SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3756-15T2

SHIRLEY POLANCO, individually

and on behalf of all others

similarly situated,

Plaintiff-Respondent/

Cross-Appellant,

v.

STAR CAREER ACADEMY, SC ACADEMY

HOLDINGS, INC. and SC ACADEMY,

INC.,

Defendants-Appellants/

Cross-Respondents.

_____________________________________

Argued May 15, 2018 – Decided July 26, 2018

Before Judges Fisher, Sumners and Natali.

On appeal from Superior Court of New Jersey, 

Law Division, Camden County, Docket No. 

L-0415-13.

David Jay argued the cause for appellants/ 

cross-respondents (Greenberg Traurig, LLP, 

attorneys; David Jay, Jason H. Kislin and 

Paige S. Nestel, on the brief).

Patricia V. Pierce and Thomas More Marrone 

argued the cause for respondent/crossappellant (Greenblatt Pierce Funt & Flores, 

LLC, and MoreMarrone, LLC, attorneys; Patricia 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." 

Although it is posted on the internet, this opinion is binding only on the 

parties in the case and its use in other cases is limited. R. 1:36-3.
2 A-3756-15T2

V. Pierce and Thomas More Marrone, on the 

brief).

Joseph B. Schmit (Phillips Lytle, LLP) of the 

New York bar, admitted pro hac vice, argued 

the cause for intervenor Summer Street Capital 

Partners, LLC (John R. Altieri and Joseph B. 

Schmit, attorneys; Joseph B. Schmit, of 

counsel; John R. Altieri, on the brief).

Laurence B. Orloff argued the cause for 

intervenors Andrew Kaplan and Quad Partners 

LLC (Orloff, Lowenbach, Stifelman & Siegel, 

PA, and Arthur H. Aufses III (Kremer Levin 

Naftalis & Frankel, LLP) of the New York bar, 

admitted pro hac vice, attorneys; Laurence B. 

Orloff, Xiao Sun and Arthur H. Aufses, III,

on the brief).

Stephen M. Orlofsky argued the cause for 

intervenors Gemini Investors IV, LP, Gemini 

Investors V, LP, James Rich and Robert Menn 

(Blank Rome LLP, attorneys; Stephen M. 

Orlofsky, David C. Kistler and Michael A. 

Iannucci, of counsel and on the brief).

PER CURIAM

This class action alleges violations of the New Jersey 

Consumer Fraud Act (Act), N.J.S.A. 56:8-1 to -20. After an adverse 

jury verdict, defendants Star Career Academy, SC Academy Holdings. 

Inc. and SC Academy, Inc. (Star) appeal from the final judgment 

and several pre- and post-trial orders. Star claims:

POINT I

THE TRIAL COURT'S REFUSAL TO INTERPRET THE 

[SURGICAL TECHNOLOGY] LAW ON SUMMARY JUDGMENT 

WAS REVERSIBLE ERROR.
3 A-3756-15T2

POINT II

THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY 

PRECLUDING STAR FROM PRESENTING EVIDENCE TO

SHOW THAT PLAINTIFF HAD NOT ESTABLISHED THE 

ELEMENTS OF THE NJCFA CLAIM THAT SHE WAS 

ASSERTING ON BEHALF OF THE CLASS.

A. IT WAS REVERSIBLE ERROR TO PRECLUDE 

STAR FROM PRESENTING JOBS EVIDENCE AND 

"REASONS FOR UNEMPLOYMENT EVIDENCE" TO 

SHOW THAT PLAINTIFF HAD NOT PROVEN HER 

NJCFA CLAIM.

B. IT WAS REVERSIBLE ERROR TO PRECLUDE 

STAR FROM PRESENTING "VALUE" EVIDENCE TO 

SHOW THAT PLAINTIFF HAD NOT PROVEN HER 

NJCFA CLAIM.

POINT III

THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY 

REFUSING TO DECERTIFY A CLASS EVEN THOUGH 

COMMON ISSUES DID NOT PREDOMINATE OVER 

INDIVIDUAL ONES.

Plaintiff Shirley Polanco, individually and as the class 

representative, seeks to affirm the final judgment, and she crossappeals claiming the court improperly reduced her statutorily 

authorized attorney fee award. She also appeals from the court's 

order denying her motion for leave to file a second class action 

complaint to add intervenor Andrew Kaplan (Kaplan) and 

unidentified defendants as parties. Specifically, she claims:
4 A-3756-15T2

POINT I1

THE TRIAL COURT COMMITTED REVERSIBLE ERROR 

WHEN IT DENIED PLAINTIFF'S TIMELY MOTION TO 

ADD A SINGLE INDIVIDUAL DEFENDANT, AND 

CORPORATE AND INDIVIDUAL "DOE" DEFENDANTS. 

THE COURT DENIED PLAINTIFF'S REQUEST MORE THAN 

ONE YEAR BEFORE TRIAL AND EVEN BEFORE CLASSWIDE MERITS DISCOVERY HAD COMMENCED, DESPITE 

NO SHOWING OF ANY PREJUDICE TO THE PROPOSED 

INDIVIDUAL MUCH LESS TO ANY "DOE," WHOSE 

IDENTITY WAS UNKNOWN AT THAT STAGE.

A. THE LEGAL STANDARD APPLICABLE TO A 

MOTION FOR LEAVE TO AMEND.

B. THE TRIAL COURT ABUSED ITS DISCRETION 

BY DENYING PLAINTIFF'S MOTION FOR LEAVE 

TO AMEND.

POINT II

THE TRIAL COURT COMMITTED REVERSIBLE ERROR IN 

CONNECTION WITH ITS FEE AWARD TO CLASS COUNSEL

A. THE APPLICABLE LEGAL STANDARD FOR 

AWARDING FEES AND COSTS.

B. THE REQUESTED FEES ARE APPROPRIATE 

UNDER THE RENDINE/WALKER2 FACTORS.

1. THE TIME SPENT AND RATES 

REQUESTED ARE REASONABLE.

C. A 75% FEE ENHANCEMENT IS APPROPRIATE. 

 

1 We have renumbered plaintiff's appellate points for ease of 

reference.

2 Rendine v. Pantzer, 141 N.J. 292 (1995); Walker v. Giuffre, 209 

N.J. 124 (2012). 
5 A-3756-15T2

After a thorough review of the record, we affirm the court's 

order denying Star's motion for summary judgment as genuine issues 

of material fact existed with respect to Star's misrepresentations 

and omissions regarding its "programmatic" accreditation for 

surgical technologists. But, because we agree with Star that 

common questions of law or fact did not predominate over questions 

affecting individual members as required by Rule 4:32-1(b)(3), we 

vacate the court's order certifying the class. We also conclude 

that the court's evidentiary rulings in which it materially limited 

Star from introducing evidence that was relevant to Star's defenses 

under the Act and to challenge plaintiff's and the class members' 

damages were erroneous and provide an independent basis to reverse 

the jury’s verdict. 

Finally, because the court's decision denying plaintiff's 

request to amend the pleadings to add new parties was based, in 

large part, on the belated nature of the application we also vacate 

that order as our opinion decertifying the class removes those 

concerns. Accordingly, we vacate the final judgment, and any 

attorney fee award, and remand for proceedings in accordance with 

this opinion.

I.

Star and its affiliates are owners of for-profit schools, 

including the institution at issue that trains surgical 
6 A-3756-15T2

technicians (ST).3 Star's mission is to provide "performancebased occupational training to prepare students for entry-level 

employment" in various fields, including allied health fields. 

In 2011, N.J.S.A. 26:2H-12.63 (the ST law) was passed 

addressing five routes for employment as a surgical technologist 

in a New Jersey health care facility. One route was successful 

completion of a "nationally or regionally accredited educational 

program for surgical technologists." N.J.S.A. 26:2H-12.63(a). An 

alternative route was to obtain a "certified surgical technologist 

credential administered by the National Board of Surgical 

Technology and Surgical Assisting or its successor, or other 

nationally recognized credentialing organization." N.J.S.A.

26:2H-12.63(b). 

There are two types of higher education accreditation: 

programmatic and institutional. The Commission on Accreditation 

of Allied Health Education Programs (CAAHEP) and the Accrediting 

Bureau of Health Education Schools (ABHES) are the only nationally 

recognized accreditors of ST programs. Star did not receive 

programmatic accreditation from CAAHEP or ABHES. The Accrediting 

Commission of Career Schools and Colleges (ACCSC) is approved by 

the United States Department of Education (USDOE) to give 

 

3 The terms surgical technician and surgical technologist are 

used interchangeably in this opinion. 
7 A-3756-15T2

institutional accreditation, but is not authorized to give 

programmatic accreditation to an ST program. In August 2010, 

ACCSC recognized Star as an accredited institution.

Plaintiff enrolled in Star's ST program in July 2011. Her 

tuition was $18,213. While enrolled in the program, plaintiff 

asked the director of Star's ST program whether the newly passed 

ST law would affect her ability to gain employment as a ST. The 

director assured her that graduating from Star's program would 

qualify her under the ST law. The director of externships for 

Star's Clifton campus also told plaintiff that Star's ST program 

was accredited. 

Other students questioned Star admissions officers as to how 

the ST law would affect them. Admissions officers discussed the 

issues surrounding Star's program accreditation under the ST law 

with their subordinates, but instructed them to "sell the program 

as best as [they] could." 

A year after the ST law was enacted, an entire class of ST 

students withdrew from the program "in protest" because the 

Association of Surgical Technologists (AST), a national 

organization representing the profession, told them that the 

program was worthless. According to a Star administrator, 

admissions officers gave inaccurate information to students on the 

ST law and accreditation requirements.
8 A-3756-15T2

In August 2012, John A. Calabria of the New Jersey Department 

of Health (DOH) issued a memorandum addressing programmatic 

accreditation under the ST law that stated, "If a[n] [ST] program 

is listed as accredited [by the USDOE] . . . , then it is compliant 

with [the ST law]." Two months after Calabria's memorandum, an 

AST representative emailed Star that, to comply with the ST law, 

programmatic accreditation was necessary and that an ST program 

should only be considered regionally or nationally accredited for 

purposes of the ST law if it was accredited by CAAHEP or ABHES. 

Star's CEO and president disagreed with AST's understanding of the 

ST law, explaining that it was sufficient if a school had 

institutional accreditation rather than programmatic accreditation 

and that accreditation by ABHES or CAAHEP was unnecessary. 

According to plaintiff, the National Center for Competency 

Testing (NCCT) administered testing to graduates of ST programs, 

but was not nationally recognized as required by N.J.S.A. 26:2H12.63(b). NCCT recognized Star's ST program as approved for the 

"tech in surgery-certified" certification exam; in other words, 

graduates of the Star ST program were eligible for the exam. 

However, because NCCT was not nationally recognized under the ST 

law, they added a disclaimer to their website indicating that 

their exam was not accepted in New Jersey. Star's director of 

clinical externships contacted NCCT asking them to remove the 
9 A-3756-15T2

disclaimer and "stop making such a definitive statement that [the 

NCCT certification] is not accepted" in New Jersey. 

Star also asked the DOH to confirm that Star's accreditation 

from ACCSC met the requirements of the ST law. Star represented 

to DOH that its ST program was accredited by the ACCSC. The DOH 

responded, "A[n] [ST] program offered in New Jersey that is 

accredited by any accrediting agency recognized by the [USDOE] 

meets the requirements of the [ST law]." However, while Calabria's 

2012 memorandum reflected his understanding that institutional 

accreditation was sufficient and programmatic accreditation was 

not necessary, he later recognized that institutional 

accreditation was not sufficient and programmatic accreditation 

was necessary. A supplemental memorandum reflecting Calabria's 

change in knowledge was never issued. 

Despite uncertainty about whether Star's ST program met the 

requirement of the ST law, Star continued to enroll students. In 

February 2014, Star began to provide current and prospective 

students with a disclosure indicating that the law was in flux and 

Star disagreed with any interpretation of the ST law finding that 

its ST program did not comply with the law. 

Approximately three years after enrolling, plaintiff filed a 

class action complaint naming Star as the sole defendant and 

alleging that Star violated the Act by misrepresenting information 
10 A-3756-15T2

about the accreditation of its ST program in connection with the 

ST law. Plaintiff specifically claimed Star failed to disclose: 

(a) the requirements and consequences of New 

Jersey's [ST] Law . . .;

(b) that [Star] was not a nationally or 

regionally accredited educational program for 

surgical technologists within the meaning of 

the [ST] Law;

(c) that [Star's] [ST] [p]rogram graduates 

would not be permitted to obtain a [ST] 

credential administered by the National Board 

of Surgical Technology and Surgical Assisting 

or its successor, or other nationally 

recognized credentially organization; 

(d) that because the [Star] [ST] [p]rogram did 

not comply with the [ST] Law, [Star] [ST] 

Program graduates would not be permitted to 

be employed in the State of New Jersey as 

Surgical Technologists, under the terms of the 

[ST] law; and

(e) that [Star's] [ST] [p]rogram did not 

otherwise qualify [p]laintiff and other [Star] 

students to practice surgical technology upon 

completion of the Program. 

She also described her, and the other class members', ascertainable 

loss as tuition and loan costs. The proposed class was comprised 

of "all individuals who were enrolled in [Star's] [ST] [p]rogram 

for surgical technician training to take place in the State of New 

Jersey as of June 29, 2011 and thereafter." 

Star filed two unsuccessful motions for summary judgment. In 

its second motion, the court rejected Star's request for a 
11 A-3756-15T2

definitive interpretation of the ST statute concluding that 

material factual questions existed surrounding Star's knowledge 

of the ST law and the accreditation of its ST program. The court 

also denied Star's motion for reconsideration. 

Over Star's objection, the court certified a class consisting 

of individuals enrolled in Star's ST program after June 29, 2011, 

and appointed plaintiff class representative. The court denied 

Star's subsequent motion to decertify the class. We denied Star’s 

motion for interlocutory review of that determination and its 

motion for reconsideration. The Supreme Court also denied Star's 

motion. Also, plaintiff's motion to amend the pleadings to add 

various defendants was denied by the court as untimely. 

Prior to trial, the parties filed various in limine motions 

surrounding the admissibility of evidence pertaining to class 

members' employment, reasons for class members' unemployment, and 

the value of the Star ST program degree. In finding that the 

claims of the class addressed Star's misrepresentations and 

omissions, rather than jobs, the court precluded Star from 

including the jobs, reasons for unemployment, and value evidence 

for liability purposes. 

The jury returned a $2.969 million verdict in favor of the 

class. In accordance with the Act, the court trebled the damages 

and entered final judgment, plus interest, in the amount of 
12 A-3756-15T2

$9,091,941.35. Pursuant to plaintiff's motion for attorneys' fees 

and costs, the court awarded the class $1.7 million in attorneys' 

fees.

II.

Star argues in its first point that the court twice erred in 

refusing to grant its motions for summary judgment and, more 

specifically, to interpret the ST law in its favor. We disagree 

and conclude that the summary judgment record established the 

existence of genuine and material factual questions that precluded 

summary judgment. 

In ruling on a summary judgment motion, a trial court must 

"consider whether the competent evidential materials presented, 

when viewed in the light most favorable to the non-moving party, 

are sufficient to permit a rational factfinder to resolve the 

alleged disputed issue in favor of the non-moving party." Brill 

v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). An 

appellate court reviews a grant of summary judgment de novo, using 

the same standard as the trial court. Turner v. Wong, 363 N.J. 

Super. 186, 198-99 (App. Div. 2003). Thus, we must determine 

whether a genuine issue of material fact is present and, if not, 

evaluate whether the trial court's ruling on the law was correct. 

Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 

167 (App. Div. 1998). To assess whether the facts in the motion 
13 A-3756-15T2

record created a genuine and material dispute, we briefly discuss 

the elements and principles underpinning the Act.

The Act is to be construed broadly to meet its remedial 

purpose and root out consumer fraud. Lemelledo v. Beneficial 

Mgmt. Corp. of Am., 150 N.J. 255, 264 (1997). The Supreme Court 

has emphasized that it is the "capacity to mislead [that] is the 

prime ingredient of all types of consumer fraud." Cox v. Sears 

Roebuck & Co., 138 N.J. 2, 17 (1994). See also Fenwick v. Kay Am. 

Jeep, Inc., 72 N.J. 372, 378 (1977). 

The Act provides treble damages when a person suffers an 

"ascertainable loss" as a result of:

[t]he act, use or employment by any person of 

any unconscionable commercial practice, 

deception, fraud, false pretense, false 

promise, misrepresentation, or the knowing, 

concealment, suppression, or omission of any 

material fact with intent that others rely 

upon such concealment, suppression or 

omission, in connection with the sale or 

advertisement of any merchandise or real 

estate. . . . 

[N.J.S.A. 56:8-2.]

Thus, a claim under the Act is comprised of three elements: 

"(1) unlawful conduct . . .; (2) an ascertainable loss . . .; and 

(3) a causal relationship between the defendants' unlawful conduct 

and the plaintiff's ascertainable loss." Int'l Union of Operating 

Eng'rs Local No. 68 Welfare Fund v. Merck & Co., Inc., 192 N.J. 
14 A-3756-15T2

372, 389 (2007) (quoting N.J. Citizen Action v. Schering-Plough 

Corp., 367 N.J. Super. 8, 12-13 (App. Div. 2003)). Unlawful 

practices under the Act fall into three categories: affirmative 

acts, knowing omissions, and regulation violations. Cox, 138 N.J. 

at 17. 

To suffer an ascertainable loss, a plaintiff must "suffer a 

definite, certain and measurable loss, rather than one that is 

merely theoretical." Bosland v. Warnock Dodge, Inc., 197 N.J. 

543, 558 (2009). "The certainty implicit in the concept of an 

'ascertainable' loss is that it is quantifiable or measurable." 

Ibid. (quoting Thiedemann v. Mercedes-Benz U.S., LLC, 183 N.J. 

234, 248 (2005)). Moreover, the ascertainable loss requirement 

has been understood generally in terms making it equivalent to 

"any lost 'benefit of [the] bargain.'" Ibid. (alteration in 

original) (quoting Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 11-

13 (2004)). 

The ST law provides five routes for an individual to become 

eligible to "practice surgical technology in a health care 

facility." N.J.S.A. 26:2H-12.63. Only two have relevance here: 

the successful completion of "a nationally or regionally 

accredited educational program for surgical technologists," 

N.J.S.A. 26:2H-12.63(a), and the maintenance of a "certified 

surgical technologist credential administered by the National 
15 A-3756-15T2

Board of Surgical Technology and Surgical Assisting or its 

successor, or other nationally recognized credentialing 

organization," N.J.S.A. 26:2H-12.63(b). 

According to Star, it is undisputed that it possessed a 

credential from ACCSC, a "nationally recognized credentialing 

organization," ibid., and therefore Star graduates, by the clear 

and unambiguous language of the ST statute (as informed and 

supported by the relevant legislative history) were eligible to 

take any necessary licensing exam and otherwise practice as 

surgical technologists. Thus, Star argued before the court and 

before us that it could not have violated the Act because it did 

not misrepresent its ability for its graduates to be certified as 

surgical technologists. 

The court, in denying Star's second motion for summary 

judgment, considered interpretation of the ST Law irrelevant, 

stating that the critical issue was whether, beginning in 2011, 

Star representatives failed to disclose the widespread 

disagreement with its interpretation of the ST law.

We agree that in light of the significant evidence submitted 

by plaintiff establishing that Star made material 

misrepresentations to students regarding the lack of programmatic 

accreditation and its failure to inform its students that it was 

aware of concerns regarding Star's lack of such accreditation, it 
16 A-3756-15T2

was unnecessary for the court to interpret N.J.S.A. 26:2H-12.63 

for plaintiff's consumer fraud claim to survive summary judgment.4 

Factual questions abound in the summary judgment record on 

this point. For example, employees of Star acknowledged that 

Star's ST program lacked program accreditation and Star was 

unprepared to seek such accreditation. Also, in sworn 

certifications, students of Star's ST program alleged that Star 

failed to disclose that relevant organizations and members of the 

healthcare field questioned Star's compliance with the ST law. 

The summary judgment record also established that Star attempted 

at multiple times to thwart the AST from publicly interpreting the 

ST statute as requiring programmatic accreditation. 

From these facts we conclude that an individual seeking an 

education from a for-profit school like Star has the inherent 

right to know, prior to enrollment, that the school does not hold 

both programmatic and institutional credentials if for no other 

reason than to give students the choice to attend another 

institution that possesses both accreditations. Students who 

attend Star and similar vocational institutions are primarily 

 

4 We note that for reasons not sufficiently explained in the 

record, and despite the undisputed controversy regarding the 

interpretation of the ST law, Star never sought declaratory relief 

in accordance with N.J.S.A. 2A:16-50 to -62.
17 A-3756-15T2

interested in obtaining a degree to advance their professional 

careers and increase their earning potential. That Star was not 

programmatically credentialed, giving plaintiff all reasonable 

inferences from the summary judgment record, influenced certain 

potential employers of Star graduates. In light of these concerns, 

it is not unreasonable to conclude that a student deciding to 

enroll at Star, if informed that it did not have programmatic 

approval, would elect to enroll elsewhere and thus we cannot ignore 

that Star's potential and "capacity to mislead" plaintiff on this 

point is of material concern. Cox, 138 N.J. at 17.5 Also, while 

the record contains allegations of multiple misrepresentations 

made by Star to certain class members unrelated to its programmatic 

accreditation — which affects the propriety of class 

certification, as discussed in Section III — based on just these 

genuine and material factual questions, summary judgment was 

appropriately denied. 

 

5 We note that the record contains evidence that such alternatives 

did exist for students interested in becoming surgical 

technologists. Indeed, Bergen Community College's surgical 

technology program possessed both programmatic and institutional 

accreditation. 
18 A-3756-15T2

III.

Star also argues that the court improperly certified the 

class because common issues did not predominate over individual 

ones. We agree.

Class actions are governed by Rules 4:32-1 and -2. 

Specifically, Rule 4:32-1(a) dictates: 

One or more members of a class may sue or be 

sued as representative parties on behalf of 

all only if (1) the class is so numerous that 

joinder of all members is impracticable, (2) 

there are questions of law or fact common to 

the class, (3) the claims or defenses of the 

representative parties are typical of the 

claims or defenses of the class, and (4) the 

representative parties will fairly and 

adequately protect the interests of the class. 

New Jersey courts "have consistently held that the class 

action rule should be liberally construed." Myska v. New Jersey 

Mfts. Ins. Co., 440 N.J. Super. 458, 475 (App. Div. 2015). In 

order to bring a class action lawsuit, it is well established that 

the named representative must individually possess standing to 

bring their claims. Rosen v. Continental Airlines, Inc., 430 N.J. 

Super. 97, 107 (App. Div. 2013). 

Regarding the commonality of questions of law or fact, "[a]ll 

of the factual and legal questions in the case need not be 

identical for all of the proposed class members." Goasdone v. Am. 

Cyanamid Corp., 354 N.J. Super. 519, 528 (Law Div. 2002). In 
19 A-3756-15T2

fact, "a single common question" satisfies the requirement of Rule

4:32-1(a)(2). Id. at 529. The threshold for commonality of 

questions of law or fact is relatively low. Ibid. 

In addition to the requirements of Rule 4:32-1(a), a class 

action may be maintained when "the court finds that the questions 

of law or fact common to the members of the class predominate over 

any questions affecting only individual members, and that a class 

action is superior to other available methods for the fair and 

efficient adjudication of the controversy." R. 4:32-1(b)(3). The 

proposed class must be "sufficiently cohesive to warrant 

adjudication by representation." Illiadis v. Wal-Mart Stores, 

Inc., 191 N.J. 88, 108 (2007) (quoting Amchem Prods. v. Windsor, 

521 U.S. 591, 623 (1997)). The court should conduct a pragmatic 

assessment of numerous factors, including:

[T]he significance of the common questions . 

. . [which] involves a qualitative assessment 

of the common and individual questions rather 

than a mere mathematical quantification of 

whether there are more of one than the other. 

. . . [W]hether the "benefit" of resolving 

common and presumably some individual 

questions through a class action outweighs 

doing so through "individual actions." . . . 

[W]hether a class action presents "a common 

nucleus of operative facts."

[Lee v. Carter-Reed Co., L.L.C., 203 N.J. 496, 

519-20 (2010) (citations omitted).]
20 A-3756-15T2

A plaintiff need not show an "absence of individual issues 

or that the common issues dispose of the entire dispute." 

Illiadis, 191 N.J. at 108. The basic question is "whether the 

potential class, including absent members, seeks 'to remedy a 

common legal grievance.'" In re Cadillac V8-6-4 Class Action, 93 

N.J. 412, 431 (1983) (quoting 3B James W. Moore et al., Moore's 

Federal Practice ¶ 23.45[2] at 23-332 (1982)).

Among the concerns related to certifying a class based upon 

violations of the Act are the inherent individualized causation 

inquiries related to the class' ascertainable loss. As recently 

observed by the Third Circuit, the "fact of damage," separate and 

apart from the amount of damages, is "an element of liability 

requiring plaintiffs to prove that they have suffered some harm 

traceable to the defendant's conduct — in other words, the 

'ascertainable loss' and 'causal relationship' requirements under 

the [Act]." Harnish v. Widener Univ. Sch. of Law, 833 F.3d 298, 

305 (3d Cir. 2016).6 At the class certification stage, and while 

analyzing predominance, a court must "formulate some prediction 

as to how specific issues will play out" and may not rely upon a 

"mere 'threshold showing' that a proposed class-wide method of 

 

6 As Rule 4:32 is modeled after Federal Rule of Civil Procedure 

23, construction of the federal rule has been described as 

"helpful, if not persuasive, authority." Muise v. GPU, Inc., 371 

N.J. Super. 13, 31 (App. Div. 2004).
21 A-3756-15T2

proof is 'plausible in theory.'" Id. at 304 (quoting In re 

Hydrogen Peroxide, 552 F.3d 305, 311, 321, 325 (3d Cir. 2008)). 

Also, "[a]lthough the computation of damages among the members of 

the class would differ, [and] this factor alone is not sufficient 

in itself to justify dismissal of a class action," Lusky v. Capasso 

Bros., 118 N.J. Super. 369, 373 (App. Div. 1972), a class "'must 

first demonstrate economic loss' — that is, the fact of damage —

'on a common basis,'" Harnish, 833 F.3d at 306 (quoting Newton v. 

Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 189 (3d 

Cir. 2001)).

In Morgan v. Markerdowne Corp., 201 F.R.D. 341, 345 (D.N.J. 

2001), the court found that individualized causation issues 

precluded class certification based on a consumer fraud claim. In 

that case, the putative class alleged that the defendant, a 

computer training school, made numerous misrepresentations about 

the school's job-placement rate and the ability of students to 

obtain employment. Ibid. Specifically, the class alleged that 

the school made misrepresentations through oral statements, 

brochures, and false alumni testimonials. Ibid. 

The court acknowledged that, although proof of reliance is 

not required under the Act, the plaintiff was still required to 

establish that an ascertainable loss was caused by an unlawful 

action attributable to the defendant. Id. at 350. In denying
22 A-3756-15T2

class certification, the court concluded that many of the proposed 

class members "suffered no ascertainable loss whatsoever" because 

they found work after attending the school and, thus, "typicality, 

commonality, and predominance" failed to exist. Ibid. The court 

further explained that, as to those class members who suffered an 

ascertainable loss as a result of unemployment, they too could not 

maintain a class action as they "[could not] speak with one voice 

in declaring an unlawful practice of [the defendant] to be the 

cause of such loss" because of the varying misrepresentations and 

reasons for enrollment. Ibid.

Here, the individualized factual inquiries surrounding Star's 

misrepresentations and the nexus between those misrepresentations 

and omissions and the class members' ascertainable loss compels 

decertification. 

Plaintiff's complaint alleged that Star misrepresented and 

failed to disclose the requirements of the ST law in relation to 

Star's ST program. As noted, the class was subsequently defined 

as "all individuals who were enrolled in [Star's] Surgical 

Technology Program for surgical technicians training to take place 

in the State of New Jersey as of June 29, 2011 and thereafter." 

At a hearing on Star's motion for reconsideration, plaintiff's 

counsel confirmed the narrow scope of the class stating that the 

"case is about" the "fact that Star didn't notify [the class 
23 A-3756-15T2

regarding] . . . potential issues about how the statute was being 

interpreted" and the "failure of Star to . . . make everybody

aware . . . [t]hat [Star] was stuck in this muddle of . . . what 

[the ST law] means." In terms of damages, counsel explained that 

the class pursued an "expectation interest[s]" theory in terms of 

the value of the education they thought they were receiving, which 

was to be numerically based upon the tuition paid.

However, as Star predicted, and what was borne out at trial, 

the class' claims under the Act devolved into a multitude of 

individualized inquiries. Indeed, plaintiff's counsel argued at 

trial that, "[t]his case is not limited to what Star said about 

the [ST] [l]aw or didn't say about the [ST] [l]aw. It's broader 

than that." Counsel elaborated that, rather than a single 

fraudulent scheme, in addition to the issues surrounding the ST 

law, Star failed to advise the class about: (1) their ineligibility 

to sit for the necessary certification test; (2) Star's "sham 

externship program" that failed to enable eligibility for the NCCT 

certification; and (3) Star's failure to "come clean" about its 

job statistics. 

Consistent with this expansive nature of the class, the 

parties stipulated at trial (after Star twice objected to class 

certification) that the class consisted of certain sub-groups: 219 

members who did not pay tuition due to government grants (group 
24 A-3756-15T2

one); 125 members who ceased attending Star prior to the passage 

of the ST law (group two); 150 members who began attending Star 

on or after Star issued its disclosure to current and prospective 

ST students (group three); 162 members who were dismissed or 

voluntarily withdrew from the Star ST program (group four); and 

99 members who graduated from Star's ST program and found jobs 

with the ST field (group five). The sub-groups were formed to 

analyze "the impact of total amounts paid based on certain facts 

and circumstances of specific class members."7 

The class claims thus pertained to an array of 

misrepresentations and omissions surrounding the ST law and Star's 

ST program, externship program, and job statistics in violation 

of the Act. A class based upon these disparate series of alleged 

misrepresentations simply cannot satisfy the predominance 

requirement of Rule 4:32-1(b)(3) because innumerable 

individualized inquiries are necessary to address the causal 

 

7 Although plaintiff based its damages claim on the tuition paid 

by the class, counsel repeatedly claimed during trial that the 

class member also sustained damages based on the wasted time spent

in the Star ST program. No evidence, other than the paid tuition, 

was submitted to quantify that alleged loss and which class members 

sustained it.
25 A-3756-15T2

connection between Star's actions and the class' ascertainable 

loss.8 

We acknowledge that a plaintiff need not show an "absence of 

individual issues or that the common issues dispose of the entire 

dispute." Illiadis, 191 N.J. at 108. But here the class seeks to 

address differing actions on the part of Star that require us to 

consider on an individualized basis the causal connections between 

Star's varying violations under the Act and the wildly different 

class members' ascertainable losses. The individualized inquiries 

necessary to evaluate the CFA claim include: (1) whether each 

category of misrepresentation or omission actually occurred; (2) 

what precise misrepresentation or omission was communicated to 

each class member; and (3) whether each class member suffered an 

ascertainable loss that was caused by the alleged 

 

8 Any doubt regarding the broad scope of the class as ultimately 

constituted is answered by reviewing the first question of the 

verdict sheet in which the jurors were permitted to impose 

liability upon Star upon finding it "engaged in either . . . an 

unconscionable commercial practice of affirmative representation 

regarding getting plaintiffs to enroll or to remain enrolled in 

defendant's surgical technology program or a knowing concealment 

of material information made with the intent to deceive regarding 

getting plaintiffs to enroll or to remain enrolled in the 

defendant's surgical technology Program." That question invited 

the jurors to find liability on behalf of the class exactly as 

plaintiff sought — not on a common question that predominated but 

on a host of disparate misrepresentations with different 

consequences concerning the causative loss, if any, to certain 

class members.
26 A-3756-15T2

misrepresentation or omission. Similar to the class in Morgan, 

the present class "cannot speak with one voice in declaring an 

unlawful practice" of Star to be the cause of their losses. By 

way of example, sub-group three of the class — those who enrolled 

after Star's disclosure surrounding the ST law and its lack of 

program accreditation — demonstrates the significant causation and 

ascertainable loss barriers precluding class certification because 

this group admittedly enrolled after Star addressed in February 

2014, or at least attempted to address, the concerns underlying 

the class' initial misrepresentation claims. 

While we acknowledge the court divided the class into the 

aforementioned sub-groups to analyze the total paid by the class 

in relation to the differing circumstances of certain class 

members, in our view that segregation nevertheless demonstrates 

the significant individualized issues related to the nexus between 

Star's misrepresentations and the class members' damages. And, 

although the class members' damage calculations may differ, see

Lusky 118 N.J. Super. at 373, our concerns relate to the fact that 

the class, as evidenced by the sub-groups, cannot "demonstrate 

economic loss . . . on a common basis," Harnish, 833 F.3d at 306.9 

 

9 The court's final judgment further illustrates the defective 

nature of the class. That order directs distribution of over nine 

million dollars "to the [c]lass [m]embers on a pro rata basis." 

Thus, damages could be awarded to class members who were not harmed 
27 A-3756-15T2

While we find that the class must be decertified, our decision 

should not be interpreted to conclude that a class is not an 

appropriate vehicle to address Star's purported misrepresentations 

and omissions surrounding the ST law for those who have paid 

tuition fees or other ascertainable losses. Such a class action 

may further the goals of judicial economy, cost-effectiveness, 

convenience, and consistent treatment of class members, Iliadis, 

191 N.J. at 104. However, any certified class must satisfy the 

relevant Rules governing class actions. That simply did not occur 

here.

IV.

Star also argues that the court committed reversible error 

by precluding it from introducing evidence at trial related to: 

jobs that class members held (jobs evidence); efforts of class 

members to get positions (reasons for unemployment evidence); and 

the value of the Star diploma to members of the class (value 

evidence). We agree. We address this issue because it serves as 

an independent basis to reverse the jury's verdict and to provide 

guidance with respect to any future trial proceedings. 

A court's evidentiary rulings are entitled to substantial 

 

and despite the absence of predominant class issues. Such an 

award is inconsistent with class action compensation principles. 

See Lewis v. Casey, 518 U.S. 343, 349 (1996).
28 A-3756-15T2

deference. Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 

N.J. 369, 374 (2010). A court's determination to admit evidence 

will not be reversed absent a finding of abuse of discretion. 

State v. Wakefield, 190 N.J. 397, 491 (2007). Under that standard, 

substantial latitude is afforded to a trial court in deciding 

whether to admit evidence, and "an appellate court should not 

substitute its own judgment for that of the trial court, unless 

the trial court's ruling was so wide of the mark that a manifest 

denial of justice resulted." Id. at 491 (quoting State v. Brown, 

170 N.J. 138, 147 (2001)).

Star maintains that the court erred in failing to permit jobs 

evidence which would have established that members of the class 

were employed as surgical technologists or in related fields. Star 

also argues that the court erred in not admitting value evidence 

that would have proven that for many graduates the Star diploma 

was not worthless. Star also sought to establish that its ST 

program compared positively with other similar programs and that 

its graduates were employed in jobs similar to the graduates of 

other programs. 

The court admitted jobs evidence only in relation to Star's 

reporting requirements and reasons for unemployment evidence only 

to assess class members' credibility. Value evidence was deemed 

largely inadmissible. We find that the jobs, reasons for 
29 A-3756-15T2

unemployment, and value evidence were relevant to the materiality 

of the purported misrepresentations, the issue of causation under 

the CFA and to the quantum of any damages. We therefore conclude 

that the court abused its discretion in failing to admit such 

evidence. 

N.J.R.E. 401 defines relevant evidence as evidence "having a 

tendency in reason to prove or disprove any fact of consequence 

to the determination of the action." Unless otherwise prohibited, 

"all relevant evidence is admissible." N.J.R.E. 402. 

First, regardless of whether the class sought damages based 

upon out-of-pocket expenses or an expectation theory, the value 

evidence was directly relevant to mitigate the class' damages. 

Indeed, such evidence could have established what plaintiff and 

the class received in return for attending Star's program. The 

class cannot seek damages based upon the tuition paid to Star 

while precluding Star from establishing that the education had 

some value. 

The jobs evidence established that members of the class were 

working as surgical technologists or in related fields and was 

relevant to the mitigation of the class' damages. It also tended 

to "prove or disprove" whether Star's actions caused the class to 

suffer an ascertainable loss. And, the reasons for unemployment 

evidence directly related to the causation issue under the Act as 
30 A-3756-15T2

it would have permitted Star to demonstrate that certain members 

of the class withdrew or were dismissed from the ST program for 

reasons unrelated to the ST law. 

Plaintiff successfully thwarted the introduction of this 

evidence by maintaining that its damages theory was based on the 

class members' loss of tuition not lost wages or other job related 

damages and therefore the case was fundamentally different than 

the damages sought in Harnish or Markerdowne. But a party's stated 

theory of a case cannot serve as the basis to preclude an adverse 

party from introducing evidence to defend a claim, particularly 

when the evidence has the tendency in reason "to prove or disprove 

any fact of consequence to the determination of the action." 

N.J.R.E. 401. Here, the excluded evidence related to materiality, 

causation and ascertainable loss. We acknowledge a trial court's 

authority under N.J.R.E. 403 to exclude otherwise relevant 

evidence. However, our review of the trial record leads us to 

conclude that the preclusion of the value, jobs, and reasons for 

unemployment evidence resulted in a manifest denial of justice.

V.

We also vacate the court's order denying plaintiff's motion 

to amend the complaint to add new parties. The court's decision 

to deny plaintiff's request to amend was largely based on the 

belated nature of the application as it was filed after the initial 
31 A-3756-15T2

summary judgment motion and after the class was certified and 

shortly before the then scheduled trial date. As we have vacated 

both the class certification order and the jury verdict, those 

concerns no longer exist. Accordingly, plaintiff may refile the 

motion to amend on remand. We do not pass on the merits of any 

such application.

Finally, because we have vacated the final judgment, which 

incorporated the jury's verdict and the award of attorney's fees 

under the Act, we need not address plaintiff's challenges to the 

court's fee award.

Affirmed in part, reversed and vacated in part and remanded 

for trial proceedings consistent with this opinion. We do not 

retain jurisdiction.