DeSimone v. Springpoint Senior Living, Inc.

In a unanimous decision in favor of civil justice reform, on January 10, 2024, the New Jersey Supreme limited the scope of remedies available to consumers pursuing claims under the New Jersey Consumer Fraud Act (“CFA”). In this matter, the plaintiff alleged that the defendants—a collection of continuing care retirement communities—defrauded him and his deceased mother by falsely advertising to potential residents and their families that they would receive a 90 percent refund of a deceased resident’s entrance fee. After the plaintiff’s mother died, he filed a class action complaint alleging, among other things, that the defendants’ advertisements constituted consumer fraud pursuant to the CFA. The plaintiff further alleged—and the trial court agreed—that, pursuant to Section 2.11 of the Truth in Menus Act (“TMA”), he, as well as all class members, were entitled to a complete refund of all fees paid to defendants. The TMA, which is codified within the CFA, permits restaurant patrons to recover a complete refund of the price they paid for meals where restaurants misrepresented the identity of food in menus.

In a significant win for civil justice reform, the Court rejected the plaintiffs’ broad interpretation of the TMA and limited the scope of its refund remedy to consumer fraud in restaurant menus. Importantly, the Court broadly adopted NJCJI’s view that references to the TMA by the Court in prior consumer fraud cases were “background discussion of the CFA,” that those statements were “dicta,” and “were not necessary to the holding.” Moreover, as part of the decision, the Court cited NJCJI’s argument that relevant legislative history, in particular Governor Byrne’s Conditional Veto Statement and subsequent Signing Statement, militated towards limiting the refund remedy to “food-related misrepresentations.” As such, the Court expressly held that the TMA’s refund remedy does not apply generally to all CFA claims and entered partial summary judgment in favor of the defendant dismissing with prejudice class claims seeking refund damages.

Had plaintiffs succeeded in this case, an extension of the TMA’s refund provision to all CFA claims would have permitted plaintiffs to obtain windfalls recoveries completely unmoored from their actual losses, as well treble damages based on those refunds. In turn, the threat of excessive damages would have given plaintiffs’ attorneys considerable leverage in class action settlements. As such, the Court’s decision to cabin the TMA’s refund remedy solely to incidents of consumer fraud in restaurant menus protects businesses and defendants from increasingly predatory tactics by the plaintiffs’ bar.

A copy of the Court’s opinion can be found here. Associate Justice Douglas M. Fasciale drafted the opinion, which was joined by Chief Justice Stuart J. Rabner, and Associate Justices Anne M. Patterson, Lee Solomon, Fabiana-Pierre Louis, Rachel Wainer Apter, and Michael Noriega. NJCJI’s in-house counsel, Alex Daniel, drafted NJCJI’s amicus curiae briefs and argued the matter before the Court. A copy of NJCJI’s amicus curiae brief can be found here, and a link to the September 26th oral argument can be found here.