FDUTPA Turns Courtrooms Into Venues Where Businesses Can Police the Marketplace
In the beginning, Moses said, "thou shalt not steal and thou shalt not lie." Shortly thereafter, lawyers came along and said, "He didn't say anything about not doing both at the same time."
March 18, 2020 at 09:34 AM
5 minute read
In the beginning, Moses said, "thou shalt not steal and thou shalt not lie." Shortly thereafter, lawyers came along and said, "He didn't say anything about not doing both at the same time."
Thus was created the basis for consumer protection law, and all the defenses that have been raised for it.
Some people believe consumer protection lawsuits are generally aimed at deceptive advertising, and are generally brought by consumers or such agencies as the Federal Trade Commission. But UDAP (Unfair or Deceptive Acts or Practices) laws can also offer businesses the ability to go after parties who lie and steal.
Florida's UDAP law, known as FDUTPA (Florida Deceptive and Unfair Trade Practices Act), allows businesses to use consumer protection statutes in a business-to-business setting.
For centuries, it was accepted that, for the crime of theft to occur, something must have been forcefully taken. Caveat emptor meant a person who had been deceived into parting with money was left without recourse. The victim was expected to exercise a high level of due diligence—in essence, you are on your own. If you got burned, well, too bad.
But in 1757, King George II enacted the first statute in common law to prohibit theft by false pretenses.
Oddly enough, this change in the common law had more than a little to do with the invention of the printing press.
Think of it this way: Today, we see fraud and theft flourishing on the internet and through social media. Cyberspace makes it easier to reach people, and that ease of access benefits people with bad intentions, too.
In a way, the printing press was the internet of its day. Suddenly, it became easy to print handbills and other items and distribute them to large numbers of people. That improved outreach wasn't lost on people who had evil intentions.
Not only did printing make fraudulent activity easier, but it also created evidence. Earlier, when property was obtained by fraudulent statements it was little more than a he said/she said contest. The invention of the printing press also created the invention of the paper trail.
The next great move forward in the area of lying and stealing came about in 1914, when the U.S. Congress created the Federal Trade Commission Act (FTCA). That act prohibited unfair and deceptive business practices. The FTCA limits enforcement to the Federal Trade Commission.
In the next 50 years, many states felt a need to create state versions of the FTCA. These state initiatives have come to be known as Little FTC Acts.
The details of these state statutes vary. Most authorize state attorneys general to bring suit; many allow individuals to bring lawsuits, as well.
Florida's law, FDUTPA, has some important variations. For example, FDUTPA is not limited to consumers bringing an action; the statute allows persons who have been injured or aggrieved to bring an action.
While FDUTPA had originally limited actions to consumers, the Florida Legislature eventually broadened its scope to encompass businesses or consumers who meet the standards of having been aggrieved or injured.
Any FDUTPA action must have some sort of consumer element to it. A simple breach of contract will not suffice. A consumer interest, such as the potential for a competitor's activity to harm consumers or injure them in some way, is required. At its core, there must be some sort of public interest factor in addition to the specific plaintiff complaint.
Persons who have been injured under FDUTPA may receive monetary relief. The person must have been monetarily impacted by the unfair or deceptive conduct.
However, an "aggrieved" person need not prove monetary damages. There must be a close nexus between the alleged unlawful conduct and the person bringing the claim. Since there is no requirement for damages, there is no ability to obtain monetary relief, although a party can obtain injunctive relief.
While injunctive relief alone may not seem like much, when combined with the potential recovery of attorneys' fees, a FDUTPA action can prove an attractive option in cases where a competitor's conduct is unlawful, harmful to consumers, and needs to be stopped.
An interesting variation on this idea of injunctive relief comes into play when considering the role of trade associations or non-governmental organizations. Organizations may establish injury by showing that unlawful activity created a drain on resources.
In the Supreme Court case, Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982), the court held that an organization dedicated to fighting discrimination in housing had the ability to sue a landlord who was alleged to have discriminated on the basis of race.
The court held that the landlord's unlawful discriminatory practices may create a drain on the resources of an organization, thus creating harm and, therefore, standing.
Laws such as FDUTPA help turn courtrooms into venues where honest businesses and organizations can help police the marketplace and bring to heel those who have lied, those who have stolen, and those who have done both at the same time.
Richard Lawson is a partner with Gardner Brewer Martinez-Monfort in Tampa and previously served as director of the Consumer Protection Division of the Florida attorney general's office.
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