Consumer Fraud Act and Product Liability Act Claims Can Co-Exist

Sun Chemical Corp. v. Fike Corp., 243 N.J. 319 (2020). This opinion by Justice Solomon today resolved another question (originally, multiple questions, but reformulated into a single question by the Supreme Court) certified by the Third Circuit. That question is whether “a Consumer Fraud Act [(“CFA”)]claim [can] be based, in part or exclusively, on a claim that also might be actionable under the Products Liability Act [(“PLA”)].” By a 5-0 vote (Justices Patterson and Timpone did not participate), the Court answered “yes.”

Justice Solomon provided encyclopedic background about the two statutes that will be a useful source for judges and practitioners going forward. He also analyzed in detail two key Supreme Court cases applying the CFA, Lemelledo v. Beneficial Management, 150 N.J. 255 (1997) (a case that was at the heart of a published Appellate Division just last week as well), and Real v. Radir Wheels, Inc., 198 N.J. 511 (2009), and the PLA, In re Lead Paint Litig., 191 N.J. 405 (1997), and Sinclair v. Merck & Co., 195 N.J. 51 (2008).

Justice Solomon noted that the Court had “rejected the idea that contract-based claims could be pled under the PLA, we have not yet considered the question at the center of this matter: whether tort-based claims that can be pled under the PLA can also– or instead– be pled under the CFA.” The answer was “yes.”

A claim for failure to warn of a product defect can be brought under the PLA, while “an affirmative misrepresentation that a specific flaw did not exist or or a product had never failed may be brought under the CFA,” Justice Solomon said. He offered other examples as well of claims that can or cannot be brought under the respective statutes. The Court concluded that “PLA and CFA claims may proceed in separate counts of the same suit, alleging different theories of liability and seeking dissimilar damages.”

Central to the ruling was the CFA’s provision that it is “in addition to and cumulative of any other right, remedy or prohibition accorded by the common law or statutes of this State.” N.J.S.A. 56:8-2.13. Had the Legislature intended the PLA to displace the CFA, it would have expressly so stated, Justice Solomon said. But the Legislature instead “has announced the opposite.”

Finally, Justice Solomon emphasized that “[t]he nature of the plaintiff’s damages does not determine whether the cause of action falls under the CFA or PLA; rather, it is the theory of liability underlying the claim that determines the recoverable damages.” Thus, “a CFA claim alleging express misrepresentations– deceptive, fraudulent, misleading, and other unconscionable commercial practices– may be brought in the same action as a PLA claim premised upon product manufacturing, warning, or design defects. In other words, the PLA will not bar a CFA claim alleging express or affirmative misrepresentations.” This particular case involved misrepresentation claims only, but the Court’s reasoning should apply to CFA omissions claims as well.