The “commerce clause” of the United States Constitution gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” U.S. Constitution, Art. 1, Sec. 8, Cl. 3. The commerce clause operates both to grant authority to Congress, and to restrict the regulatory authority of the states. Implicit in the commerce clause is the “dormant” commerce clause, which prohibits states from passing legislation that discriminates against or excessively burdens interstate commerce. The dormant commerce clause prevents protectionist state policies that favor state citizens or businesses at the expense of non-citizens that conduct business within that state. The New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14, et seq. is one such state law that violates the dormant commerce clause (among other clauses).
TCCWNA was enacted to protect consumers from being deceived into believing that they lack rights based on unenforceable language in consumer contracts, notices or signs. Specifically, TCCWNA Section 15 prohibits retailers from offering or displaying a written warranty, notice or sign “that violates any clearly established legal right of a consumer” under state or federal law. And Section 16 prevents retailers from including language in consumer contracts, warranties, notices or signs that waives a consumer’s rights under TCCWNA or that states that certain provisions may be void, unenforceable, or inapplicable in “some jurisdictions” without stating whether they are void, unenforceable, or inapplicable in New Jersey.
Although TCCWNA was enacted over 30 years ago, there has been a recent flood of class actions filed, largely in the context of website terms and conditions governing the use of websites. While TCCWNA is a New Jersey statute, most of these cases have been filed against non-New Jersey companies, demonstrating that all companies that do business on the Internet, no matter how large or how small, are potentially subject to TCCWNA. It is in this context that constitutional issues regarding the commerce clause arise.