Over the last year we have seen an unprecedented number of Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA) lawsuits filed in New Jersey courts. This consumer protection law has been on the books for years, but has been the subject of few lawsuits until recently. So what is driving the sudden uptick in TCCWNA cases? And who is really benefiting from the surge in litigation? These are just a couple of the questions explored during the New Jersey Civil Justice Institute’s most recent policy teleforum.


Michael McDonald of Gibbons P.C. led off the discussion with an overview of a TCCWNA case he is trying in the U.S. District Court for the District of New Jersey, Korrow v. Aaron’s, Inc. The case is a textbook TCCWNA lawsuit, with some extra twists thrown in due to the nature of the contract at issue. A business is facing huge litigation costs and a stiff statutory penalty in a class action lawsuit being brought by plaintiffs who suffered no actual harm. If the plaintiffs win, each of them will get $100, but their attorneys will collect a large fee.


Gavin Rooney of Lowenstein Sandler, focused his remarks on the negative policy implications of TCCWNA lawsuits:


  • The court’s application of TCCWNA has reached a point that it is so broad compliance is virtually impossible.
  • As in Korrow v. Aaron’s, Inc., courts are allowing TCCWNA claims to be brought as class actions, even when the composition of the class is questionable. The $100 automatic damages provision in the statute, combined with the ease with which courts are certifying classes is incentivizing lawyers to bring an increasing number of these cases.
  • The government has ceded enforcement of TCCWNA to private attorneys, so they are technically “private Attorney General” cases. The courts look favorably on private Attorney General cases under the assumption that the government approves of the action being brought. However, it is not clear that the government would approve of many of the cases that are being brought because they are an extremely harsh reaction to what are often minor violations. If the government itself was doing the enforcement it would likely use its power of prosecutorial discretion to let some violators off the hook if they correct their mistakes.


Additional Resources:

NJCJI’s brief in Korrow v. Aaron’s, Inc., which was co-authored by Gavin J. Rooney and Joseph A. Fischetti of Lowenstein Sandler.

Korrow v. Aaron’s, Inc. – Michael McDonald’s pending TCCWNA case.

United Consumer Financial Services Company v. Carbo – This case sparked new interest in TCCWNA lawsuits.

N.J.S.A. 56:12-14 to -18:

This act shall be known and may be cited as the “Truth-in-Consumer Contract, Warranty and Notice Act.”


No seller, lessor, creditor, lender or bailee shall in the course of his business offer to any consumer or prospective consumer or enter into any written consumer contract or give or display any written consumer warranty, notice or sign after the effective date of this act which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed. Consumer means any individual who buys, leases, borrows, or bails any money, property or service which is primarily for personal, family or household purposes. The  provisions of this act shall not apply to residential leases or to the sale of  real estate, whether improved or not, or to the construction of new homes  subject to  “The New Home Warranty and Builders’ Registration Act,” P.L.1977,  c. 467 (C. 46:3B-1 et seq.).


No consumer contract, warranty, notice or sign, as provided for in this act, shall contain any provision by which the consumer waives his rights under this act.  Any such provision shall be null and void.  No consumer contract, notice  or sign shall state that any of its provisions is or may be void, unenforceable  or inapplicable in some jurisdictions without specifying which provisions are  or are not void, unenforceable or inapplicable within the State of New Jersey;   provided, however, that this shall not apply to warranties.


Any person who violates the provisions of this act shall be liable to the aggrieved consumer for a civil penalty of not less than $100.00 or for actual damages, or both at the election of the consumer, together with reasonable attorney’s fees and court costs. This may be recoverable by the consumer in a civil action in a court of competent jurisdiction or as part of a counterclaim by the consumer against the seller, lessor, creditor, lender or bailee or assignee of any of the aforesaid, who aggrieved him. A consumer also shall have the right to petition the court to terminate a contract which violates the provisions of section 2 of this act and the court in its discretion may void the contract.


The rights, remedies and prohibitions accorded by the provisions of this act are hereby declared to be in addition to and cumulative of any other right, remedy or prohibition accorded by common law, Federal law or statutes of this State, and nothing contained herein shall be construed to deny, abrogate or impair any such common law or statutory right, remedy or prohibition.