The NJSBA is monitoring several key bills that were heard in the Senate Commerce Committee last week.
Consumer contracts:
S3928 (Ruiz) would limit the general application of certain consumer contracts so that a contract for service offered by a company is limited solely to the service offered by the company and purchased by the consumer. It would prohibit provisions that allow or require the contract to govern the circumstances under which the consumer purchases other products or services from the contracting company or affiliate of the company that are not offered pursuant to the contract.
The bill emanates from a lawsuit by Georgia and John McGinty, who were significantly injured in a car crash involving the Uber in which they were passengers. They testified about their attempts to sue Uber, which argued that the arbitration clause included in a separate and unrelated terms-of-service agreement for Uber eats. The Appellate Division overturned a trial court decision ruling in favor of Uber that the terms-of-service agreement signed by the couple’s daughter when she used the company’s separate online food ordering and delivery platform governed the matter and denied the McGinty’s pursuit of damages in the accident.
“We want our day in court. It’s all we asked for. We did not understand until we went through this nightmare what this means in terms of arbitration. And we don’t believe the public understands what this means, which is that you don’t get a jury of your peers. You don’t get other people in the public who care about you and care about the injuries to you and your family. You get an arbitrator who has been selected by the company who harmed you,” said Georgia McGinty. “And that company gets to make the rules in arbitration in terms of what discovery you get, and what information you get, and they get to keep the resolution of your case from being helpful to the resolution of anyone else’s case. That is not fair, that is not just.”
The NJ Civil Justice Institute and NJ Chamber of Commerce oppose the bill. The contentious hearing, chaired by Sen. Joseph Lagana who spoke about his own practice in arbitration, resulted in a number of strong comments about the unfair practice of imposing broad arbitration agreements resulting from “click-throughs” that are rarely read by consumers.
The bill passed unanimously through the Senate Commerce Committee.
LLCs and terminating alternate names:
S3689 (Lagana) would allow a New Jersey Limited Liability Company to terminate an alternate name prior to the expiration date of the five-year registration period, aligning it with the current practice of corporations under the New Jersey Business Corporation Act. The bill passed the Senate Commerce Committee with an amendment to authorize the filing office to require other identifying information on an alternative name termination that the office may specify.
PIP coverage for basic auto insurance policies:
S1473 (Lagana) increases the minimum personal injury protection coverage for basic automobile insurance policies. Lagana, who chairs the Senate Commerce Committee, pointed out that this is the first time the Legislature is addressing this issue and that he is still working with the NJ Department of Banking and Insurance to review fee schedules in order to adjust the minimums to align with current costs.
“The average payout for a person injured in a motor vehicle accident who receives medical treatment receives about $23,000 to 25,000 of treatment on average,” Lagana said . He explained that in reviewing the minimum coverage amounts, the aim of the bill is to ensure there is enough coverage.
The Senate Commerce Committee voted out amendments that would, among other things, revise PIP coverages for basic auto policies from $50,000 to $20,000 and require insurers to inform a named insured that policy limits have increased when the named insured has renewed an insurance policy and exempt insurers from receiving a signed coverage selection form before increasing a policy’s limits.
Sen. Robert Singer cautioned that this bill could lead to even more increases to insurance costs, which he noted have risen recently. Stakeholders who oppose the bill include the NJ Insurance Council, NJ Business and Industry Association, National Association of Mutual Insurance Companies, NJ Chamber of Commerce, and American Property Casualty Insurance Association. Those in favor include CURE Auto Insurance, Atlantic Health Systems, NJ Association of Osteopathic Physicians and Surgeons, NJ Association of Interventional Pain Systems and NJ Association for Justice.