The TCCWNA and Towing Companies

Pisack v. B&C Towing, Inc., ___ N.J. Super. ___ (App. Div. 2018).  This decision by Judge Gilson today in three consolidated appeals implicates the Predatory Towing Prevention Act, N.J.S.A. 56:13-7 et seq. (“Towing Act”), the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”), the Truth in Consumer Contract, Warranty, and Notice Act, N.J.S.A. 56:12-14 et seq. (“TCCWNA”), and even the Tort Claims Act, N.J.S.A. 59:1-1 et seq. (“TCA”).  Thus, there is a lot that can be learned from this opinion.

The cases involved the non-consensual towing of vehicles, at the direction of the police, by privately-owned towing companies who had contracts with the relevant municipalities.  The towing companies imposed administrative fees and other charges that plaintiffs in the three cases, all pleaded as putative class actions, asserted violated the Towing Act, the CFA, and the TCCWNA.

At the Law Division level, plaintiffs suffered setbacks in each case prior to trial.  In one matter, the Law Division granted summary judgment because plaintiff had not exhausted administrative remedies before filing suit, and because a local ordinance purportedly authorized the charge in question.  A second case resulted in summary judgment for the defense for those same reasons, and two others: (1) the TCCWNA did not apply because there was no contract between that plaintiff and the towing company, and (2) the towing company had derivative immunity under the TCA because the towing was performed at the direction of the police.  In the third case, the Law Division denied a defense motion to dismiss but ruled that plaintiff could not proceed on behalf of a class, but only on his own behalf.

Organizing these multiple complex issues, Judge Gilson laid out the questions for decision essentially as follows: (1) whether the Towing Act requires exhaustion of administrative remedies; (2) whether towing companies have derivative immunity under the TCA because they have towed at the direction of the police; (3) whether the Towing Act limits the types of services for which towing companies can charge fees in connection with non-consensual towing; (4) whether the TCCWNA applies to the non-consensual towing of vehicles; and (5) whether certain claims under the Towing Act, the CFA, and/or the TCCWNA can be pursued as class actions.  As those were all legal issues, the de novo standard of review applied.

Judge Gilson began the substantive analysis by summarizing the Towing Act, the CFA, and the TCCWNA.  For anyone not familiar with any of those statutes, his opinion provides an excellent orientation.  Among the things that he noted about the Towing Act is that, prior to that statute, municipalities had the power to establish schedules of fees and charges for towing companies, but the Towing Act precluded municipalities from authorizing any charges not permitted by the Towing Act or its implementing regulations.

On the exhaustion issue, Judge Gilson found no legislative intent to mandate exhaustion.  He noted that the Towing Act regulations require that parties who dispute charges “shall use good faith efforts to resolve the dispute,” but that everywhere else, the Towing Act and its regulations use only the word “may” in connection with a potential administrative agency role.  That, Judge Gilson said, “does not mandate administrative remedies.”  And without statutory authority, the agency “cannot create an administrative remedy that would foreclose plaintiff from pursuing a claim in court.”  Finally, the Towing Act expressly refers to the CFA, and makes remedies under the Towing Act additive to penalties or remedies under the CFA.  Judge Gilson found that this showed legislative intent to preserve the right to sue in court under the CFA, “and nothing in the Towing Act or its regulations limits that right.”

Judge Gilson then rejected the idea that towing companies had derivative immunity under the TCA.  “The TCA applies to private entities in limited circumstances only where those private entities act under the control and supervision of a public entity to perform a governmental service.”  Here, plaintiffs were not contesting the authority of the police to move vehicles, but only the charges at issue, and the police did not supervise those charges.  Nor did municipal ordinances insulate towing companies in light of the Towing Act, as discussed above.  Finally, “[t]he Legislature did not address sovereign immunity or the TCA in the Towing Act.  To accept the argument that towers are protected by sovereign immunity would render the Towing Act inapplicable any time the police directed a vehicle to be towed.”  That result was inconsistent with the Towing Act’s language and purpose.

The question of whether the Towing Act limits the types of services for which fees can be charged was easily resolved.  The Towing Act requires the agency to create a schedule of services for which towing companies may charge fees in connection with non-consensual towing, and makes it an “unlawful practice” charge fees not present on that schedule.  “In short, if a service is not listed on the [agency’s] schedule, a towing company cannot charge for that service.”

Plaintiffs could pursue their claims under the TCCWNA, Judge Gilson held.  They met the definition of “consumer” in that statute.  In particular, the TCCWNA covers bailments, and “when towing companies take a vehicle, they are doing so as bailees and vehicle owners are consumers as defined by the TCCWNA.”  And, contrary to defendants’ arguments, the towing companies’ bills are “consumer contracts” under the TCCWNA.  They constitute a “notice” (the only notice that vehicle owners receive of their charges), and such bills “are the type of deceptive consumer transaction that the Legislature aimed to prevent under the TCCWNA.”

Finally, after summarizing some of the basic law of class certification, Judge Gilson concluded that these cases might be able to proceed as class actions.  But because there was no record made in any of the cases on that issue, the panel left that for further proceedings on remand.

The ultimate result was reversal in all three cases.  Moreover, the panel found that certain charges were invalid as a matter of law, and directed that summary judgment be entered for plaintiffs in that regard.