On certification to the Superior Court, Appellate Division, whose opinion is reported at 396 N.J. Super. 267 (2007).
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
This matter calls upon the Court to consider whether a plaintiff, prior to instituting litigation pursuant to the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, must first request a refund of a claimed overcharge from an allegedly culpable merchant.
The facts that give rise to this dispute are not complicated. On March 13, 2003, plaintiff Rhonda Bosland purchased a new 2003 Jeep Grand Cherokee from defendant Warnock Dodge, Inc. (Warnock). She did not arrange for financing through the dealer, instead paying the full purchase price listed in the Retail Buyer's Order that served as Warnock's invoice. That Retail Buyer's Order included a $117 charge that was described only as a "Registration Fee."
Bosland asserts that she later learned that the applicable title and registration fees charged by the Motor Vehicle Commission at the time of her purchase were less than the $117 fee the dealer required her to pay. Bosland asserts that the applicable fee could only have been either $77 or $97, depending on how it was calculated. She therefore reasoned that the $117 charge must have included an additional documentary service fee that was neither disclosed nor itemized as required by the applicable automobile sales regulations.
Rather than demanding that Warnock refund to her the amount that she had been overcharged, Bosland filed a complaint, seeking relief both individually and on behalf of a class of similarly situated car buyers. Bosland's complaint included two statutory claims, one asserting that Warnock had violated the CFA, and the other relying on the provisions of the Truth-in-Consumer Contract, Warranty, and Notice Act, N.J.S.A. 56:12-14 to -18. The third cause of action was based on an alternative quasi-contractual theory of unjust enrichment.
The trial court granted Warnock's motion to dismiss. In explaining its basis for dismissing the CFA claim, the court reasoned that because Bosland had never complained about the fees and had paid them without objection, they could not be considered "unconscionable" or "an ascertainable loss." In analyzing the Truth-in-Consumer Contract claim, the court found that Bosland could not meet the requirements of that cause of action because her factual allegations were insufficient to establish that the contract violated any clearly established legal right.
The Appellate Division, in a published opinion, affirmed in part and reversed in part. Bosland v. Warnock Dodge, Inc., 396 N.J. Super. 267 (App. Div. 2007). The appellate panel concurred in the trial court's rejection of Bosland's unjust enrichment claim, but disagreed with the trial court's dismissal of the two statutory causes of action. In particular, the panel rejected the trial court's conclusion that Bosland's CFA claim was barred by her failure to demand a refund prior to filing her lawsuit. As part of the analysis about whether a pre-suit demand for a refund is required by the CFA, the panel explicitly rejected the reasoning of Feinberg v. Red Bank Volvo, Inc., 331 N.J. Super. 506 (App. Div. 2000), an earlier Appellate Division decision in which the court had referred to such a demand as "a necessary element of proof." The Appellate Division also reinstated Bosland's Truth-in-Consumer Contract claim, concluding that the complaint's CFA allegations also sufficed to support her claim that the contract violated a clearly established legal right.
The Supreme Court granted Warnock's petition for certification in order to decide whether an attempt to obtain a refund from a merchant is an essential prerequisite for a CFA claim. 194 N.J. 262 (2008).
HELD: The Consumer Fraud Act does not require a consumer to seek a refund from an offending merchant prior to filing a complaint.
1. The Court's task in statutory interpretation is to determine and effectuate the Legislature's intent. This task is often assisted by interpreting a statute consistently with the overall statutory scheme in which it is found. (pp. 10-12)
2. The CFA, in its original form, authorized only the Attorney General to seek redress for violations of its provisions. In 1971, the Legislature amended the CFA, expanding it significantly to include a private right of action through the enactment of what was subsequently codified as N.J.S.A. 56:8-19. That section, which is central to this dispute, provides that "any person who suffers any ascertainable loss . . . as a result of" defendant's violation of the CFA may file an action. Although the legislative history surrounding this enactment is sparse, it is clear that the intention was to greatly expand protections for New Jersey consumers. (pp. 12-15)
3. In analyzing claims under the CFA, the Court has found that there are only three elements required for the prima facie proofs: 1) unlawful conduct by defendant; 2) an ascertainable loss by plaintiff; and 3) a causal relationship between the unlawful conduct and the ascertainable loss. Each of these elements is found within the plain language of the statute itself; each is, without any question, a prerequisite to suit. The plain language of the CFA does not impose upon any putative plaintiff the requirement that he or she first seek a remedy directly from the offending merchant. The question is whether the term "ascertainable loss" or the causal nexus requirement embodied in the statutory phrase "as a result of" or the public policy considerations that underlie the CFA suggest that a pre-suit refund demand is implicit in the CFA. (pp. 15-18)
4. The Court has previously considered the meaning of the term "ascertainable loss" and has concluded that it means that plaintiff must suffer a definite, certain and measurable loss, rather than one that is merely theoretical. Here, Bosland was the victim of an overcharge that can be easily quantified and thus is ascertainable within the meaning of the CFA. That she could have requested a refund and, theoretically, could have secured complete relief in no way diminishes the fact that she sustained an immediate, quantifiable loss when she paid the fee representing the overcharge. Nor is the Court persuaded that the causal nexus element of the prima facie proofs required for CFA relief implicitly includes the requirement that the victimized purchaser make a pre-suit demand for a refund. Such an interpretation is contrary to the plain language that the Legislature chose and to its clear intent. (pp. 18-21)
5. Warnock urges the Court to embrace the decision of the appellate panel in Feinberg on public policy grounds. The Court declines to do so for two reasons. First, the Court considers the Feinberg decision to be far narrower than Warnock suggests, involving a plaintiff whose claim was rejected, in large part, because the proofs were inadequate to demonstrate what part of the loss was caused by the merchant's allegedly unlawful practice. Second, the Court disagrees with Warnock's view of the public policy it urges the Court to embrace, finding it to be contrary to that expressed by the Legislature. When confronted, as the Court is here, with a plaintiff who asserts that she was the victim of an overcharge which itself is small in amount, and who seeks recovery for herself and on behalf of numerous others with "nominal" claims, the Court cannot overlook the reality that, without the remedy that the CFA affords, all of those wrongs might go unvindicated. If the Court were to require plaintiffs, as a precondition to filing a complaint under the CFA, to first demand a refund, it would create a safe harbor for an offending merchant. A merchant could rely on the pre-suit refund demand requirement, boldly imposing inflated charges at no risk, and planning to refund the overcharges only when asked. Such an analysis of the CFA would limit relief by making it available only to those consumers who are alert enough to ask for a refund, while allowing the offending merchant to reap a windfall. The court sees in the broad remedial purposes of the CFA a strong contrary expression of public policy. (pp. 21-24)
6. In theory, there may be circumstances in which requiring a pre-suit demand for relief might be appropriate or in which a consumer's failure to seek a refund or other remedy in advance of turning to the courts should operate to limit the recovery otherwise available under the CFA. Nevertheless, because the language and the intent of the statute are clear and its purposes are plain, the Court considers the concerns raised by Warnock to be matters that call for an examination and a weighing of public policy considerations not within the language of the CFA itself. As such, they are for the Legislature, and not for this Court, to entertain. (pp. 24-25)
The judgment of the Appellate Division is AFFIRMED and the matter is REMANDED to the Law Division for further proceedings.
CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA, WALLACE, and RIVERASOTO join in JUSTICE HOENS' opinion. JUSTICE ALBIN did not participate.
The opinion of the court was delivered by: Justice Hoens
The Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, affords broad protections to New Jersey consumers. From 1960, when the Legislature first enacted the CFA in its original form and when it only authorized actions by the Attorney General, see L. 1960, c. 39, until its most recent amendment in 2007, L. 2007, c. 14, (amending N.J.S.A. 56:8-1.1 as it relates to transportation for temporary service workers), the history of the Act demonstrates a strong and consistent pattern of expanding the rights of consumers and protecting them from a wide variety of marketplace tactics and practices deemed to be unconscionable.
This matter calls upon this Court to consider whether a plaintiff, prior to instituting litigation pursuant to the CFA, must first request a refund of a claimed overcharge from an allegedly culpable merchant. Our reading of the plain language of the statute and our understanding of the Legislature's overall intent, both in enacting the CFA and in expanding its scope, compels us to answer this question in the negative. We therefore conclude that the CFA does not require a consumer, who has been victimized by a ...