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Committee releases bill to void class-action waivers in rent-control disputes after tenant testimonies
Summary
The Housing Committee released A3997, a bill that would void lease provisions that waive tenants’ rights to join class actions for rent-control violations. Tenants described how mid-litigation waivers freeze damages and blunt enforcement; opponents warned of retroactivity and federal preemption risks.
The Assembly Housing Committee voted to release Assembly Bill A3997 on Monday, a measure that would render unenforceable lease clauses that waive tenants’ rights to participate as class representatives or members in class actions arising from rent-control violations.
Sponsor Assemblywoman Katie Brennan framed the bill as a response to tenant organizing at Portside Towers in Jersey City, where tenants say landlords have used mid‑case class waivers and lease changes to blunt collective claims. "If there is a bad actor, there should be legal remedies," the sponsor said, describing steep rent increases and algorithm-driven pricing that leave tenants vulnerable.
Tenants and housing advocates offered concrete examples. Kevin Weller, a named plaintiff in a class action against Equity Residential, said his building’s landlord inserted waivers during litigation, freezing the class’s growth and removing ongoing economic pressure that encourages compliance: "The waiver is not a long-standing term of the lease. It's something the landlord added in the middle of a fight in our case."
Advocates and tenant-rights groups argued that individual lawsuits are rarely economically viable for tenants who must bear discovery costs and legal fees against large corporate landlords, and that class mechanisms make treble damages and fee-shifting under the Consumer Fraud Act an effective deterrent.
Opponents, including Elyssa Frank of the New Jersey Civil Justice Institute and industry witnesses such as Jeff Kulikowski of the New Jersey Builders Association and representatives of apartment-owner groups, warned the bill’s retroactive application could expand liability, destabilize settled contracts and invite costly litigation. Witnesses also flagged possible Federal Arbitration Act preemption where class-waiver language is intertwined with arbitration agreements and cited New Jersey Supreme Court precedent in PACE v. Hamilton Cove as a key legal touchstone.
Committee members discussed carve-outs and drafting choices, including removing retroactivity or clarifying that the bill targets stand-alone class waivers rather than waivers tied to arbitration. After extended discussion and testimony, the committee voted to release the bill for further consideration.
Next steps: A3997 proceeds out of committee; sponsors and stakeholders indicated willingness to work on amendments addressing retroactivity and arbitration issues.
