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Only New Jersey Transactions are Covered Under the New Consumer Fraud Act

(New section) The provisions of P.L.1960, c.39 (C.56:8-1 et seq.) shall: a. apply only to transactions that take place in the State.

The changes to the Consumer Fraud Act limits the coverage to New Jersey transactions. Why? What's the point? This is particularly troublesome for internet transactions.

Hypothetical 1:

New Jersey resident, Caldwell, finds a whirlpool on e-bay and calls the merchant directly to purchase the product. The money is sent by check to New York, where the business is based. What happens when the product is never delivered?

The New Jersey resident is out of luck since this transaction occurred in New York and the NEW Consumer Fraud Act would not apply.

Hypothetical 2:

You call a company in New York and give them your credit card number and never deliver the product, or they deliver the wrong product. This again is a New York transaction and the New Consumer Fraud Act does not apply.

Apparently this section is meant to stop litigation tourism, a made-up term. Litigation tourism is non-New Jersey residents purchasing products in their own state and coming to New Jersey to sue the manufacturer, i.e., big pharmaceutical companies. The drafters of this bill want to do this to protect these New Jersey businesses from the application of New Jersey laws.

Isn't one of the most basic premises under the Constitution that all laws apply equally to everyone? The drafters of this bill have forgotten that the "choice of laws" is determined in each and every case. Just because a New Jersey company gets sued by an out-of-state plaintiff does not automatically mean that New Jersey law applies. The court determines what law applies, which might be the law of the plaintiff's state.

This situation is already covered and to pass the NEW provisions of the Consumer Fraud Act only damage New Jersey Consumers BECAUSE the Consumer Fraud will not protect New Jersey residents when they are taken advantage of by out-of-state businesses.

This entire legislation is ANTI-CONSUMER. It makes it easier to implement and profit from deceptive business practices. The courts have been doing a fine job interpreting and defining the Act. It is remedial legislation meant to help consumers and attract competent counsel to represent consumers.

The Law Office of Jonathan Rudnick LLC