S2561

An Act concerning causes of action for violation of the consumer fraud act and amending P.L.1971, c.247.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 7 of P.L.1971, c.247 (C.56:8-19) is amended to read as follows:

7. a. Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under [this act or the act hereby amended and supplemented] P.L.1960, c.39 (C.56:8-1 et seq.) may bring an action or assert a counterclaim therefor in any court of competent jurisdiction.

b. In any action brought pursuant to subsection a. of P.L.1960, c.39 (C.56:8-1 et seq.), a person seeking to recover damages shall establish that:

(1) the person acted as a reasonable consumer would under the circumstances;

(2) the method, act, or practice alleged unlawful under P.L.1960, c.39 (C.56:8-1 et seq.) would cause a reasonable person to act in a manner substantially similar to those which resulted in damages; and

(3) the person suffered actual damages supported by sufficiently definitive and objective evidence to allow the loss to be calculated with a reasonable degree of certainty.

A court may dismiss a claim as a matter of law if the claim fails to demonstrate a likelihood that the method, act, or practice alleged unlawful under P.L.1960, c.39 (C.56:8-1 et seq.) would mislead a reasonable consumer.

c. In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest. In all actions under this section, including those brought by the Attorney General, the court shall also award reasonable attorneys' fees, filing fees, and reasonable costs of suit.

d. Notwithstanding the provisions of subsection c. of this section or any other law to the contrary, if attorneys’ fees are awarded, those fees shall bear a reasonable relationship to the monetary amount of the judgment. When the judgment grants equitable relief, attorneys’ fees shall be based on the amount of time reasonably expended.

(cf: P.L.1997, c.359, s.1)

2. This act shall take effect immediately and shall apply retroactively to all actions and proceedings that have accrued, are pending, or are filed on or before the date of enactment.

STATEMENT

This bill establishes certain requirements for asserting a personal cause of action under the consumer fraud act (CFA) and limits the awarding of attorneys’ fees.

Under the bill, a person seeking to recover damages for a violation of the CFA is required to establish that:

(1) the person acted as a reasonable consumer would under the circumstances;

(2) the method, act, or practice alleged to be unlawful would cause a reasonable person to act in a manner substantially similar to those which resulted in damages; and

(3) the person suffered actual damages supported by sufficiently definitive and objective evidence to allow the loss to be calculated with a reasonable degree of certainty.

In addition, the bill provides that a court may dismiss a claim as a matter of law if the claim fails to demonstrate a likelihood that the method, act, or practice alleged to be unlawful under the CFA would mislead a reasonable consumer.

Under the bill, any attorneys’ fees awarded for a violation of the CFA are required to bear a reasonable relationship to the monetary amount of the judgment. The bill provides that when the judgment grants equitable relief, as opposed to monetary damages, attorneys’ fees are to be based on the time reasonably expended.

The sponsor intends this bill to provide greater protections for businesses and prevent the filing of lawsuits when a consumer has not suffered actual harm. In addition, the sponsor believes that this bill will reduce litigation arising from alleged technical violations of the CFA where a business has not committed fraud.