Fighting Back—TLD Law Gets Major Win for Client in Consumer Protection Case By Michael Hellbusch, Esq.

TLD Law achieved an substantial victory for its client, Rip Curl, Inc., when the Central District of California dismissed a putative class action complaint alleging the surf company intentionally deceived online consumers by posting false or misleading terms and conditions. Plaintiff Lucia Candelario, who filed nearly identical claims against other online retailers in other jurisdictions, alleged Rip Curl violated a little-known New Jersey consumer protection statute called the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA).  She sought over $5 million in damages on behalf of the proposed class.  TLD Law filed a motion to dismiss for lack of standing on behalf of its client, Rip Curl.  In his order on September 7, 2016, Central District Judge Cormac Carney agreed with Rip Curl’s counsel that plaintiff failed to plead any injury-in-fact necessary to satisfy Article III of the U.S. Constitution’s standing requirement and dismissed the case.  The decision will no doubt be cited to favorably by the dozens of other defendants facing allegations based on TCCWNA in cases filed within the past few months.

As this author posted previously, TCCWNA was meant to discourage deceptive advertising or contract terms by prohibiting sellers from offering or displaying language to a consumer or prospective consumer that includes provisions that “violate any clearly established legal right of a consumer or responsibility of a seller” established by New Jersey or Federal Law. The statute acts as a deterrent by providing statutory penalties for “aggrieved consumers.” Rights under TCCWNA are cumulative of other rights and remedies and are non-waivable.

In her First Amended Complaint, Plaintiff alleged she visited Rip Curl’s website and purchased a tank top from the online store. Plaintiff claimed she was not satisfied with the cut or quality after receiving the tank top and visited the website again to review the terms and conditions posted on the website.  Defendant’s terms and conditions contained clause limiting Rip Curl’s liability to the maximum extent permitted by law for any action related to the use of the website.  Based on this clause, Plaintiff alleged Defendant violated TCCWNA because it purported to deprive Plaintiff of her rights under state and federal law, including plaintiff’s right to a cause of action based on Rip Curl’s failure to protect plaintiff from an unreasonable risk of harm and its failure to protect plaintiff’s personal information from criminal hackers.

In the motion to dismiss, TLD Law argued Plaintiff failed to allege any facts demonstrating she suffered an injury-in-fact required for Article III standing. It also argued Plaintiff did not show any connection between the posting of the terms and conditions and the risk of the harm she alleged could befall her. The Court agreed, noting that “[c]onspicuously absent” from Plaintiff’s pleading were any allegations that the clothing Plaintiff purchased was dangerous, or that Plaintiff was in any way harmed in connection with the clothing or use of the website.  The court held: “Therefore, there is no indication that Plaintiff had a claim against Defendants which the Terms and Conditions prevented her from bringing.”

The Court’s decision appears to be the first ruling on a motion to dismiss TCCWNA claims brought by online retailers for the wording of their website terms and conditions. Several more decisions are pending in various districts, including Silkowski v. Apple, Inc. in the Northern District of California (Case No. 5:16-cv-02338); Braden v. TTI Floor North America (Hoover) in the District of New Jersey (Case No. 3:16-cv-00743); and Candelario v. Vita-Mix Corporation also in the District of New Jersey (Case No. 3:16-cv-2260).  Hopefully, those courts will follow the Central District in dismissing meritless claims that do not result in harm to a plaintiff.

Rip Curl, Inc. was represented in the aforementioned action by TLD Law attorneys Michael Hellbusch, Shannon Jenkins, and J.J. Coleman.

Michael Hellbusch advises and counsels clients in the areas of business law, cyber security, privacy law, and intellectual property. His goal is to provide clients with advantageous solutions to complex legal issues and to provide a focused approach to business management.

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