The New Jersey Consumer Fraud Act is a very convoluted law that regulates virtually everything bought and sold in the state of New Jersey. It is also the genesis of hundreds of lawsuits. One CFA lawsuit we’ve been closely following is Josh Finkelman’s battle against the NFL over the price of Super Bowl tickets (the case even made our CFA Hall of Shame). Click here to see the latest update in the case from the Associated Press.
Though suing under the CFA was never intended to be an avenue of first resort when resolving business disputes, especially minor ones where there are alternatives to litigation, it is increasingly common. Why is this happening?
- Plaintiffs do not have to prove that defendants actually defrauded or deceived them to recover damages or attorney’s fees. In many cases a technical violation will suffice.
- Plaintiffs do not need to show out-of-pocket losses.
- Plaintiffs do not need to live in New Jersey to file a claim here.
The broad scope of the law and the ease with which suits can be filed has many unintended consequences:
- Discouraging job creation and entrepreneurship in New Jersey. The risk of CFA litigation is a deterrent to legitimate businesses coming to New Jersey. Making lawsuits the default form of problem solving in routine business disputes discourages job creation and leads to a diminished tax base, less vibrant communities, and higher prices for goods and services.
- Higher costs for consumers. The price of protecting against potential lawsuits and defending against existing ones is built into the prices paid by New Jersey’s consumers.
- Wasting public funds. As New Jersey streamlines its state budget and taxpayers are forced to do more with less, excessive litigation is costing our courts precious time and resources.