LUCA v. WYNDHAM WORLDWIDE CORPORATION et al
Filing
147
OPINION. Signed by Chief Judge Mark R. Hornak on 1/16/19. (bdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
THOMAS LUCA, JR.,
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Plaintiff,
V.
WYNDHAM WORLDWIDE
CORPORATION ET AL,
Defendants.
2: 16-cv-00746
OPINION
Mark R. Hornak, Chief United States District Judge.
Pending before the Court is a Motion for Judgment on the Pleadings, or in the alternative,
Motion for Reconsideration filed by Defendants Wyndham Hotel Group, LLC, and Wyndham
Hotels and Resorts, LLC (collectively, "Wyndham"). (Mot., ECF No. 87.) The matter has been
fully briefed, and the Court held a telephonic oral argument. (ECF Nos. 88, 93, 94, 114, 131,
132, 144.) For the reasons that follow, Wyndham's Motion is granted.
I.
Background
Plaintiff Thomas Luca ("Plaintiff') filed his Class Action Complaint on June 6, 2016.
(ECF No. 1.) Plaintiff, on behalf of himself and a purported class, avers that a hotel reservation
website for which Wyndham is responsible did not adequately disclose the total costs associated
with booking a hotel room, thereby violating the New Jersey Consumer Fraud Act ("CF A"),
N.J.S.A. § 56:8-1, et seq. 1 (Op., ECF No. 43, at 1.) Plaintiff also avers that the website's Terms
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Specifically, the Complaint alleges that the price displayed on the website in bold, large-font
and purported to be the "nightly rate" does not incorporate a daily mandatory "resort fee."
According to Plaintiff, because Wyndham fails to explain that the resort fee constitutes part of
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of Use violate the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act
("TCCWNA"), N.J.S.A. § 56:12-14, et seq. (Id.) He avers that consumers who use the booking
website are automatically deemed to agree to the Terms of Use, which contain limitations on
Wyndham's liability. (Id. at 8.) 2 Plaintiff alleges that the effect of the Terms of Use is that it
deceives consumers into thinking that the provisions are enforceable and deters them from
enforcing rights that are otherwise provided under the law. (Compl. , 9-11.) Plaintiff, however,
does not allege that the Terms of Use caused him any actual harm in his hotel booking process,
his hotel stay, or the events leading up to the filing of his Complaint. Plaintiff has not amended
his Complaint since the initiation of this suit to add any allegations of specific harm stemming
from the Terms of Use.
Wyndham responded to the Complaint with a motion to dismiss on August 15, 2016
(ECF No. 19), in which it argued that Plaintiffs second claim, the TCCWNA claim, fails
because Plaintiff suffered no injury from the Terms of Use and thus lacked constitutional and
statutory standing to sue. The Court denied the motion to dismiss in an Opinion dated February
15, 2017, and an amended Order dated April 19, 2017. (ECF Nos. 43, 61.) The Court concluded
that Plaintiff had shown constitutional standing based on the existence of "a tangible injury, or
the true cost of renting a hotel room, in a practice known as "drip pricing," the advertised price
misleads consumers to believe that the additional resort fee is simple a "tax," which is a
deceptive act that impacts consumers' decision-making. (Compl., 1-8.)
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Specifically, Plaintiff alleges that specific provisions in the Terms of Use are in direct
contravention of rights afforded to Plaintiff under New Jersey law. According to Plaintiffs
Complaint, those provisions:
1) disclaim liability for claims brought for Defendants' negligent, willful, malicious and
wanton misconduct;
2) bar claims for personal and economic injury and punitive damages; and
3) ban consumers from asserting claims against Defendants for deceptive and fraudulent
conduct.
(Compl., 10.)
2
...
risk of injury - to Plaintiffs asserted right to redress under the CFA." (Op. at 9 (emphasis
added).) The Court also rejected Wyndham's argument that Plaintiff was not an "aggrieved
consumer" statutorily empowered to bring suit. (Id at 10.) Absent direct guidance from the New
Jersey Supreme Court on the definition of "aggrieved consumer," the Court, noting that the
TCCWNA is a remedial statute entitled to a broad interpretation, concluded that Plaintiff had
adequately pled that he was in fact "aggrieved" for the same reasons that he had constitutional
standing. (Id) The denial of Wyndham's motion to dismiss was without prejudice to Wyndham
reasserting its standing arguments at a later stage in the case. (Op., ECF No. 43, at 1-2.)
Wyndham eventually answered the Class Action Complaint. (ECF No. 53.)
That later stage is now, and that direct guidance from the New Jersey Supreme Court has
arrived. On April 16, 2018, the New Jersey Supreme Court answered a certified question from
our Court of Appeals on what it means to be an "aggrieved consumer" under the TCCWNA.
Spade v. Select Comfort Corp., 181 A.3d 969 (N.J. 2018). Wyndham filed the pending Motion,
ECF No. 87, seeking dismissal of the TCCWNA claim for lack of statutory standing on the basis
that Plaintiff is not an "aggrieved consumer." 3
Because Wyndham has already filed its Answer to Plaintiffs Complaint (ECF No. 53),
and because the Court's denial of the motion to dismiss was without prejudice to Wyndham reasserting its arguments at a later stage (Op. at 10), the Court will construe the pending Motion as
one for judgment on the pleadings and not one for reconsideration.
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For the reasons stated herein, to the extent the determinations set forth in this Opinion are at
variance with those in the Court's prior Opinion and Order, ECF Nos. 43 and 61, this Opinion
and its accompanying Order supersede the prior Opinion and Order.
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II.
Standard of Law
Under Federal Rule of Civil Procedure 12(c), a party may move for judgment on the
pleadings after the pleadings are closed but within such time as to not delay the trial. Fed. R. Civ.
P. 12(c). Judgment on the pleadings under Rule 12(c) may be granted "only if, viewing all the
facts in the light most favorable to the nonmoving party, no material issue of fact remains and the
moving party is entitled to judgment as a matter of law." Knepper v. Rite Aid Corp., 675 F.3d
249,257 (3d Cir. 2012) (citing Rosenau v. Unifund Corp., 539 F.3d 218,221 (3d Cir. 2008)). "A
motion for judgment on the pleadings based on the defense that the plaintiff has failed to state a
claim is analyzed under the same standards that apply to a Rule 12(b)(6) motion." Revell v. Port
Auth. of NY & NJ, 598 F.3d 128, 134 (3d Cir. 2010) (citing Turbe v. Gov't of the Virgin
Islands, 938 F.2d 427, 428 (3d Cir. 1991)). The only notable difference is that a court, for a
motion on the pleadings, may review not only the complaint but also the answer and written
instruments attached to the pleadings. Brautigam v. Fraley, 684 F. Supp. 2d 589, 591-92 (M.D.
Pa. 2010).
III.
Discussion
A plaintiff pursuing a claim for a violation of the TCCWNA must establish four
elements:
[F]irst that the defendant was a 'seller, lessor, creditor, lender or bailee or
assignee of any of the aforesaid'; second, that the defendant offered or entered
into a 'written consumer contract or [gave] or display[ ed] any written consumer
warranty, notice or sign'; third, that at the time that the written consumer contract
is signed or the written consumer warranty, notice or sign is displayed, that
writing contains a provision that 'violates any clearly established legal right of a
consumer or responsibility of a seller, lessor, creditor, lender or bailee' as
established by State or Federal law; and finally, that the plaintiff is an 'aggrieved
consumer.'
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Patterson v. Forever 21, Inc., No. 16-cv-05087, 2018 U.S. Dist. LEXIS 185086, at *9 (D.N.J.
Oct. 26, 2018) (quoting Spade, 181 A.3d at 976).
Wyndham argues that Plaintiffs TCCWNA claim fails as to two of the elements
identified above. First, it argues that the definition of "aggrieved consumer," as clarified by
Spade, excludes the type of claim asserted by Plaintiff. Second, and in the alternative, it argues
that the challenged provisions within the Terms of Use do not actually violate clearly established
New Jersey law and, therefore, cannot support a TCCWNA claim. The Court need not address
Wyndham's second argument, as its review of the "aggrieved consumer" issue resolves the
pending Motion.
The parties have competing interpretations of the New Jersey Supreme Court's ruling in
Spade and its application to this case. Therefore, the Court begins its discussion by considering
Spade, along with the few recent cases relying on Spade, before applying it to the facts pled in
this case.
A. Spade and its progeny
In Spade, the New Jersey Supreme Court articulated that the term "aggrieved consumer"
as that term is used in the TCCWNA "denotes a consumer who has suffered some form of harm
as a result of the defendant's conduct." 181 A.3d at 980. That harm may extend beyond
monetary damages, but the consumer must have evidence that she suffered "adverse
consequences as a result of the defendant's regulatory violation" in order to qualify for relief as
an "aggrieved consumer." Id. at 981. The Spade court gave the following example and guidance:
If, for example, a furniture seller fails to timely deliver a consumer's
furniture, and the consumer would have sought a refund had he or she not been
deterred by the "no refunds" language prohibited by N.J.A.C. 13:45A-5.3, that
consumer may be an "aggrieved consumer" entitled to a civil penalty under
N.J.S.A. 56:12-17. If an untimely delivery and misleading "no refunds" language
leave a consumer without furniture needed for a family gathering, the consumer
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may be an "aggrieved consumer" for purposes of N.J.S.A. 56:12-17. Proof of
harm resulting from contract language prohibited by N.J.S.A. 56:12-15 may
warrant a civil penalty under N.J.S.A. 56:12-17, even if the harm is not
compensable by damages.
In the absence of evidence that the consumer suffered adverse consequences
as a result of the defendant's regulatory violation, a consumer is not an "aggrieved
consumer" for purposes of the TCCWNA. In the setting of these appeals, if a
consumer has entered into a sales contract containing a provision that violated
N.J.A.C. 13:45A-5.3, but his or her furniture was delivered conforming and on
schedule, and he or she has incurred no monetary damages or adverse
consequences, that consumer has suffered no harm. Such a consumer is not an
"aggrieved consumer" under N.J.S.A. 56: 12-17.
Id.
Courts have since applied the Spade decision to TCCWNA cases. The United States
District Court of New Jersey applied Spade in Patterson v. Forever 21, Inc. to conclude that the
plaintiff was not an "aggrieved consumer" under the TCCWNA. 2018 U.S. Dist. LEXIS 185086,
at * 16. In that case, the plaintiff alleged that she purchased several items from the defendant
retailer's website and the defendant had terms and conditions with unlawful indemnification and
disclaimer provisions. Id. at *2-4. The court dismissed the complaint, concluding plaintiffs
failure to allege any harm suffered by virtue of the referenced terms and conditions was lethal to
her TCCWNA claim.
Plaintiff has not alleged that she was prevented from returning the items or
otherwise pursuing any remedies relating to the purchased items or that
[d]efendant attempted to enforce the T &C Provisions to Plaintiffs detriment.
Plaintiffs allegations mirror the hypothetical consumer, in Spade, who entered
into a sales contract, that contained a provision allegedly violating a New Jersey
statute, but received timely delivery of conforming goods.
Id.at*15-16.
That District Court also recently decided Truglio v. Planet Fitness, Inc., No. 15-cv-7959,
2018 U.S. Dist. LEXIS 214694 (D.N.J. Dec. 21, 2018). There, the plaintiff executed a health
club membership agreement with the defendant but contended that the agreement's terms
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imposed misleading cancellation requirements, specifically a complicated written notice
provision. Id. at *2. However, the amended complaint did not allege that the plaintiff ever
cancelled or attempted to cancel her membership. Id. at *3. Applying Spade, the court dismissed
the TCCWNA claim because the plaintiff, whose only alleged harm was entering into a gym
membership contract containing an allegedly unlawful cancellation provision, was not an
"aggrieved consumer" capable of obtaining relief under the TCCWNA. Id. at * 12. Elaborating
on the non-compensable harm described in Spade, the District Court explained:
The compensable non-monetary claims Spade [} envisions involve situations in
which an unlawful contractual term caused the plaintiff some concrete harm, such
as being deterred from obtaining a refund or not receiving the contracted-for
goods. Here, the Amended Complaint merely alleges that Plaintiff entered into the
gym membership contract containing an allegedly misleading cancelation [sic]
provision, but contains no allegations of concrete harm, such as that Plaintiff
wished or attempted to cancel her membership agreement but was prevented from
doing so, or that the cancellation provision somehow impacted her ability to use
the gym membership.
Id. at *20.
New Jersey state courts have also applied Spade. In Wright v. Bank of America, NA., the
plaintiff alleged that the absence of required language on notices of intention to foreclose gave
rise to violations of the TCCWNA. 194 A.3d 101, 102 (Super. Ct. App. Div. 2018). The Superior
Court noted that no foreclosure action was ever commenced after the plaintiff was served with
the deficient pre-suit notices. Id. at 103. The court concluded there was no discernable damage
alleged in the complaint, so it remanded the case to allow the plaintiff to amend and identify the
alleged harm that he suffered as a result of the pre-suit notices. Id. at 104.
B. Application of Spade to this case
Plaintiff alleges that Wyndham's Terms of Use unlawfully disclaim certain liability and
damages connected with the online booking process, and because Plaintiff is suing Wyndham for
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liability and damages for Wyndham's "drip pricing" practice on its booking website, he has
suffered harm for purposes of qualifying as a "aggrieved consumer."
Plaintiff seeks to
distinguish himself from Spade and its progeny by pointing out that he did not receive, in
essence, conforming goods but instead suffered a CF A-violating "drip pricing" practice during
his booking process. The Court does not agree.
First, the actual harm that Plaintiff pleads, namely financial harm caused by the drip
pricing, is just that-a harm attributable to drip pricing. But this alleged CF A violation is
divorced from to the allegedly unlawful Terms of Use provisions. In order to be an aggrieved
consumer under the TCCWNA, the consumer must have "suffered harm as a result of the
defendant's inclusion of prohibited language." Spade, 181 A.3d at 980 (emphasis added). The
harm allegedly suffered from the drip pricing practice is simply not a result of the challenged
provisions of the Terms of Use.
Second, Plaintiff is correct that this case is somewhat different than Spade by the very
fact that something is alleged to have gone wrong during the consumer transaction. In other
words, Plaintiff asserts that, unlike the plaintiffs in Spade, he received "non-conforming goods"
when he was deceived by the drip pricing practice on the booking website. See Spade, 181 A.3d
at 971 (contract for sale of goods with unlawful provisions does not give rise to harm when
goods are conforming). Plaintiff argues that this takes him out of the Spade hypothetical where
the consumer is not aggrieved. But, once again, Plaintiffs claim lacks any link between the
challenged provisions of the Terms of Use and the harm he claims to have suffered. Plaintiff fails
to allege a suffered harm that flows from the allegedly unlawful provisions. He does not plead
that he was prevented from or deterred from vindicating his rights in this or any lawsuit because
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of the language of those provisions. 4 He does not plead, for example, that he failed to seek
specific damages or add a specific defendant because he believed those were foreclosed by the
Terms of Use. He did not plead that he delayed in bringing his lawsuit or that he would have
crafted his claims or class description differently. He does not plead that the Terms of Use had
any effect on his hotel selection, booking process, or hotel experience. There is simply no harm
alleged to have occurred in his Complaint that can be plausibly traced to the provisions within
the Terms of Use.
In an attempt to show harm, Plaintiff identifies what he labels as a risk of harm,
specifically that the allegedly prohibited language creates a potential threat to Plaintiffs eligible
recovery. After all, so the theory goes, Wyndham could use the alleged unlawful provisions as a
defense to certain claims for liability or damages. But that has not happened in this case. See
Patterson, 2018 U.S. Dist. LEXIS 185086, at *15 ("Plaintiff has not alleged that ... Defendant
attempted to enforce the T&C Provisions to Plaintiffs detriment.") If that were to happen,
Plaintiff conceivably would have suffered the requisite harm. Plaintiff points out that such a
result enables Wyndham to dodge accountability by using violative language in its disclosures to
deter consumers from vindicating their rights but then avoiding actual liability by choosing not to
enforce the violative terms against those consumers that actually sue. 5 This may be a
predicament that the savvy consumer confronts, but Spade interpreted the TCCWNA to only
extend the right to sue to a consumer who is harmed by a non-conforming term, thus becoming
4
Wyndham notes that Plaintiff admitted in discovery that he had not actually read the Terms of
Use. Because the Complaint simply alleges no harm flowing from the Terms of Use, whether
Plaintiff read the Terms of Use is not a fact the Court need consider in deciding this issue.
Further, in any event, during the telephonic oral argument, Plaintiffs counsel acknowledged that
Plaintiff could not cure the pleading problem identified in this Opinion via amendment.
5
The fallacy to this policy argument is that it ignores the consumer who was harmed, even
minimally, and does in fact bring her case to court.
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"aggrieved." Spade, 181 A.3d at 981 (consumer with sales contract containing unlawful
provision but experiences no adverse consequences is not an aggrieved consumer under N.J.S.A.
56:12-17).
Even if this Court were to disagree with Spade's statutory interpretation, in questions of
state law, this Court is bound to follow New Jersey law as expressed by its supreme court.
Travelers Prop. Cas. Co. of Am. v. USA Container Co., 686 F. App'x 105, 107 (3d Cir. 2017).
The reality is that the New Jersey Supreme Court considered the TCCWNA's purpose of
preventing deceptive practices and applied a narrower definition of "aggrieved consumer" than
that advanced by Plaintiff here, and limited the right to sue to only consumers "who ha[ ve]
suffered some sort of harm as a result of the defendant's conduct." 181 A.3d at 980.
The Court therefore concludes that Spade simply did not extend "aggrieved consumer"
status to those who could in theory realize harm from deceptive contract terms but do not suffer
any actual harm (monetary or otherwise) flowing from the asserted deceptive terms. Plaintiff
candidly admitted that if the Court found his Complaint deficient on the issue of "aggrieved
consumer," he had no further factual allegations that could save his TCCWNA claim. Therefore,
any leave to amend would be futile in this case. The TCCWNA claim is dismissed from
Plaintiff's Complaint with prejudice.
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IV.
Conclusion
For these reasons, the Court grants Wyndham's Motion for Judgment on the Pleadings and
dismisses Count II, the TCCWNA claim, with prejudice.
An appropriate Order will issue.
Mark R. Hornak
Chief United States District Judge
cc: All counsel of record
Dated: January 16, 2019
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