AN OVERVIEW OF FLORIDA’S DECEPTIVE AND UNFAIR TRADE PRACTICES ACT
Part three of a three-part series
This post is Part Three of a Three-Part Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) feature. Part One discussed who FDUTPA protects and why it is needed. Part Two discussed what conduct is actionable under FDUTPA. Part Three will discuss the necessary elements for a prima facia case under FDUTPA and the remedies available.
Often, the damage caused by unfair and deceptive trade practices extends well beyond what is recoverable under FDUTPA, even though the consequences can be devastating. Consumers should be able to trust that commercial transactions are legitimate, and that they received truthful information about the service or product they sought to acquire. However, this is not always the case and therefore, the legislature has decided that consumers need added protection from unscrupulous practices. While FDUTPA offers broad protection from unfair and deceptive acts, it offers relatively limited options in terms of the remedies an individual can claim. The main issue with obtaining a remedy under FDUTPA is that the Act only applies to actual damages, meaning that any additional damages resulting from the unfair or deceptive trade practice are not recoverable. This often shoulders financial responsibility on consumers who were deceived or treated unfairly. This post provides guidance on establishing a prima facie case under FDUTPA and what remedies are available.
Establishing a Claim Under FDUTPA:
Once a consumer believes they have fallen victim to a deceptive or unfair trade practice, a consumer may bring a claim under FDUTPA. In order for a consumer to claim damages under FDUTPA, they must prove three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages. Rollins, Inc. v. Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006). A plaintiff must not only prove that the conduct complained of was unfair, unconscionable, or deceptive, but also that it suffered actual damages, proximately caused by the unlawful conduct. In re Florida Cement and Concrete Antitrust Litigation, 746 F. Supp. 2d 1291, 1321 (S.D. Fla. 2010). Alternatively, if a consumer is seeking injunctive relief, instead of damages, the consumer is not required to prove the deceptive act or unfair practice caused a loss. Fla. Stat. § 501.211(1); see also Kelly v. Palmer, Reifler, & Assocs., P.A., 681 F. Supp. 2d 1356, 1365-66 (S.D. Fla. 2010). Additionally, consumers cannot wait too long to bring a claim under FDUTPA, as such claims are subject to a four-year statute of limitations. Fla. Stat. § 95.11(3)(f).
Standing Under FDUPTA
Part One of this series briefly discussed who FDUPTA protects. However, courts have not been consistent when interpreting who may bring a claim under FDUPTA. For example, some courts have held that FDUPTA only extends to persons who were deceived when buying or selling goods or services. See, e.g., Kertesz v. Net Transactions, Ltd., 635 F. Supp. 2d 1339, 1348-50 (S.D. Fla. 2009) (holding a plaintiff did not have standing to sue a company that posted inappropriate photos of her without her consent because the plaintiff was not engaged in a market transaction). By contrast, some courts have held that FDUPTA extends to any person injured by a deceptive act or unfair practice, regardless of whether goods or services were bought or sold. See, e.g., Furmanite Am., Inc. v. T.D. Williamson, Inc., 506 F. Supp. 2d 1134, 1145-47 (M.D. Fla. 2007). Indeed, a broad interpretation of those who have standing has found support at the Eleventh Circuit, as the term “person” has been construed liberally to include government bodies. See Democratic Republic of the Congo v. Air Capital Grp., LLC, 614 Fed. Appx. 460, 469 (11th Cir. 2015).
Deceptive Act or Unfair Practice
Part Two of this series discussed conduct that constitutes a deceptive act or unfair practice. For example, in a case dealing with infant formulas, the plaintiff’s FDUTPA motion for class certification was granted when the defendant deceptively led the consuming public to believe that its formulas provided infants with something that other infant formulas did not. Nelson v. Mead Johnson Nutrition Co., 270 F.R.D. 689, 695 (S.D. Fla. 2010). In that case, the plaintiff received informational fliers and coupons that contained representations that the defendant’s infant formula was “clinically proven” to have something that other infant formulas did not. Id. This was a very clear example in which misleading advertisements qualified as a deceptive practice under FDUTPA. Additionally, as discussed in Part Two of this series, the placement of a GPS tracking device on vehicles without the consent of consumers purchased at a car dealership and for practices leading consumers to believe that they would get their deposits back if they did not buy the vehicles constituted unfair and deceptive acts under FDUTPA. State v. Beach Blvd Automotive, Inc., 139 So. 3d 380, 390 (Fla. 1st DCA 2014). Also, it is likely to mislead a consumer when a reservation form unequivocally represents that the consumer will be given the opportunity to purchase a particular lot or unit at a firm price. Fendrich v. RBF, L.L.C., 842 So. 2d 1076, 1080 (Fla. 4th DCA 2003). When it is likely that a consumer will be misled, this usually satisfies the first element of Rollins v. Butland.
FDUTPA was enacted to provide remedies for conduct outside the reach of traditional common law torts such as fraud; therefore, a plaintiff need not prove the elements of fraud to sustain an action under the Act. State, Office of Attorney General, Dept. of Legal Affairs v. Tenet Healthcare Corp., 420 F. Supp. 2d 1288, 1310 (S.D. Fla. 2005). As such, no proof of subjective reliance is necessary. Instead, the plaintiff must only establish that the defendant’s conduct would likely “mislead the [objective] consumer acting reasonably in the circumstances.” See PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773, 777 (Fla. 2003).
Courts have been inconsistent for establishing causation on a class-wide basis, and the Florida Supreme Court has not yet addressed this point. On the one hand, some courts have required the plaintiffs present individualized proof that each plaintiff relied on the defendant’s unfair or deceptive conduct. See, e.g., In re Sears, Roebuck & Co. Tools Mktg. & Sales Practices Litig., 2012 U.S. Dist. LEXIS 39561, at *9 (N.D. Ill. Mar. 22, 2012). On the other hand, the Eleventh Circuit held that plaintiffs do not need to prove that each potential class member was actually harmed by the defendant’s conduct. See Zlotnick v. Premier Sales Grp., Inc., 480 F.3d 1281, 1284 (11th Cir. 2007). Instead, plaintiffs must only prove that a reasonable consumer would have been harmed by the defendant’s conduct. Id.
FDUTPA claims often fail under the third element of the Rollins standard: actual damages. For example, a claim fails where a plaintiff has only sought consequential damages, such as repair damages or resale damages, or when a plaintiff has not demonstrated that she developed nor could develop a reasonable methodology for generalized proof of the damages that are arguably recoverable under FDUTPA. Kia Motors America Corp. v. Butler, 985 So. 2d 1133, 1140 (Fla. 3d DCA 2008). By contrast, for example, where the plaintiff relied on Chrysler’s advertising of its vehicles as safe and in compliance with all relevant safety standards, the plaintiff’s amended complaint was entitled to go further when it alleged a car with a defective seatbelt was worth less than a car with an operational seatbelt. Collins v. DaimlerChrysler Corp., 894 So. 2d 988, 991 (Fla. 5th DCA 2004). Thus, the importance of pleading actual damages accurately in a FDUTPA claim is paramount.
Additionally, a FDUTPA claim cannot be stated based upon oral representations which are in contradiction of the written terms of a contract because the reliance on such representations is unreasonable as a matter of law. Dorestin v. Hollywood Imports, Inc., 45 So. 3d 819, 825 (Fla. 4th DCA 2010). When a plaintiff fails to allege a recoverable loss, the complaint fails to state a cause of action under FDUTPA. For example, where a plaintiff improperly sought consequential damages in her FDUTPA claim, rather than actual damages in relation to the value of the car she purchased, dismissal with prejudice was proper. The actual damages requirement of FDUTPA forces plaintiffs to narrowly plead for damages. Smith v. 2001 South Dixie Highway, Inc., 872 So. 2d 992, 994 (Fla. 4th DCA 2004). Pleading for any damages other than actual damages is often the crux of failed FDUTPA claims.
Available Remedies Under FDUTPA
After the plaintiff has established that a deceptive act or unfair practice occurred, and that the deceptive act or unfair practice caused the alleged injury, the plaintiff must establish that actual damages resulted. In general, actual damages is the difference between a good’s or service’s value under the contract and the market value of the good or service delivered. See Democratic Republic of the Congo v. Air Capital Grp., LLC, 614 Fed. Appx. 460, 471 (11th Cir. 2015). This generally requires the plaintiff prove the gap in value between what was promised and what was delivered. However, there is an exception if the defendant delivered a good or service that was worthless. See, e.g., Rollins, Inc. v. Heller, 454 So. 2d 580, 585 (Fla. 3d DCA 1984). Specifically, when the product is rendered valueless as a result of the defect, the purchase price is the appropriate measure of actual damages. Id.
For example, in Rodriguez, shortly after a boat the plaintiff purchased from the defendant sank, the plaintiff was only entitled to recover the difference in the fair market value of the boat delivered and the fair market value as it should have been delivered, rather than the “down payment, payments on the loan, interest, [as well as the] balance on the loan.” Rodriguez v. Recovery Performance & Marine, LLC, 38 So. 3d 178, 179 (Fla. 3d DCA 2010). By contrast, in Tri-County Plumbing Services, the plaintiff was entitled to recover the full deposit paid to the defendant after the plaintiff hired the defendant to fix her plumbing, but walked off the job even though the repairs failed inspection. Tri-County Plumbing Services, Inc. v. Brown, 921 So. 2d 20, 21 (Fla. 3d DCA 2006).
Additionally, in any individual action brought by a consumer who has suffered a loss as a result of a violation of this part, such consumer may recover actual damages, plus attorney’s fees and court costs. Fla. Stat. § 501.2105.The amount an individual can recover in a civil penalty under a FDUTPA action is not more than $10,000 for each such violation. Fla. Stat. § 501.2075.
However, under FDUTPA, remedies are limited to the recovery of damages related to the property that was the subject of consumer protection. Even if additional damages resulted from the deceptive act or unfair practice, the plaintiff will not be able to recover those additional damages. For example, a company which installs and services burglar alarms does not assume the responsibility of insuring all items intended to be protected by the system. In short, actual damages do not include special or consequential damages. Rollins, Inc. v. Heller, 454 So. 2d 580, 584 (Fla. 3d DCA 1984). Further, “FDUTPA does not provide for the recovery of nominal damages, speculative losses, or compensation for subjective feelings of disappointment.” City First Mortg. Corp. v. Barton, 988 So. 2d 82, 86 (Fla. 4th DCA 2008) (quoting Rollins, Inc. v. Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006)). Therefore, by narrowly pleading actual damages, a plaintiff will be more likely to succeed on a FDUTPA claim.
Urling v. Helms Exterminators, Inc. illustrates this point further. In Urling, the plaintiff could not recover damages to cover the cost of repairing extensive termite damage to the structure of a house they purchased after receiving and relying on a false termite inspection certificate issued by the defendant. Urling v. Helms Exterminators, Inc., 468 So. 2d 451, 454. The cost of repairing the structural damage to the house fell outside FDUTPA’s actual damages and therefore, the plaintiff had not claimed recoverable damages under the Act. Id. Had the plaintiff in Urling pled the actual damages of the false inspection, as opposed to the damages that resulted from the false inspection, the plaintiff could have made a claim for actual damages under FDUTPA.
Additionally, as previously mentioned, if a consumer is seeking injunctive relief, instead of damages, the plaintiff is not required to prove the deceptive act or unfair practice caused a loss. Fla. Stat. § 501.211(1). This alternative remedy places a lighter burden on the plaintiff, but still allows the plaintiff to stop the defendant’s unfair act or deceptive practice.
While consumers are expected to exercise a degree of reasonableness in their dealings, deceptive acts and unfair trade practices can devastate a business responding to frivolous claims. FDUTPA protects consumers from unfair and deceptive trade practices that cause an injury resulting in actual damages. However, FDUTPA only offers remedies to the initial subject of consumer protection. If any additional damages result because of the subject of consumer protection, those damages are not covered under FDUTPA. Civil penalties and the attorney’s fee hook are the big “x-factors” in FDUTPA litigation.