Does a restaurant menu constitute a notice or sign pursuant to New Jersey’s Truth in Consumer Contract Warranty and Notice Act (“Act”)? If so, would the omission of prices from a menu violate the Act? In Watkins v. DineEquity Inc., 11-7182 (D.N.J. August 28, 2012), the District Court of New Jersey recently answered the former question in the positive, and the latter question in the negative.
In that case, a class action was brought against DineEquity Inc., Applebees Neighborhood Grill and Bar and International House of Pancakes, LLC (collectively “Defendants”). Defendants offered certain drinks on their menu without listing the prices. Candice Watkins (“Plaintiff”) alleged in her complaint that Defendants’ practice of omitting drink prices from their menu violated the Act. Id. at 2.
Plaintiff filed her complaint in the Superior Court of New Jersey, Law Division (“State Court”). Subsequently, Defendants removed the action from the State Court to the United States District Court for the District of New Jersey (“Federal Court”) based on diversity jurisdiction. Plaintiff argued that “offering such beverages for sale without indicating the prices violates New Jersey Law, in the [Act], and is contrary to clearly established New Jersey law requiring point-of-purchase notice of an item’s selling price.” Id. at 2. Defendants filed a Rule 12(b)(6) motion to dismiss the lawsuit for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); Id.
The Court explained that in order for the case to survive Defendants’ motion to dismiss, Plaintiff needed to establish on its face that Defendant violated the Act. Plaintiff was required to show that the following four (4) elements were met:
(1) the plaintiff was a consumer within the statute’s definition;
(2) the defendant was a seller, lessor, creditor, lender or bailee;
(3) the defendant (a) offered or entered into a written consumer contract or (b) gave or displayed any written consumer warranty, notice, or sign; and
(4) the offer or written contract, warranty, notice or sign included a provision that violated any clearly established legal right of a consumer or responsibility of a seller.
Id. at 6.
The Court addressed element one minimally. It merely stated that the Act defined “consumer” as “any individual who buys, leases, borrows, or bails any money, property or service which is primarily for personal, family or household purposes.” N.J. Stat. Ann. § 56:12-15. The Court presumed element one was satisfied and did not proceed further with its analysis. Id. at 6 n.3.
It is possible that it based its determination on the fact that Plaintiff was an individual who purchased drinks for personal consumption rather than resale.
The Court did not address element two. However, presumably Plaintiff was able to satisfy it because Defendants were considered “sellers” of food and drink items to the public.
The Court held that element three was satisfied. It explained that a menu “fits within the definition of a notice or sign, or both, as presented in the [Act’s] context of a consumer transaction because a restaurant menu is a written document that announces menu items and identifies the specific food and beverage products offered for sale by the restaurant.” Id. at 15.
Further, the Court considered Black’s Law Dictionary’s definition of “offer” which was, “The act or instance of presenting something for acceptance.” Black’s Law Dictionary 1189 (9th ed. 2009); Id. at 10. On this basis, it held that “a restaurant menu may be considered an offer, a notice, and a sign for [Act] purposes.” Id. at 15.
Element four was not satisfied. It held the Act applied solely to illegal terms and provisions that are included, in writing, in the statutorily significant documents (i.e. an offer, notice, or a sign). Omitted language was not sufficient to invoke the Act’s protections. Id. at 19. The Court reasoned that the phrase in element four, “which includes any provision”, refered to inclusions not omissions. Id. at 16.
The Court highlighted a very interesting distinction between something that is omitted and something that is included. It explained that when something is omitted, that can include a very large range of possible items. However, when something is included, the range of possible items is much more narrow. Therefore, since the statute was limited solely to items that were included on the menu, it would have been an unfair expansion of the intent of the statute to include items that were omitted, as well. The Legislature was “concerned with contracts, warranties, notices and signs that include illegal provisions intended to ‘deceive a consumer into thinking that they are enforceable . . . .’” (in other words, items that were included). Id. at 14.
Accordingly, the Court found that merely omitting drink prices from a restaurant menu without more did not state a claim under the Act. Id. at 23. The Court did not find that omissions posed the “same risk of misleading a consumer into failing to enforce her legal rights as an affirmative misrepresentation . . . .” Id. at 22. Thus, it granted Defendants’ Rule 12(b)(6) motion to dismiss the lawsuit. It held that Plaintiff , under these circumstances, failed to make a claim upon which relief could be granted. Fed. R. Civ. P. 12(b)(6). Id. at 23.
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