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Woturski v. Federal Warranty Service Corp.

United States District Court, D. New Jersey

March 19, 2018

ROSE M. WOTURSKI, individually and on behalf of others similarly situated, Plaintiff,

          LEWIS G. ADLER LAW OFFICE OF LEWIS ADLER On behalf of Plaintiff

          JOHN R. VALES DENTONS U.S. LLP On behalf of Defendant


          HILLMAN, District Judge

         This matter arises under New Jersey's Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. § 56:12-14 to -18, a remedial consumer statute which allows an aggrieved party to collect either statutory damages or actual damages. Before the Court is Defendant's Motion to Dismiss and Plaintiff's Cross-Motion to Remand this matter to state court. The Court finding Plaintiff lacks Article III standing, Defendant's motion will be denied and Plaintiff's motion will be granted. Accordingly, this case will be remanded to New Jersey Superior Court.

         The Court takes the following facts from Plaintiff's May 18, 2017 Complaint. On August 19, 2014, Plaintiff purchased an appliance from Johnson's Appliances & Bedding. Plaintiff also purchased an accompanying service contract. The Complaint is in three counts. The first two counts allege the service contract contains terms that violated the Service Contract Act (SCA), N.J.S.A. § 56:12-87 to -97. Although there is apparently no private right of action under the SCA, the TCCWNA prohibits a consumer contract that violates “any clearly established legal right of a consumer or responsibility of a seller” under state or federal law.[1] The third count seeks a declaratory judgment that the service contract is contrary to New Jersey law.

         Plaintiff filed this action in New Jersey Superior Court on May 18, 2017 both individually and on behalf of all other New Jersey purchasers of the contract containing the same terms alleged to violate the TCCWNA. This case was removed to federal court on June 14, 2017.[2] On June 15, 2017, Defendant filed the pending Motion to Dismiss. On July 3, 2017, Plaintiff filed her opposition, along with a Cross-Motion to Remand.

         Defendant argues Plaintiff lacks Article III standing to sue in federal court.[3] Plaintiff alleges violations of the TCCWNA. “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.” Kent Motor Cars, Inc. v. Reynolds & Reynolds, Co., 25 A.3d 1027, 1044 (N.J. 2011). Plaintiff's claims are based on alleged misstatements of Plaintiff's rights and Defendant's responsibilities. Significantly, Plaintiff does not plead any kind of injury resulting from such misstatements. For the reasons that follow, the Court consequently finds Plaintiff does not have Article III standing.

         The Constitution confines the power of federal courts as extending only to “Cases” and “Controversies.” Art. III, § 2. “No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.” Raines v. Byrd, 521 U.S. 811, 818 (1997) (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 37 (1976)).

There are three well-recognized elements of Article III standing: First, an “injury in fact, ” or an “invasion of a legally protected interest” that is “concrete and particularized.” Second, a “causal connection between the injury and the conduct complained of[.]” And third, a likelihood “that the injury will be redressed by a favorable decision.”

In re Horizon Healthcare Servs. Data Breach Litig., 846 F.3d 625, 633 (3d Cir. 2017) (alteration in original) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 561 (1992)). “To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016).

         Spokeo dictates the outcome of this case. There, the Supreme Court identified that “Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Id. at 1549. “[E]ven in the context of a statutory violation, ” “Article III standing requires a concrete injury.” Id. “[B]are procedural violation[s], divorced from any concrete harm” do not satisfy the injury-in-fact requirement. Id. “Stated differently, not every ‘bare' violation of a right granted by a statute is inherently injurious. Rather, such a violation must result in a ‘concrete' harm.” Rubin v. J. Crew Grp., Inc., No. 16-2167, 2017 WL 1170854, at *3 (D.N.J. Mar. 29, 2017).

         “Thus, standing based on a violation of a statutorily created right turns on whether such a right is substantive or merely procedural.” Id. The District of New Jersey in Rubin found as follows in considering the case law that had emerged in the District of New Jersey since Spokeo:

[W]hat each of these courts has held is that without an underlying concrete harm, a plaintiff may not base his/her complaint solely on allegations of wrongdoing predicated on TCCWNA violations. To illustrate, if a consumer alleges that the terms and conditions of an online retailer's website violated the TCCWNA by excluding punitive damages in suits, that consumer would not have standing to bring a TCCWNA claim without also asserting an injury inflicted by the retailer that could entitle him/her to punitive damages at the outset. Absent that underlying harm, under Spokeo, the consumer's alleged TCCWNA violation is merely procedural.

         As Plaintiff has not pleaded a concrete injury, and consequently has not pleaded an injury-in-fact, the ...

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