October 4, 2017 / 5:02 PM / 2 years ago

TGI Fridays drink price class action scuttled by N.J. Supreme Court

(Reuters) - New Jersey’s highest court on Wednesday blocked TGI Fridays customers from pursuing a class-action lawsuit claiming that the restaurant chain failed to disclose drink prices on menus.

A dissenting justice called the decision a “major blow” for consumer rights in the state.

The state Supreme Court ruled 5-1 that customers in the 7-1/2-year-old case did not show their claims had enough in common to justify a group lawsuit.

Debra Dugan, one of three named plaintiffs, had complained that a TGI Fridays restaurant charged her $2 for a beer at the bar, but later charged her $3.59 for the same beer at a table.

The plaintiffs said “market research” showed that diners spent $1.72 less per visit when informed about drink prices, and that the practice of privately-held TGI Fridays violated state consumer protection laws.

A trial judge granted class-action status covering company-owned restaurants in New Jersey, but was reversed by a state appeals court, which said the class should have excluded people who bought unpriced drinks without first checking menus.

Upholding that decision, Justice Anne Patterson said it was not enough for the plaintiffs to show merely that drink prices were higher than they might have been.

“A ‘fair’ or ‘reasonable’ price derived from the per-visit expenditures of marketing research subjects is no substitute for proof of the actual claimants’ ascertainable loss and causation,” Patterson wrote.

The plaintiffs were allowed to pursue individual claims.

Justice Barry Albin dissented, saying the decision sanctioned an “unconscionable commercial practice,” and “steepens the path to justice” for consumers with small claims.

“A single consumer does not have the economic wherewithal to litigate against a corporate giant over a $1.72 claim,” Albin wrote. “The majority’s decision is a major blow to consumer rights advanced” under state law.

TGI Fridays said it has over 30 restaurants in New Jersey, and more than 900 restaurants in over 60 countries.

In the same decision, the Supreme Court said Ernest Bozzi and other customers of Bloomin’ Brands Inc restaurants, such as Outback Steakhouse and Carrabba’s Italian Grill could pursue group claims where they were also charged different prices for the same beverages in a single visit.

Dugan’s lawyer was not immediately available for comment. Bozzi’s lawyer, Donald Doherty, said: “My class is more limited, probably affecting a quarter million customers, and we’ll keep pursuing their rights.”

TGI Fridays and Bloomin’ Brands did not immediately respond to requests for comment.

The cases are Dugan et al v TGI Fridays Inc et al, New Jersey Supreme Court, No. A-92-15; and Bozzi v OSI Restaurant Partners LLC et al in the same court, No. A-93-15.

Reporting by Jonathan Stempel in New York, editing by G Crosse

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