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Barry v. New Jersey State Highway Authority

Decided: April 1, 1990.

JAMES J. BARRY, JR., DIRECTOR OF NEW JERSEY STATE DIVISION OF CONSUMER AFFAIRS, BY WILLIAM H. ROSS III, DIRECTOR OF ATLANTIC COUNTY DIVISION OF CONSUMER AFFAIRS, PLAINTIFFS,
v.
NEW JERSEY STATE HIGHWAY AUTHORITY, A BODY CORPORATE AND POLITIC OF THE STATE OF NEW JERSEY, OPERATING THE GARDEN STATE PARKWAY, DEFENDANTS



Gibson, J.s.c.

Gibson

This action requires the resolution of the previously unaddressed question of whether the New Jersey Highway Authority is subject to suit under the Consumer Fraud Act. N.J.S.A. 56:8-1 et seq. Under the circumstances presented here and for the reasons expressed below, it is the conclusion of this court that it is not. The issue is presented by way of cross-motions for summary judgment.

FACTUAL BACKGROUND

The Defendant, New Jersey Highway Authority (Authority), owns and operates the Garden State Parkway, one of the two major north-south highways in this state. Effective April 16, 1989 and with the Governor's approval, the Authority increased tolls on the Parkway from twenty-five to thirty-five cents. Coincidental with that increase, the Authority also offered discount tokens for a sixty day period. By permitting forty tokens to be purchased for ten dollars, purchasers were given a savings of approximately forty percent. The discount was advertised in a variety of ways including press releases, signs at the toll booths and signs on the sides of Authority trucks.

Shortly after the toll increase went into effect, plaintiff's agent, the Atlantic County Division of Consumer Affairs (ACDCA), began receiving complaints that the tokens were unavailable. An investigation by ACDCA confirmed that the

complaints were legitimate. When confronted, the Authority's explanation was that it had not anticipated the high demand for the tokens and that purchaser's were hoarding them, thereby thwarting recirculation. The Authority began limiting token sales to certain days per week but subsequent investigation revealed that even on those days, tokens were generally unavailable. Plaintiff filed this Complaint on June 8, 1989.

Although the Complaint is in four counts, generally it alleges a single cause of action under the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. Stated most simply, plaintiff claims that the Authority advertised that Parkway tokens could be purchased at a discount price for a specific time then fraudulently breached that promise by failing to make the tokens available in sufficient quantities to meet the reasonably anticipated consumer demands. Plaintiff seeks various forms of relief including the reinstatement of the discount sale, the issuance of rain checks whenever tokens are unavailable, the imposition of penalties for each offense and reimbursement for costs. Defendant denies any breach of the Act and seeks to dismiss the Complaint for that reason. It also seeks to dismiss on the ground that the Consumer Fraud Act does not apply to its actions, and, in particular, not to the sale of tokens. The arguments regarding the applicability of the Act will be treated first.

LEGAL CONCLUSIONS

Whether the Consumer Fraud Act applies to Authority actions is not answered with any clarity by either that Act, the New Jersey Highway Authority Act or existing case law. An examination of the Highway Authority Act is nevertheless helpful. The Authority was created in 1952 with the express intention of having it acquire, construct, maintain and operate certain limited access highways in New Jersey. N.J.S.A. 27:12B-1 et seq. Once created, it built the Garden State Parkway and has operated it ever since. N.J.S.A. 27:12B-4 makes it

clear the Authority is an instrumentality intended to exercise essentially public and governmental functions. When involved in the operation of an authorized project such as the Parkway, its actions are specifically deemed to be an "essential governmental function of the state." Ibid.

Included among the powers granted to the Authority is the power to sue and be sued in its own name, to hold property, exercise the power of eminent domain, enter into contracts, float bonds, collect tolls and establish and enforce rules and regulations governing its highway projects. N.J.S.A. 27:12B-5; Monarch Entertainment Bureau v. New Jersey Highway Authority, 715 F. Supp. 1290, 1291 (D.N.J.1989), aff'd, 893 F.2d 1331. Its members are appointed by the Governor with the advice and consent of the Senate and they may be removed by the Governor only for cause. The Governor also receives copies ...


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