I Paid How Much For That Drink?? – Court Finds Price Omission From Menu Not Actionable Under TCCNWA

A District Court of New Jersey Judge recently granted a Fed. R. Civ. P. 12(b)(6) motion to dismiss a putative class action brought against Applebee’s and IHOP, in which the plaintiff claimed that the defendants violated the NJ Truth in Consumer Contract Notice and Warranty Act (TCCNWA) by failing to disclose beverage prices on their menus.

In Watkins v. Dineequity, Inc., et al. (11-cv-7182), the plaintiff based the complaint solely on the alleged TCCNWA violation.  TCCNWA (N.J.S.A. 56:12-14, et seq.) is a dangerous statute for sellers in NJ because it subjects them to statutory damages for entering into contracts with, or providing notices to, consumers that include any provisions violating a federal or state law, without regard to whether the seller’s conduct was negligent or willful.  Here, the plaintiff sought damages under TCCNWA arising from an underlying violation of the New Jersey Consumer Fraud Act (CFA).  Specifically, the plaintiff alleged that the defendants failed to comply with N.J.S.A. 56:8-2.5 (part of the CFA) because they did not plainly mark the price of merchandise.  The plaintiff claimed that restaurant menus are subject to TCCNWA because a menu functions as a contract, warranty, notice or sign.

The defendants challenged the assertion that a menu constitutes a contract, warranty, notice or sign under TCCNWA.  The defendants further argued that TCCNWA covers only inclusions of provisions that violate legal rights, and not omissions.

District Court Judge Simandle found that a menu constitutes an offer and may be considered a contract, notice or sign under TCCNWA.  (Judge Simandle did not rule as to whether it could constitute a warranty since the claim did not involve a warranty.)  However, after evaluating the plain language of TCCNWA and relevant case law, Judge Simandle dismissed the complaint, ruling that TCCNWA prohibits only the inclusion of illegal provisions and does not address omissions.  Judge Simandle dismissed the complaint without prejudice, noting that the plaintiff could seek to file an amended pleading. 

Under the facts presented, it appears that a plaintiff may be able to plead a claim for relief under the CFA itself; however, plaintiffs would still have to overcome other obstacles to maintain a CFA claim such as whether an ascertainable loss could be demonstrated.

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