FDUTPA – Deceptive Trade Practice Class Actions and Reliance

Deceptive Trade Practice Claims

One of the more thorny issues in deciding to bring a consumer class action based on a deceptive trade practice theory is whether the consumer will need to prove that she and others “relied” on a deceptive representation or practice.  The need to show actual “reliance” has historically been a death nil to class actions for damages because proof of reliance would present too many individual issues.

deceptive trade practice 1FDUTPA and Reliance

For decades, Florida courts have found that a consumer is not required to prove the elements of common law fraud–presumably, including reliance—to prove a violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) (Chapter 501, Part II, Florida Statutes).  These cases go back to the 1980’s. The question of “reliance” didn’t expressly enter the picture until later when Florida courts expressly held the reliance is not an element of a deceptive trade practice claim.

Reliance and Causation are Distinct

Defendants however have argued these cases were outliers.  Even courts have criticized this approach because it purportedly ignored what they perceived to be “causation.”  Both views are wrong.  Reliance is distinct from causation.  “The question of whether the plaintiff has received, believed, and acted upon the defendant’s misrepresentation is different from the question of whether that misrepresentation helped to bring about, in some way, an adverse consequence for the plaintiff.” John C.P. Goldberg, Anthony J. Sebok & Benjamin C. Zipursky, The Place of Reliance in Fraud, 48 Ariz. L. Rev. 1001, 1007 (2006).  Recognizing this distinction, United States District Judge Cohn “got it right” when he wrote:

“Upon closer inspection…a deceptive practice can cause a consumer damages even if the consumer does not rely on the deceptive practice when purchasing a particular product. Ostensibly, a deceptive practice allows a manufacturer or vendor to charge a premium for a product that the manufacturer would not be able to command absent the deceptive practice. Thus, even if an individual consumer does not rely on a deceptive practice when deciding to purchase that product, the consumer will have paid more for the product than she otherwise would have. Consequently, the consumer suffers damages.”

Nelson v. Mead Johnson Nutrition Co., 270 F.R.D. 689, 692 (S.D. Fla. 2010)

Our Class Action Attorneys challenge deceptive trade practices through cases brought under FDUTPA, the unfair and deceptive trade practice laws of other states, and other consumer protection laws.

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