Lawmakers say companies should not be able to use “opaque” terms and conditions to avoid legal battles with their customers. (Hal Brown for New Jersey Monitor)
A state Senate panel unanimously advanced a bill Monday that would place restrictions on contracts private companies enter into with their customers, legislation the bill’s sponsors said would limit “deceptive” practices that cause people to unwittingly sign away their rights.
The measure was inspired in part by the plight of Georgia and John McGinty, who were in a serious car crash while riding in an Uber in March 2022. A state appellate court ruled in October that the Princeton couple’s lawsuit against Uber cannot be heard by a jury because they agreed to the ride-hail giant’s terms and conditions, which include an arbitration provision requiring most disputes to be handled privately.
The McGintys, who were left with serious injuries, including spine and rib fractures, have said their 12-year-old daughter is the one who agreed to Uber’s terms and conditions when she used Uber Eats to order a pizza months before the crash.
“The ordering of a pizza should not waive your right to a trial if you are injured in a personal injury suit in a car accident months later,” Georgia McGinty told lawmakers on the Senate Commerce Committee Monday.
The McGintys told senators on the panel about their drawn-out legal challenges against Uber, which they engaged in while recovering from their injuries and facing financial challenges. They said they didn’t understand what arbitration really meant until they “went through this nightmare.”
The bill approved by the committee would limit consumer contracts solely to the service offered by the company and purchased by the consumer. Bill sponsor Senate President Nicholas Scutari (D-Union) said in a statement it would stop companies from engaging in some “deceptive” practices.
“Ambiguous, all-encompassing consumer contracts put customers at risk and could leave them with no protections when seeking assistance for service problems,” he said.
Alex Daniel of the New Jersey Civil Institute argued against the bill Monday, suggesting that it would limit arbitration. He also said the legislation could be struck down by a court under the Constitution’s supremacy clause, which says that federal laws take precedence over state laws.
That struck a nerve with some senators who admitted they don’t read the terms and conditions of every app they use. Sen. Joe Cryan said he found Daniel’s argument “repulsive.”
“Are you saying that states should just sit by when someone signs off on a terms and conditions through a 12-year-old to get an Uber Eats delivery — their family is destroyed, critically injured, and goes through all that, and are you saying based on the supremacy clause we’re all just supposed to sit here and say, ‘Oh well, too bad?’” said Cryan (D-Union).
Sen. Jon Bramnick (R-Union) pressed Daniel if any of the institute’s clients are insurance companies (Daniel said he’d have to check). Bramnick said he wants to make sure that when people sign up for services like Uber, they don’t release all their rights to a third-party arbiter.
“I heard your answers. I think it’s cold and calculated,” said Bramnick.
Adam Letterman, president of the New Jersey Association for Justice, supports the bill. Terms of services are increasingly opaque, and this bill would “right the wrong that if you contract with one arm of a company, it won’t apply” to other services provided by the company.
He added that the McGinty’s case brought this legislation to the Legislature’s doorstep, and he called passing the bill a “common sense” solution to protecting New Jersey consumers.
The McGintys are hoping to take their case to the state Supreme Court, and also help educate the public on how arbitration can hurt their legal challenges against powerful companies with a mountain of resources.
“We really are in a very slippery time where everything now, all these apps have these click-throughs that people are not reading, they’re not looking at,” Georgia McGinty said. “And it’s becoming a very slippery slope and we need to start protecting the consumer.”
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