392-93 (D.N.J. 2015) (citing Watkins v. DineEquity, Inc., 591 Fed. Appx. 132, 135 (3d Cir. 2014)).

At issue in the case were the following boilerplate language appearing on the J. Crew website:

IN NO EVENT SHALL J.CREW, ITS AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR CONTENT OR SERVICE PROVIDERS BE LIABLE TO YOU FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, LOSSES OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE OR OTHERWISE) ARISING FROM OR IN ANY WAY RELATED TO THE USE OF, OR THE INABILITY TO USE, OR THE PERFORMANCE OF THE SITE OR THE CONTENT AND MATERIALS OR FUNCTIONALITY ON OR ACCESSED THROUGH THE SITE, INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE, OR ANTICIPATED PROFITS, OR LOST BUSINESS, DATA OR SALES OR ANY OTHER TYPE OF DAMAGE, TANGIBLE OR INTANGIBLE IN NATURE, EVEN IF J.CREW OR ITS REPRESENTATIVE OR SUCH INDIVIDUAL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME JURISDICTIONS DO NOT ALLOW THIS LIMITATION OR EXCLUSION OF LIABILITY, SO SOME OF THE ABOVE LIMITATIONS MAY NOT APPLY TO YOU.

Indemnification: You agree to defend, indemnify and hold J.Crew, its directors, officers, employees, agents and affiliates harmless from any and all claims, liabilities, damages, costs and expenses, including reasonable attorneys' fees, in any way arising from, related to or in connection with your use of the Site, your violation of the Terms or the posting or transmission of any materials on or through the Site by you, including, but not limited to, any third-party claim that any information or materials you provide infringes any third-party proprietary right.

In a nutshell, the plaintiff argued that the aforementioned exculpatory and indemnification terms on the J. Crew website violated the TCCWNA because such language sought to impermissibly restrict J. Crew's liability and legal duty to its customers to ensure that there is no unreasonable risk or harm associated with purchasing products from its website, or in using their products. In addition, plaintiff accused J. Crew of attempting to prevent consumers from pursuing certain rights and remedies relating to punitive damages and statutory damages and costs related to any illegal actions on its website.

In response to the Complaint J. Crew filed a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), the principal argument being that plaintiff lacked legal standing to maintain a claim under the U.S. Constitution's grant of federal jurisdiction in the district court.

The District Court sided with J. Crew, concluding that plaintiff lacked the requisite legal standing because her Complaint failed to recite any allegation that she relied on the website terms and conditions which caused her to suffer an injury. A statutory violation, even if proven, does not provide the basis of a federal cause of action unless the plaintiff can demonstrate injury as a result.

Here, the plaintiff's Complaint was bereft of any allegations that she suffered an injury as a result of purchasing merchandise from J. Crew's website or from using the website. Instead, she was merely trying to argue that the website terms and conditions violated the TCCWNA without citing an actual injury. Consequently, she failed to satisfy the "injury-in-fact" requirement necessary to maintain standing under Article III of the U.S. Constitution prompting the District Court to dismiss her Complaint.

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