Court Opinion

ID: 9754907
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:18:04.48063+00
Date Added: 2024-06-11T07:28:00.649476
License: Public Domain

Passman, J.,
concurring. I fully subscribe to the cogent analysis of Justice Sullivan and join his opinion for the Court. I agree that the alleged fraudulent conduct of the defendant utility, which is the gravamen of plaintiff’s complaint, does not constitute fraud “in connection with *274the sale” of merchandise within the meaning of the applicable provision of the Consumer Fraud Act, L. 1967, c. 301, N. J. S. A. 56 :8-l et seq.
I write separately to note that a regulated utility may nevertheless be covered by that Act when it engages in commercial activity not governed by the comprehensive scheme of PUO rate regulation.
A public utility plainly qualifies as a “person” as that term is defined in the Act. See N. J. S. A. 56:8-l(d). There .is no valid reason why a utility, simply by reason of the fact that it is subject to regulation of its rates in the public interest, should be exempt from the Act if it should commit fraud in connection with the marketing of merchandise. To take a currently obvious example, the telephone company’s persistent efforts to convince consumers to purchase “personalized,” custom-designed phones are no different from the attempts of any other manufacturer to effectively advertise and sell its products. Suppliers of fuel will often sell related equipment, such as oil burners, fuel tanks or gas and electric ranges in connection with their regulated activity. Conduct of this type should not be exempt from N. J. S. A. 56:8-2 merely because of the fortuitous circumstance that the vendor involved is a utility subject to PUC regulation on unrelated matters. If a utility engages in practices of the type proscribed by the Consumer Fraud Act, N. J. S. A. 56 :8 — 2, it should be subject to the same penalties as any other vendor.
Our decision today holds only that alleged fraud in the clearly rate-related activity of a regulated utility is not remediable under the Consumer Fraud Act. The application of N. J. S. A. 56:8-2 to such activity was not within the legislative contemplation and adequate relief is available from the PUC in the event fraudulent conduct by the utility is proven. Utilities which venture beyond the sphere of PUC regulation and into the consumer marketplace must comply with the proscriptions of the Consumer Fraud Act or face liability thereunder.
*275As the Court notes, utility customers victimized by a utility’s fraudulent rate practices may obtain redress from the PUC. In fashioning an appropriate remedy for such illegal conduct, the PUC is empowered, and indeed obligated, to award complete relief to the entire class of persons who were improperly charged excessive rates. The most suitable remedy in such a case would be a mandatory rate reduction for all customers of the utility for the period of time necessary to ensure that all of its illegal profits will be disgorged. Such “fluid” class relief has been employed in other instances where class-wide injury has been suffered and its use in an administrative forum is equally appropriate. See Bebchick v. Public Utilities Commission, 115 U. S. App. D. C. 216, 232, 318 F. 2d 187, 203-04 (D. C. Cir. 1963), cert. den. 373 U. S. 913, 83 S. Ct. 1304, 10 L. Ed. 2d 414 (1963); Mountain States Tel. Co. v. Public Utilities Commission, 180 Colo. 74, 502 P. 2d 945, 949 (Sup. Ct. 1972); see also Blue Chip Stamps v. Superior Ct., 18 Cal. 3d 381, 134 Cal. Rptr. 393, 556 P. 2d 755 (1976) (Tobriner, J., concurring).
Finally, I find that N. J. S. A. 56:8 — 19 not only sanctions but requires the award of treble damages to a successful plaintiff in an action under the Consumer Fraud Act. The statutory language involved, like that used in the analogous provision of the New Jersey Antitrust Act, L. 1970, c. 73, N. J. S. A. 56:9-12, clearly speaks in the imperative. I believe that the deterrent and punitive purposes of the Act would be substantially undermined by any judicial impairment of its primary weapon against those who engage in consumer fraud.
Pashman, J., concurring in the result.
For reversal — Chief Justice Hughes, Justices Sullivan, Pashman, Clieeobd and Handler and Judge Coneoed — 6.
For affirmance — -None.