Permissive Intervention Granted To Void Two-Year Old Settlement Entered In Favor Of Legally Invalid Class Action
In Local Baking Products, Inc. v. Westfield Rental Mart, Inc., the Superior Court of New Jersey, Appellate Division, affirmed a grant of permissive intervention to an insurer for purposes of decertifying a class action two years after settlement.
The class action was comprised of multiple Telephone Consumer Protection Act (TCPA) claims which were aggregated to form a $15,000,000 consent judgment against the defendant insured. The TCPA is a federal statute which provides a $500 private cause of action to an individual who receives an unsolicited facsimile advertisement.
The court held that intervention was timely notwithstanding the fact that the case had settled. Specifically, the court held that the insurer's right to intervene was not ripe until the New Jersey Supreme Court issued a ruling as to whether a TCPA class action was certifiable in a separate class action.
The court also found no prejudice to the parties as the consent judgment showed evidence of collusion between the class action plaintiff and the insured and the claims of the individual class members were preserved.
Ultimately, the court decertified the plaintiff’s class action and reaffirmed that TCPA class actions are not legally cognizable in New Jersey. The court reasoned that the TCPA was created with the goal of encouraging aggrieved parties to pursue small claims individually. A class action was not a superior method of adjudicating these claims and, thus, not certifiable.