Opinion ID: 933
Heading Depth: 3
Heading Rank: 4

Heading: Consumer Fraud Claim

Text: Cooper appeals the District Court’s conclusion that Arizona law applies to his consumer fraud claim. We exercise plenary review over a district court’s choice-of-law conclusions. Shuder v. McDonald’s Corp., 859 F.2d 266, 269 (3d Cir. 1988). We apply the choice-of-law rules of the forum state—New Jersey—to determine what law governs Cooper’s consumer fraud claim. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Thabault v. Chait, 541 F.3d 512, 535 (3d Cir. 2008). Under New Jersey law, choice-of-law determinations involve a two-step inquiry. In the first step, a determination is made as to whether or not an actual conflict exists between the substance of the laws of each respective potential forum. Lebegern v. Forman, 471 F.3d 424, 430 (3d Cir. 2006). If no actual conflict is found to exist, “the inquiry is over and, because New Jersey would apply its own law in such a case, a federal court sitting in diversity must do the same.” Id. at 428. If, however, an actual conflict is found to exist, the inquiry proceeds to the second step. At the time of the District Court’s decision, New Jersey used the “governmental interest” analysis for tort claims. In November 2008, the New Jersey Supreme Court 8 adopted the “most significant relationship” test, as found in the Restatement (Second) of Conflict of Laws. P.V. v. Camp Jaycee, 962 A.2d 453 (N.J. 2008).4 This test “embodies all of the elements of the governmental interest test plus a series of other factors deemed worthy of consideration.” Id. at 459 n.4. Under the first step of the analysis, the court must determine whether an actual conflict exists between the laws of the two states. There is no dispute there is an actual conflict between the consumer protection statutes of New Jersey and Arizona. The second step is to weigh the factors in the Restatement corresponding to the plaintiff’s cause of action. Under the Camp Jaycee analysis, our point of departure for the second step of the choice-of-law inquiry is the Restatement (Second) of Conflict of Laws § 148, which addresses fraud and misrepresentation. Fraud and misrepresentation torts are covered in § 148 of the Restatement. Under subsection (1), when the plaintiff’s action in reliance on the defendant’s false representations takes place in the same state where the false representations were made and received, there is a presumption the law of that state applies. Here, though, Samsung’s representations were alleged to have been made in a different state (New Jersey) than they were received and relied upon (Arizona). Thus, 4 P.V. v. Camp Jaycee, which announced a new choice-of-law analysis in New Jersey, had not been filed when the District Court decided its choice-of-law analysis in favor of Arizona. However, in light of the Restatement § 148, we are satisfied that the District Court’s choice-of-law analysis was correct despite the fact that it did not have the benefit of Camp Jaycee. 9 this case is governed by subsection (2), under which the following contacts must be weighed: (a) the place, or places, where the plaintiff acted in reliance upon the defendant’s representations, (b) the place where the plaintiff received the representations, (c) the place where the defendant made the representations, (d) the domicil, residence, nationality, place of incorporation and place of business of the parties, (e) the place where a tangible thing which is the subject of the transaction between the parties was situated at the time, and (f) the place where the plaintiff is to render performance under a contract which he has been induced to enter by the false representations of the defendant. Restatement (Second) of the Conflict of Laws § 148(2). Cooper, who purchased the television in his home state of Arizona, is not entitled to sue under the New Jersey consumer fraud statute. The transaction in question bears no relationship to New Jersey other than the location of Samsung’s headquarters. Cooper’s claim bears the most significant relationship with Arizona, the state in which the television was marketed, purchased, and used.5