New Jersey Supreme Court excludes application of rule relieving plaintiffs who bring premises liability claims against businesses that employ self-service models of the burden of proving actual or constructive notice of a dangerous condition to produce sold in sealed containers.
History of the "Mode of Operation" Rule
Under New Jersey's general premises liability law, a proprietor owes invitees due care under all the circumstances. When an invitee is injured by a dangerous condition on the business owner's premises, the owner is liable for such injuries if the owner had actual or constructive knowledge of the dangerous condition that caused the accident.
Beginning nearly six decades ago, the New Jersey Supreme Court established a burden-shifting framework for business invitees to self-service establishments. The “mode of operation” rule was eventually developed, under which plaintiffs who bring premises liability claims against businesses that employ self-service models do not need to show that the business owner had actual or constructive knowledge of a dangerous condition to establish negligence. The rule is traditionally applied to produce or other goods sold from open bins on a self-service basis where there is the likelihood that some will fall or be dropped to the floors. If the operator chooses to sell in this way, they must do what is reasonably necessary to protect the customer from the risk that mode of operation is likely to generate.
Impacts of New Law
In Jeter v. Sam's Club, 250 N.J. 240 (2022), the New Jersey Supreme Court held that the mode of operation rule does not apply to produce sold in sealed containers. In the case, the plaintiff was walking in an aisle of a Sam's Club wholesale store when she slipped and fell on a grape causing her to sustain personal injuries. Prior to trial, Sam's Club filed a motion to bar the plaintiff from requesting a mode of operation jury instruction. Sam's Club argued that the mode of operation rule did not apply because the store sold grapes in closed, sealed packages to avoid unsafe conditions caused by loose grapes. Thus, Sam's Club asserted that its liability for any unsafe condition caused by customers negligently opening the packages of grapes required actual or constructive notice of the condition and could not be imputed to the store through the mode of operation rule. In opposition, the plaintiff argued that whether the mode of operation rule applied was a question for the jury because the store knew customers were negligently opening the packages of grapes.
The trial judge examined a clamshell grape container in the courtroom and concluded that “the grapes at this store were not sold in loose form,” but rather “were sold in a self-contained . . . plastic package . . . [that] actually has a locking mechanism in it.” The court was thus “persuaded” that the mode of operation rule did not apply because the store “elected to sell grapes, not loosely, but in containers, that will certainly be less of a danger.” The court therefore agreed with Sam's Club and concluded that the mode of operation rule did not apply to the sale of grapes in closed, taped, clamshell containers despite the store's knowledge that customers opened them from time to time. The court found that the plaintiff had no evidence of either actual or constructive notice and entered an order dismissing the case with prejudice.
The plaintiff appealed, and the Appellate Division affirmed the trial court's dismissal. The Supreme Court granted the plaintiff's petition for certification and affirmed the Appellate Division's ruling finding that the mode of operation rule does not apply to the sale of produce in closed clamshell containers. The Supreme Court reasoned that, since customers at Sam's Club were not intended to handle the grapes or package the grapes themselves, but rather were intended only to handle the closed grape containers secured by tape, there was "virtually no chance of spillage during ordinary, permissible customer handling." Thus, there was no "nexus" between the plaintiff's fall on grapes and Sam's Club's self-service sale of grape containers.
This decision is a major victory for both food and non-food retailers. Had the New Jersey Supreme Court expanded the mode of operation rule to include falls due to products dropped by customers from sealed containers, the rule would seemingly apply to almost every product sold by any store or business which provides food products in a sealed container. Moving forward, it is now the law in New Jersey that plaintiffs alleging injuries resulting from falls in retail stores due to products dropped by customers from sealed containers must prove actual or constructive notice of the alleged dangerous condition.
Keith is a Senior Associate in the New Jersey office and regularly defends businesses in premises liability suits in state and federal court. Any questions about this recent New Jersey Supreme Court case, please contact Keith at email@example.com or 551.208.2530.