Cameron v. S. Jersey Pubs, Inc.

Decision Date11 July 2019
Docket NumberDOCKET NO. A-5177-17T2
Citation213 A.3d 967,460 N.J.Super. 156
Parties Robert CAMERON on behalf of himself and all other similarly situated, Plaintiff-Appellant, v. SOUTH JERSEY PUBS, INC., d/b/a TGI Friday's, Inc., Defendant-Respondent.
CourtNew Jersey Superior Court — Appellate Division

Wesley G. Hanna argued the cause for appellant (Law Office of Sander D. Friedman, LLC, attorneys; Sander D. Friedman and Wesley G. Hanna, of counsel and on the briefs).

Joseph A. Gallo argued the cause for respondent (McGivney, Kluger & Cook, PC, attorneys; Joseph A. Gallo and William D. Sanders, of counsel and on the brief).

Before Judges Yannotti, Rothstadt and Natali.

The opinion of the court was delivered by

ROTHSTADT, J.A.D.

In this appeal, we are asked to determine whether the Law Division properly denied plaintiff's motion for class certification under Rule 4:32-1(b)(2) where plaintiff's claims were similar to those considered by the New Jersey Supreme Court in Dugan v. TGI Fridays, Inc., 231 N.J. 24, 171 A.3d 620 (2017). In Dugan, the Court held that class certification under Rule 4:32-1(b)(3) was not appropriate based on a "price-inflation" theory. 231 N.J. at 34, 171 A.3d 620. The Dugan plaintiffs argued that TGI Friday's, Inc. (TGIF), the restaurant chain, violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-2.2 and 2.5, and the Truth in Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18, by failing to disclose the prices it charged for beverages on its menus. Ibid. They claimed that TGIF was able to charge each member of the class, across the board, $1.72 more than the "fair" or "reasonable" prices that the market would bear if the prices had been disclosed on the menu. Ibid. The Court recognized this as a "price-inflation" theory of damages and held that (b)(3) class certification was not appropriate under the CFA or the TCCWNA because each class member's claim was dependent upon their individual dining experiences and, under the TCCWNA, the Legislature did not intend for the Act to impose substantial financial penalties for violations.

We conclude that Dugan's holding did not require the denial of plaintiff's motion for (b)(2) certification in this case because the Court's concerns in Dugan were not relevant to plaintiff's application for (b)(2) certification. To hold otherwise, as suggested by our dissenting colleague, will not only "make it more difficult for a class of ... defrauded consumers to act collectively in pursuit of a common remedy against a corporate wrongdoer," Dugan, 231 N.J. at 75, 171 A.3d 620 (Albin, J., dissenting), but also it will in fact slam the courthouse doors shut on them, rather than "open[ing] the ... doors for those who cannot enter alone." Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 104, 922 A.2d 710 (2007).

We granted plaintiff Robert Cameron individually, and on behalf of all others similarly situated, leave to appeal from the Law Division's order denying his motion for (b)(2) class certification. Plaintiff's complaint alleges that defendant South Jersey Pubs Inc., doing business as TGIF, violated the CFA and the TCCWNA by failing to list beverage prices on its menu. Plaintiff seeks monetary damages for himself as well as injunctive and declaratory relief for all individuals who received a menu and ordered a beverage from a menu without a price in one of defendant's two establishments during a specific time period. He specifically seeks permanent injunctive relief directing defendant to include beverage prices on its menus and a declaration that the failure to do so is an unlawful commercial practice under the CFA and a violation of the TCCWNA. On appeal, plaintiff argues that the motion judge erred in denying his motion for class certification because he satisfied the requirements for (b)(2) class certification. We agree and reverse the denial of (b)(2) class certification.

I.

We glean the following facts from the motion record. Defendant is a franchisee of TGIF and owns and operates two TGIF restaurants, one in Toms River and the other in Manahawkin. On August 1, 2012, plaintiff went to defendant's restaurant in Toms River.1 He was given a menu, initially ordered a water, then his meal, and a beer, and then added a soda. He believed that all of this, plus tip, would cost about $20. After finishing his meal, plaintiff was presented with the bill and was shocked to see that he had been billed over "$5[ ] for a mass produced beer, and ... close to ... $3[ ] ... for a soda." On his way out, plaintiff looked at a menu and noticed that the drink prices were not listed. Plaintiff stated that he never would have ordered the drinks if the prices were listed.

Thereafter, plaintiff filed his complaint.2 On December 24, 2015, plaintiff filed an initial motion for class certification, but withdrew it on March 21, 2016. On September 13, 2017, he renewed his motion for class certification under Rules 4:32-1(b)(2) or (b)(3). Plaintiff sought a class of "[a]ll customers of ... [defendant's] restaurants who purchased items from [a] menu that did not have a disclosed price" during the period from August 1, 2006 through the present date.3 However, on October 5, 2017, a day after the Supreme Court issued its opinion in Dugan, plaintiff withdrew his motion for class certification under (b)(3) for damages and relied solely on class certification under (b)(2) for injunctive relief.

While his renewed motion was pending, plaintiff filed an amended complaint in November 2017. In the amended complaint, plaintiff alleged that defendant violated the CFA and the TCCWNA based on its failure to list certain beverage prices on its menu. According to plaintiff, defendant's actions were contrary to N.J.S.A. 56:8-2.2 and N.J.S.A. 56:8-2.5.4 Plaintiff also asserted claims for breach of contract and unjust enrichment. The complaint demanded monetary damages for plaintiff and a "proposed class ... of all customers of ... [defendant's] restaurants who purchased items from the menu that did not have a disclosed price[,]" and declaratory and injunctive relief on behalf of himself and the class. Plaintiff specifically sought a declaration that "[d]efendant's practice ... [was] unlawful" and an injunction to prevent "[d]efendant from continuing to offer beverages for sale without written price disclosures." Defendant filed an answer denying the allegations in the complaint.

According to plaintiff, despite the age of the case, no discovery had been completed prior to the class certification motion being considered by the court. However, plaintiff relied upon discovery obtained in Dugan to support his complaint's factual contentions. Citing to that discovery, plaintiff alleged that TGIF intentionally developed a plan to not disclose beverage prices on its restaurants' menus as a form of "menu engineering," after it conducted various market studies that concluded by not disclosing prices, it could charge higher prices to its patrons.5 Relying upon a deposition taken in Dugan from one of defendant's officers in this case, plaintiff alleged that defendant followed TGIF's procedure from 2008 through 2016 and he argued that defendant stopped doing so only to avoid being held liable in this litigation.

On April 27, 2018, the motion judge heard argument and afterward denied plaintiff's (b)(2) class certification motion, placing his reasons on the record that day. Initially, the judge opined that the CFA "violations here [were] not clearly established[,] which would warrant ... injunctive relief," but that was "not dispositive." He also observed that the CFA was not "all about" a litigant being able to pursue "comprehensive injunctive proceedings brought on behalf of thousands ... of individuals who are now being told they don't have to worry about whether they've been damaged ...." He also found that the purported class was "a large group of people.... [that was] hard to determine ...." According to the judge, injunctive relief was not necessary because it was "future oriented" and there was no "showing that any individual or members of the class would ... suffer future ... grievances.... [as] the whole purpose of an injunction is to avoid damages."

Addressing the purported class, the judge found that it consisted of "thousands of ... [people] who were just simply identified if [they] showed up [at defendant's establishment,]" so the class was "generalized." He then turned back to the CFA and stated that in determining class certification under (b)(2), "you don't have to worry about predominance," as required by (b)(3), but found that "cohesiveness require[d] th[e] [c]ourt to search through the record ... [and] the potential claims to determine whether ... the interests of the individuals are so disparate and so lack[ing] of cohesion that it would make it inappropriate for a class action."

Applying that standard, the judge concluded that there was no evidence of cohesiveness, especially here "where one consumer can go off and get ... injunct[ive relief] without having some kind of proof of ascertainable loss as it applies to the remainder of the group." The judge distinguished this case from Laufer v. U.S. Life Ins. Co., 385 N.J. Super. 172, 188, 896 A.2d 1101 (App. Div. 2006), in which we held, in part, that only a putative class plaintiff needs to demonstrate ascertainable loss under the CFA to maintain a (b)(2) class action for purported violations of the CFA. The judge stated that although the putative class plaintiff in Laufer was only required to demonstrate ascertainable loss, "ascertainable loss [was] evident in the remainder of the group."

Relying on the Court's opinion in Dugan, the judge concluded that "if damage claims can't be subject to class action, then ... injunctive [relief] can't be subject to class action because injunctive [relief] is secondary to the damage claims in the consumer protection world unless you're the Attorney General. Then you don't...

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