The case of McLaren v. UPS Store, Inc., No. 21-14424 (RMB/MJS), 2025 U.S. Dist. LEXIS 228406 (D.N.J. Nov. 20, 2025) centers on allegations that The UPS Store, Inc. (TUPSS) and certain of its New Jersey franchisees systematically overcharged consumers for notary services, in violation of New Jersey law capping notary fees. Plaintiffs Barbara McLaren and Vincent Tripicchio, representing themselves and a putative class, claimed that for over a decade, TUPSS and its franchisees charged notary fees exceeding the statutory maximum, thereby violating the New Jersey Consumer Fraud Act (CFA), the Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA), and principles of unjust enrichment. The plaintiffs sought relief for themselves and similarly situated consumers.
The facts established that New Jersey law, specifically N.J. Stat. Ann. § 22A:4-14, set a maximum fee of $2.50 for certain notarial acts. Despite this, McLaren was charged $10 for two acknowledgments (instead of $5), and Tripicchio was charged $15 for a power of attorney notarization (including a $12.50 “Notary Convenience” fee), both at TUPSS franchise locations. The franchisees provided no additional services beyond the notarial act itself.
TUPSS operated through a network of franchisees, requiring them to execute a Franchise Agreement and adhere to an Operations Manual. The agreement mandated compliance with all applicable laws, including those governing notary fees, and required franchisees to offer notary services, maintain certain staffing levels, and use a uniform point-of-sale system. TUPSS also provided extensive training, issued directives on notary pricing, and closely monitored franchisee operations, including notary transactions and revenues. TUPSS collected royalties and marketing fees based on store revenues, including those from notary services, and sometimes directly addressed customer complaints about overcharges, even issuing refunds.
The defendants moved to dismiss, arguing that the plaintiffs failed to state viable claims, that TUPSS as franchisor was not vicariously liable for franchisee conduct due to lack of day-to-day control, and that class allegations should be struck. The court addressed each claim in turn.
On the CFA claim, the court found that the plaintiffs had pled with sufficient particularity under Rule 9(b), detailing the who, what, when, where, and how of the alleged overcharges. The court reasoned that overcharging for notary services in violation of a statute could constitute an “unconscionable commercial practice” under the CFA, even if the statute was not enacted under the CFA itself. The court analogized to cases where overcharging in violation of rent control ordinances supported CFA liability, emphasizing that notaries are public officers with duties to the public, and that the statutory cap on fees serves a public benefit. The court concluded that the plaintiffs plausibly alleged unlawful conduct, ascertainable loss, and causation, and thus denied the motion to dismiss the CFA claim.
Regarding the TCCWNA claim, the court dismissed it, finding that the plaintiffs failed to allege the required “writing” (such as a contract, notice, or sign) containing a provision that violated a clearly established legal right. Receipts for the notary transactions were deemed insufficient to meet this requirement.
On the unjust enrichment claim, the court held that, while unjust enrichment is not an independent tort in New Jersey, it may be available outside the quasi-contractual context, including where a party overcharges for services beyond what the law allows. The court found that the plaintiffs had plausibly alleged that defendants were unjustly enriched by retaining fees in excess of the statutory maximum, and that it was too early to apply the voluntary payment rule, as the complaint did not establish that the payments were truly voluntary or made without mistake of fact.
The court also addressed the issue of vicarious liability. It explained that a franchisor may be held vicariously liable for a franchisee’s conduct if the franchisor has the right to control the day-to-day operations of the franchisee, particularly as to the instrumentality at issue. The court found that TUPSS exercised more direct involvement than typical, mandating notary services, controlling staffing, marketing, training, and pricing, monitoring transactions, and collecting a share of notary revenues. TUPSS also had the contractual right to terminate franchisees for overcharging but did not do so. These facts supported a plausible inference of an agency relationship and the right to control, sufficient to survive a motion to dismiss on vicarious liability grounds.
On the civil conspiracy claim, the court found that the plaintiffs had alleged sufficient facts to infer an agreement between TUPSS and its franchisees to overcharge for notary services, noting that direct evidence of conspiracy is rarely available and circumstantial evidence may suffice. The court held that the conspiracy claim could proceed, as the underlying CFA claim was viable.
The court denied the motion to strike class allegations, finding it premature to do so at the pleading stage, as class certification issues are better addressed after discovery.
In conclusion, the court granted the motion to dismiss only as to the TCCWNA claim, allowing the CFA, unjust enrichment, and civil conspiracy claims to proceed, and denied the motion to strike class allegations.
The policies and goals underlying the court’s reasoning reflect a strong commitment to consumer protection and the enforcement of statutory limits designed to prevent abuse by those providing essential public services. By holding that overcharging for notary services can constitute an unconscionable commercial practice under the CFA, the court reinforced the principle that statutory caps serve a public benefit and that those who act as public officers must adhere strictly to the law. The court’s willingness to consider vicarious liability for franchisors who exercise significant control over franchisee operations signals that franchisors cannot insulate themselves from liability simply by structuring their businesses as franchises, especially when they direct, monitor, and profit from the very conduct at issue.
This decision is potentially unfavorable for both franchisees and franchisors. For franchisees, it underscores the risk of liability for statutory violations, even when acting under the direction or with the knowledge of their franchisor. For franchisors, the decision demonstrates that significant operational control, especially over pricing and compliance with law, may expose them to vicarious liability for franchisee conduct or misconduct. The court’s approach may encourage franchisors to exercise greater oversight to ensure compliance with applicable laws, but it also increases franchsiors’ potential exposure to class action litigation and damages arising from the acts of their franchisees. While this enhances consumer protection, it may increase compliance costs and legal risks for franchise systems.
