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Martinez-Santiago v. Public Storage

United States District Court, D. New Jersey

March 29, 2019

JACKELINE MARTINEZ-SANTIAGO, on behalf of herself and other persons similarly situated, Plaintiff,
v.
PUBLIC STORAGE, Defendant.

          Michael A. Galpern, Esq. Andrew P. Bell, Esq. James A. Barry, Esq. LOCKS LAW FIRM, LLC 801 N. Kings Highway Cherry Hill, N.J. 08034 -and- Charles N. Riley, Esq. LAW OFFICES OF CHARLES N. RILEY, LLC 900 N. Kings Highway, Suite 308 Cherry Hill, N.J. 08034 Attorneys for the Plaintiff

          William Patrick Reiley, Esq. Casey Gene Watkins, Esq. BALLARD SPAHR, LLP and John Keker, Esq. (pro hac vice) Reid P. Mullen, Esq. (pro hac vice) Simona A. Agnolucci, Esq. (pro hac vice) KEKER & VAN NEST LLP Lauren R. Goldman, Esq. (pro hac vice) MAYER BROWN LLP Attorneys for Defendant

          OPINION

          JEROME B. SIMANDLE, U.S. DISTRICT JUDGE

         I. INTRODUCTION

         This is a certified class action lawsuit concerning alleged violations of New Jersey's Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”), N.J.S.A. 56:12-15 et seq. Plaintiff Jackeline Martinez-Santiago (hereinafter, “Plaintiff” or “Martinez-Santiago”), on behalf of herself and all similarly situated individuals, generally alleges that Defendant Public Storage (hereinafter, “Defendant”) violated TCCWNA with respect to four provisions within the rental agreements that were previously used in its lease of private storage spaces to consumers in New Jersey. The class, as certified, consists of approximately 160, 000 members defined as follows:

All natural persons who since September 7, 2007 entered into lease agreements with Defendant in the State of New Jersey. Excluded from the Cass are Defendant, each of its parents, subsidiaries, authorized distributors and affiliates, and its legal representatives, officers, board members and the heirs, successors, and assigns of any excluded person.

Martinez-Santiago v. Pub. Storage, 312 F.R.D. 380, 386 (D.N.J. 2015). Plaintiff seeks at least the minimum $100 statutory penalty under TCCWNA for each class member. See N.J.S.A. § 56:12-17.

         Currently pending before the Court are Defendant's motions to decertify the class [Docket Item 206] and for summary judgment [Docket Item 182], as well as Plaintiff's cross-motion for partial summary judgment [Docket Item 187] and motion to preclude testimony of Ronald Schaible [Docket Item 184.] The Court heard oral argument on these motions on September 6, 2017. [Docket Item 244.] Shortly thereafter, however, the Court was persuaded to temporarily stay this action pending judgment of the Third Circuit in two consolidated TCCWNA consumer contract cases, Spade v. Select Comfort Corp., No. 16-1558 (3d Cir.) and Wenger v. Bob's Discount Furniture, No.16-1558 (3d Cir.), wherein the Third Circuit certified the following question of state law to the New Jersey Supreme Court: “Is a consumer who receives a contract that does not comply with the Furniture Delivery Regulations, but has not suffered any adverse consequences from the noncompliance, an ‘aggrieved consumer' under the TCCWNA?” The New Jersey Supreme Court has since answered that question with a resounding “no, ” holding that “[i]n the absence of evidence that the consumer suffered adverse consequences as a result of the defendant's regulatory violation, a consumer is not an ‘aggrieved consumer' for purposes of the TCCWNA.” Spade v. Select Comfort Corp., 181 A.3d 969, 978-981 (N.J. 2018).

         The principal issues to be determined at this stage are whether Plaintiff and this class can satisfy Article III's standing requirements and, if so, whether the class should remain certified following the New Jersey Supreme Court's decision in Spade. For reasons discussed below, the Court concludes that named Plaintiff, who undoubtedly suffered a “concrete” injury, has standing under Article III to bring suit on behalf of absent class members, but nevertheless finds that the certified class no longer satisfies the requirements of Rule 23, Fed. R. Civ. P., in light of the New Jersey Supreme Court's holding in Spade which, when applied here, determines that at least 99.98% of the class will be unable to state a TCCWNA claim, as a matter of New Jersey law. Accordingly, the Court will grant Defendant's motion for decertification and dismiss the remaining motions without prejudice because the entire basis and premise of this case has essentially disappeared.

         II. FACTUAL BACKGROUND AND PROCEDURAL BACKGROUND

         The Court incorporates by reference the factual background and procedural history of this case as described in its earlier opinions, including Martinez-Santiago v. Pub. Storage, 38 F.Supp.3d 500 (D.N.J. 2014) and Martinez-Santiago v. Pub. Storage, 312 F.R.D. 380 (D.N.J. 2015), and recounts only those facts necessary for resolution of the pending motions.

         Ms. Martinez-Santiago, a resident of New Jersey at all relevant times, entered into a month-to-month rental agreement with Defendant for a storage space located in Sicklerville, New Jersey on February 7, 2012. [Docket Item 182-9 at ¶¶ 5 & 7.] She listed her boyfriend, Mr. Orlando Colon, as an “Alternate Contact” on her lease agreement. [Id. at ¶ 8.] Mr. Colon subsequently injured himself after he slipped on ice in front of Plaintiff's storage unit [id. at ¶ 9], and he sued Defendant for his injuries in New Jersey Superior Court, alleging negligence. [Docket Item 188-1 at ¶ 13.]

         In the Superior Court action, Defendant filed an amended answer and third-party complaint naming Ms. Martinez-Santiago as a third-party defendant in Colon's lawsuit. [Id. at ¶ 14.] Defendant sought indemnification from Martinez-Santiago because of a provision in the storage facility lease agreement which required Martinez-Santiago to indemnify Defendant from any loss incurred by Defendant arising out of Martinez-Santiago's use of the facility [id. at ¶ 16], including “claims of injury or loss by Occupant's visitors or invitees.” [Docket Item 182-9 at ¶ 26.] Ultimately, Defendant settled Colon's suit and voluntarily dismissed the third-party complaint against Martinez-Santiago. [Id. at ¶¶ 16 & 18] On December 3, 2013, Martinez-Santiago filed this putative class-action in the Superior Court of New Jersey, Camden County [id. at ¶ 19], and Defendants removed the action to this Court. [Docket Item 1.]

         At issue in this case are four provisions that were in Defendant's rental agreement between September 2007 and October 2014:

• Owner and Owner's Agents will have no responsibility to Occupant or to any other person for any loss, liability, claim, expense, damage to property or injury to persons (“Loss”) from any cause, including without limitation, Owner's and Owner's Agents active or passive acts, omissions, negligence or conversion, unless the Loss is directly caused by Owner's fraud, willful injury or willful violation of law (“Exculpatory Clause”);
• Occupant shall indemnify and hold Owner and Owner's Agents harmless from any loss incurred by Owner and Owner's Agents in any way arising out of Occupant's use of the Premises or the Property including, but not limited to claims of injury or loss by Occupant's visitors or invitees (“Indemnity Clause”);
• Any claim, demand, or right of Occupant, and any defense to a suit against Occupant, that arises out of this Lease/Rental Agreement, or the storage of property hereunder (including, without limitation, claims for loss or damage to stored property) shall be barred unless Occupant commences an action (or, in the case of a defense, interposes such defense in a legal proceeding) within twelve (12) months after the date of the act, omission, inaction or other event that gave rise to such claim, demand, right or defense (“Limitations Clause”);
• This Lease/Rental Agreement shall be governed and construed in accordance with the laws of the state in which the Premises are located. If any provision of this Lease/Rental Agreement shall be invalid or prohibited under such law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of the Lease/Rental Agreement (“Severability Clause”).

[Docket Item 187-8.] Plaintiff argues that each provision violates TCCWNA, which makes it unlawful for a lessor to offer or enter into a written contract that “includes any provision that violates any clearly established legal right of a consumer or responsibility of a . . . lessor, ” as established by state or federal law at the time the contract is signed. N.J.S.A. § 56:12-15.[1]

         For the reasons explained in the opinion published on November 17, 2015, the Court granted class certification pursuant to Rule 23(b)(3), Fed. R. Civ. P., to a class defined as all individuals since September 24, 2007 and until October 21, 2014 who signed a storage lease agreement with Public Storage. Martinez-Santiago, 312 F.R.D. at 394. Subsequent discovery process revealed that, unlike the named Plaintiff, the vast majority of class members apparently cannot claim to have suffered any actual harm or damages from receiving the allegedly-TCCWNA-violative provisions of the lease agreements they signed. [Docket Item 206-1 at 7-8.] In fact, after extensive discovery, the parties have identified only 29 individuals (.02% of the current class) who may be able to claim they have suffered harm from the application of one or more of the subject clauses in their lease storage agreements. [Docket Item 279-1.]

         In due course, Defendant moved for summary judgment [Docket Item 182] and Plaintiff filed a cross-motion for partial summary judgment [Docket Item 187] centering on issues of whether the four relevant provisions in the lease agreements violated 56:12-15 and 56:12-16 of TCCWNA. Plaintiff also filed a motion to preclude the testimony of Ronald Schaible. [Docket Item 184.] Thereafter, Defendant moved to decertify the class in light of the U.S. Supreme Court's then-recent decision in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016). [Docket Item 206.] These four motions were fully briefed, and the Court heard oral argument. [Docket Item 249.]

         As noted, this Court then awaited the New Jersey Supreme Court's decision in the consolidated cases of Spade v. Select Comfort Corp., No. 16-1558 (3d Cir.), and Wenger v. Bob's Discount Furniture, LLC, No. 16-1572 (3d Cir.), upon the certified question: “Is a consumer who receives a contract that does not comply with the Furniture Delivery Regulations, but has not suffered any adverse consequences from the noncompliance, an ‘aggrieved consumer' under the TCCWNA?” [Docket Item 256 at 4.] As described in more detail below, the New Jersey Supreme Court answered that question in the negative. Spade, 181 A.3d at 978-981. With the Court's permission [Docket Item 262], the parties filed supplemental briefs addressing the impact of Spade on the pending motions [Docket Items 265, 266, 267 & 268], which the Court discusses in Section III.B, infra.

         On March 6, 2019, the Court notified the parties, pursuant to Rule 56(f)(2), Fed. R. Civ. P., that it was considering granting summary judgment on a ground not originally squarely raised by Defendant[2] - that 99.98% of class members who are not “aggrieved consumers” as defined in Spade cannot prevail on the merits of their TCCWNA claims - and permitted the parties to file supplemental briefs “specifically addressing which class members, if any, ‘suffered adverse consequences as a result of' the form leases they entered into with Defendant sufficient to withstand summary judgment.” [Docket Item 272 at 2] (quoting Spade, 232 N.J. at 524). Plaintiff filed a supplemental brief [Docket Items 273 & ...


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