ROBERT CAMERON on behalf of himself and all other similarly situated, Plaintiff-Appellant,
SOUTH JERSEY PUBS, INC., d/b/a TGI FRIDAY'S, INC., Defendant-Respondent.
January 23, 2019
appeal from the Superior Court of New Jersey, Law Division,
Burlington County, Docket No. L-2106-14.
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).
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).
Judges Yannotti, Rothstadt and Natali.
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 (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. The
Dugan plaintiffs argued that TGI Friday's, Inc.
(TGIF), the restaurant chain, violated the Consumer Fraud Act
(CFA), N.J.S.A. 56:81-2.2 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
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 (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 (2007).
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.
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. 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.
plaintiff filed his complaint. 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. 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.
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. 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.
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. 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.
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."
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."
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 (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."
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 have to prove damages."
judge entered an order denying class certification on April
30, 2018. We granted plaintiff leave to appeal and later
issued a stay pending appeal.
appeal, plaintiff contends that the motion judge erred and
abused his discretion in not certifying the class based upon
the judge's consideration of whether plaintiff is
entitled to the relief demanded in his complaint, "the
ultimate merits of the case," and the judge's
perception that injunctive relief was not necessary because
defendant alleged it voluntarily agreed to disclose beverage
prices on its menus going forward. Moreover, plaintiff
asserts that the judge incorrectly believed that in order to
certify the class, plaintiff was bound to come forward with
evidence that all putative class members sustained an
ascertainable loss under the CFA. Finally, plaintiff argues
that the motion judge "conflate[ed] cohesion and
contends that the motion judge correctly denied class
certification. The thrust of defendant's response is that
proposed class members may have decided to purchase beverages
from defendant on any given date for reasons totally
unrelated to "the lack of menu pricing." According
to defendant, "even if one assumes that patrons viewed
the same menus, there is simply no way of knowing which
individuals ordered beverages without knowing the prices in
advance, and what information about prices they had even in
the absence of menu pricing." Although not argued before
the motion judge, it further argues to us that the individual
nature of "[e]ach proposed class member's dining
experience lacked the typicality and commonality necessary
for class certification under [Rule] 4:32-1(a) due
to the unlimited variations in customers' interactions
with servers regrading beverage purchases." Citing to
Dugan, defendant contends that the Court found that
"there were too many individual variants among how
individual patrons ordered beverages to find that 'common
questions of law or fact' were
'predominant.'" In addition, defendant avers
that in any event, plaintiff was not entitled to injunctive
relief once he abandoned his claim for monetary damages.
review a trial court's order granting or denying class
certification for an abuse of discretion. Dugan, 231
N.J. at 50. In determining whether the trial court has abused
its discretion, we "'must ascertain whether the
trial court has followed' the class action standard set
forth in Rule 4:32-1." Ibid. (quoting
Lee v. Carter-Reed Co., LLC, 203 N.J. 496, 506
(2010)). "Our role in this case is to review the trial
courts' class certification decisions, not to act as a
factfinder with respect to plaintiffs' substantive
claims." Id. at 55 n.8.
that standard, we conclude that the motion judge mistakenly
exercised his discretion by not correctly applying the
requirements for (b)(2) certification of a class. The judge
improperly held that an individual could not pursue
injunctive relief under the CFA and determined cohesiveness
by focusing upon the possible disparity between class
members' dining experiences rather than whether the
entire class could be afforded a remedy through a single
injunction that would insure defendant's continued
compliance with the law, if warranted. In our view, the facts
of this case give rise to exactly the type of claims that
(b)(2) class certification was intended to address.
begin our review by observing that certifying a "class
action is 'an exception to the usual rule that litigation
is conducted by and on behalf of the individual named parties
only.'" Iliadis, 191 N.J. at 103 (quoting
Califano v. Yamasaki, 422 U.S. 682, 700-01 (1979)).
"[T]he class action is a device that allows 'an
otherwise vulnerable class' or diverse individuals with
small claims access to the courthouse," Lee,
203 N.J. at 518 (quoting Iliadis, 191 N.J. at 120),
and thus, it "'should be liberally
construed.'" Dugan, 231 N.J. at 46-47
(quoting Lee, 203 N.J. at 518).
the context of consumer transactions, 'class actions
should be liberally allowed . . . under circumstances that
would make individual actions uneconomical to
pursue.'" Daniels v. Hollister Co., 440
N.J.Super. 359, 363 (App. Div. 2015) (quoting Varacallo
v. Massachusetts Mut. Life Ins. Co., 332 N.J.Super. 31,
45 (App. Div. 2000)). "In short, as the Court made clear
in Iliadis, 'a class action "should lie
unless it is clearly infeasible."'"
Ibid. (quoting Iliadis, 191 N.J. at 103).
courts have described "the class-action device's
'"historic mission"' [as] caring for
'"the smaller guy."'" Id. at
364 (quoting Iliadis, 191 N.J. at 104). A class
action serves "numerous practical purposes, including
judicial economy, cost-effectiveness, convenience, consistent
treatment of class members, protection of defendants from
inconsistent obligations, and allocation of litigation costs
among numerous, similarly-situated litigants."
Id. at 363 (quoting Iliadis, 191 N.J. at
it levels the "playing field" by
"'equaliz[ing] the claimants' ability to
zealously advocate their positions. That equalization
principle "remedies the incentive problem facing
litigants who seek only a small recovery." [T]he class
action's equalization function opens the courthouse doors
for those who cannot enter alone.'" Id. at
363-64 (second alteration in original) (quoting
Iliadis, 191 N.J. at 104). "The class-action
device was created not only to allow compensation for such
small wrongs but also to deter future wrongdoing in the
marketplace." Id. at 371-72.
4:32-2(a) requires that a "court shall, at any early
practicable time, determine by order whether to certify the
action as a class action." A plaintiff bears the burden
of establishing class status. Iliadis, 191 N.J. at
106. "[C]lass certification should not be denied based
on the merits of a complaint, [but] some preliminary analysis
is required. Carroll v. Cellco P'ship, 313
N.J.Super. 488, 495 (App. Div. 1998).
considering a motion by plaintiff for class certification, a
court is required" to examine "'the claims,
defenses, relevant facts, and applicable substantive
law.'" Dugan, 231 N.J. at 49-50 (quoting
Iliadis, 191 N.J. At 107). It "must 'accept
as true all of the allegations in the complaint,' and
consider the remaining pleadings, discovery . . ., and any
other pertinent evidence in a light favorable to [the]
plaintiff." Lee, 203 N.J. at 505 (first quoting
Int'l Union of Operating Eng'rs Local No. 68
Welfare Fund v. Merck & Co., 192 N.J. 372, 376
(2007); then citing Iliadis, 191 N.J. at 96).
court "must undertake a 'rigorous analysis' to
determine if the Rule's requirements have been
satisfied." Dugan, 231 N.J. at 49 (citing
Iliadis, 191 N.J. at 106-07). "Although class
certification does not occasion an examination of the
dispute's merits, a cursory review of the pleadings is
nonetheless insufficient." Iliadis, 191 N.J. at
107 (citations omitted). In other words, a court considering
a request for class certification must pierce the pleadings.
Ibid. Nevertheless, at this stage, a court must
"liberally indulge the allegations of the complaint
[and] 'liberally construe' Rule 4:32-1 in favor of
class certification" to achieve the goal that "a
class action 'should lie unless it is clearly
infeasible.'" Daniels, 440 N.J.Super. at
363-64 (second alteration in original) (quoting
Iliadis, 191 N.J. at 103).
certify a class action, the putative class plaintiff must
first establish the requirements in Rule 4:32-1(a).
This Rule states:
(1) the class is so numerous that joiner of all members is
impracticable, (2) there are questions of law or fact common
to the class, (3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class, and (4) the representative parties will fairly
and adequately protect the interests of the class.
requirements are commonly referred to as "numerosity,
commonality, typicality and adequacy of representation."
Dugan, 231 N.J. at 47 (quoting Lee, 203
N.J. at 519). Once the named plaintiff has established the
requirements in Rule 4:32-1(a)(1), he or she must
also satisfy either Rule 4:32-1(b)(1),
(2), or (3).
defendant here argues to us that plaintiff failed to satisfy
the requirements of Rule 4:32-1(a)(1),
plaintiff's alleged failure to do so was not argued
before the motion judge and for that reason, the judge never
addressed the contention. Because the issue was not addressed
in the motion, we have no reason to consider it now. See
Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234
(1973). Even if we did, we find no merit to defendant's
contention as plaintiff's purported class met all of the
requirements under Rule 4:32-1(a).
it is obvious that the putative class meets the
Rule's requirements. The members of the class
are far too numerous for individual joinder.
The common issue of law among all class members is that
[defendant] does not list its beverage prices in violation of
N.J.S.A. 56:8-2.5. The common issue of fact is that all
members of the class suffer from [defendant's alleged]
unlawful practice of not listing beverage prices. The loss
suffered by patrons resulting from [the alleged] violation of
the CFA is dispersed over the entire class of beverage
purchasers, with individual patrons incurring greater or
[Dugan, 231 N.J. at 82 (Albin, J. dissenting).]
class members' claims "'arise from the same
events, practice, or conduct, and are based on the same legal
theory, as those of other class members . . . . '"
Laufer, 385 N.J.Super. at 180-81 (citation omitted).
The unlawful conduct alleged here is a violation of the CFA
and the TCCWNA arising from the failure to list beverage
prices on menus given to plaintiff and the putative class
members. Finally, plaintiff can adequately represent the
class even if his "interests" are not
"identical" to all class members, as he does
"'not have interests antagonistic to those of the
class.'" Id. at 182 (quoting Delgozzo
v. Kenny, 266 N.J.Super. 169, 188 (App. Div.
dispute here focused on only whether plaintiff, seeking only
injunctive relief, was entitled to (b)(2) class
certification, which is different than the (b)(3)
certification considered by the Court in Dugan,
where the claim was for damages and civil penalties.
"Though classes certified under . . . (b)(3) and . . .
(b)(2) all proceed as 'class actions,' the two
subsections actually create two remarkably different
litigation devices." Shelton v. Bledsoe, 775
F.3d 554, 560 (3d Cir. 2015).
[i]f th[e] initial requirements [of Rule 4:32-1(a)]
are satisfied, the court then considers whether "the
questions of law or fact common to the members of the class
predominate over any questions affecting only individual
members, and that a class action is superior to other
available methods for the fair and efficient adjudication of
[Pisack v. B & C Towing, Inc., 455 N.J.Super.
225, 250 (App. Div.), leave to app'l granted, 235 N.J.
477 (2018) and 236 N.J. 24 (2018) (quoting R.
exists if 'the proposed class is "sufficiently
cohesive to warrant adjudication by
representation."'" Ibid. (quoting
Dugan, 231 N.J. at 48). "To establish
predominance, . . . a 'plaintiff does not have to show
that there is an "absence of individual issues or that
the common issues dispose of the entire dispute," or
"that all issues [are] identical among class members or
that each class member [is] affected in precisely the same
manner."'" Ibid. (alterations in
original) (quoting Lee, 203 N.J. at 520).
of predominance under (b)(3) is not a requirement for (b)(2)
certification. Gates v. Rohm & Haas Co., 655
F.3d 255, 263-64 (3d Cir. 2011). Under (b)(2), class
certification is warranted if "the party opposing the
class has acted or refused to act on grounds generally
applicable to the class, thereby making appropriate final
injunctive relief or corresponding declaratory relief with
respect to the class as a whole." R.
4:32-1(b)(2). Certification under (b)(2) is appropriate where
one injunction can remedy the harmful conduct. See
MacNeil v. Klein, 141 N.J.Super. 395, 412-13 (App. Div.
1976) (observing that (b)(2) class certification would be
inappropriate to remedy adverse but disparate jail conditions
in different counties). Whether (b)(2) certification is
appropriate therefore "turns on the precise nature of
the remedy sought." Goasdone v. Am. Cyanamid
Corp., 354 N.J.Super. 519, 532 (Law Div. 2002). See
also Shelton, 775 F.3d at 561.
(b)(2) applies "when a single injunction or declaratory
judgment would provide relief to each member of the class. It
does not authorize class certification when each individual
class member would be entitled to a different
injunction or declaratory judgment against the
defendant." Wal-Mart Stores, Inc. v. Dukes, 564
U.S. 338, 360 (2011).
key to the (b)(2) class is the 'indivisible nature of the
injunctive or declaratory remedy warranted-the notion that
the conduct is such that it can be enjoined or declared
unlawful only as to all of the class members or as to none of
them.'" Shelton, 775 F.3d at 561 (quoting
Wal-Mart, 564 U.S. at 360). The issue at the point
of deciding class certification is not whether plaintiff has
proven his or the class members' entitlement to
injunctive relief, see Sheppard v. Twp. of
Frankford, 261 N.J.Super. 5, 10 (App. Div. 1992)
(stating that nonexclusive factors, if established, would
warrant a permanent injunction), but rather whether the
relief, if warranted, would provide a remedy for the entire
mere fact that a defendant has allegedly voluntarily desisted
from the challenged conduct is not a reason for denying an
injunction or therefore (b)(2) certification. A "tardy
attempt of defendant to lend an appearance of observance of
plaintiff's rights will avail it nothing. An injunction
may issue 'to prevent an anticipated or threatened
injury, either to protect against a repetition of unlawful
conduct or to guard against reasonably apprehended misconduct
or infringement of legal right.'" Sheahan v.
Upper Greenwood Lake Prop. Owners Ass'n., 36
N.J.Super. 133, 136 (App. Div. 1955) (quoting
Hoffmann-LaRoche, Inc., v. Weissbard, 11 N.J. 541,
who invokes (b)(2) for class certification must be seeking
declaratory or injunctive relief and the defendant must have
acted or refused to act on grounds generally applicable to
the class. This latter requirement is generally referred to
as the need for cohesiveness. Amchem. Prods., Inc. v.
Windsor, 521 U.S. 591, 623 (1997). "Because there
is no right to opt out from such a class, and because
significant individual issues in a[ ](b)(2) class might
present manageability issues and undermine the value of
utilizing the class action mechanism, . . . such classes must
be cohesive." Shelton, 775 F.3d at 561.
the context of a (b)(2) application, cohesiveness is
considered 'a natural consequence' of the second
requirement." Goasdone, 354 N.J.Super. at 531
(citing Santiago v. City of Philadelphia, 72 F.R.D.
619, 627 (E.D. Pa. 1976)). "Cohesiveness requires a
certain 'homogeneity' of the claims of the class
members. . . . [which] has been described as the
'essence' of a (b)(2) class action."
Id. at 533 (citations omitted). In other words,
there must be a "strong commonality of interests."
Gates, 655 F.3d at 264.
"a class action may be maintained under . . . (b)(2)
even though defendant's conduct is not damaging to every
member of the class. What is important is that the relief
sought by the named plaintiffs should benefit the entire
class." Laufer, 385 N.J.Super. at 183
(citations and internal quotation marks omitted).
"Injuries remedied through (b)(2) actions are really
grouped, as opposed to individual injuries."
Shelton, 775 F.3d at 561 (quoting Barnes v.
Am. Tobacco Co., 161 F.3d 127, 143 n.18 (3d Cir.
[i]n order to determine if the class meets the requirement of
cohesiveness under (b)(2), the court must analyze the legal
and factual issues involved in the specific case, and
determine if the claims of class members can more sensibly be
adjudicated as a group or if the case would essentially break
down into litigation of individual claims due to the presence
of significant individual issues.
[Goasdone, 354 N.J.Super. at 536.]
example, in Laufer, the plaintiff filed a class
action against an insurance company for violations of the
CFA. 385 N.J.Super. at 176. The plaintiff alleged the
insurance company violated the CFA by sending notices to its
insureds stating they had nursing home coverage, when in
fact, they did not. Id. at 176-78. Plaintiff sought
monetary damages on behalf of herself, and injunctive and
declaratory relief on behalf of a class of individuals who
were also sent the notices. Id. at 178. The
plaintiff sought "an injunction compelling defendants to
send written notice to all class members, notifying them in
plain and prominent language that they do not, and
have not had, nursing home coverage, and notifying them that
the [c]ourt has declared" the representations violated
the CFA. Ibid.
affirmed the Law Division's decision to certify the class
under (b)(2). Id. at 184. In doing so, we observed
that the notices "were sent to all policyholders"
and "the limited injunctive relief sought . . . would
clearly 'benefit the entire class.'"
Id. at 183-84 (quoting Baby Neal v. Casey,
43 F.3d 48, 59 (3d Cir. 1994)). Therefore, we implicitly
found that plaintiff's claims were cohesive because
everyone was at least sent the notice. See id. at
certain individuals may not have opened or relied upon the
notice, the "limited injunctive relief sought,"
namely a notice indicating that the insured did not have
nursing home benefits, would affect the class in the same
way. In deciding Laufer, we held that injunctive
relief for the class was proper even though there was no
realistic possibility that the named ...