New Jersey’s Legislative Efforts Move Towards Adjusting the State’s Consumer Fraud Act
In response to the escalating outcry from New Jersey business owners plagued by the rampant filing of Consumer Fraud cases within recent years, New Jersey’s legislature has taken its first step to begin the process of moderating the State’s often abused Consumer Fraud law.
Assemblyman, Craig J. Coughlin, from the 19th District, located in Middlesex county, has authored Assembly Bill No. 3264 which aims to curtail the overreaching language employed in the laws’ initial incarnation nearly fifty (50) years ago.
The bill, which is gaining support with constituents and in the halls of Trenton, where the seat of New Jersey’s government sits, seeks to amend Statute 56:8-1 et sequential.
First, the proposed changes seek to modify Section seven (7) of Chapter 19 to change the law’s entitlement characteristics from “person” to “consumer”. This modification seeks to rectify the confusion which has become more prevalent over the years as small business owners attempt to exercise their legal rights, as consumers, against unscrupulous commercial entities with which they have transacted business and have been wronged.
Previously, concern and divergent judicial rulings have flowed from interpretation of the Act as presently written and whether or not businesses were considered a person within the meaning of the law and as such, could such entities avail themselves of the law’s protective intent.
Second, and the most notable amendment proposed by Assemblyman Coughlin, himself a licensed New Jersey attorney since 1984, is the sought after change to the Court’s non-discretionary authority in applying the CFA, which has long been regarded as one the harshest Consumer Fraud statutes in the country.
Currently, the Court is required to award three times the compensatory damages along with Plaintiff’s attorneys fees if a violation of the CFA is found to have occurred.
The changes, necessary to protect the rights of businesses and close the exposed loop-hole now being exploited by litigious plaintiffs, will serve to allow the Court much needed discretion in awarding punitive damages under the Consumer Fraud Act, which by proposed amendment, would not exceed threefold of the actual damages proven.
Additionally, the new law would not apply to lawsuits or transactions governed by other regulatory bodies or officers acting under New Jersey’s statutory authority or the statutory authority of the Federal government.
If passed, the Act would take effect immediately and impact any and all actions filed on or after the effective date lobbied for by Assemblyman Coughlin who, along with his constituency and many others throughout the State, seek these overdue changes to New Jersey’s Consumer Fraud Law.