In Gregg v. Ameriprise Financial, Inc., the Pennsylvania Supreme Court, upheld the ruling of the Superior Court and decided that the catchall provision of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) imposes strict liability on businesses, so the consumer need not establish that the business was negligent or acted intentionally. The majority ruled that any deceptive conduct creating a likelihood of confusion or misunderstanding to the consumer gives rise to liability under this section. Plaintiff need not prove the elements of common law fraud or negligent misrepresentation. The opinion was written by Justice Wecht, joined by Justices Donohue, Dougherty and Mundy. Justice Todd penned a dissenting opinion, joined by Chief Justice Saylor and Justice Baer.
The decision will likely have a wide-ranging impact on the legal landscape in this area of the law and will affect businesses across every industry. This could lead to a substantial increase in the number of consumer protection lawsuits filed against vendors across the Commonwealth. Although a Plaintiff need not prove the elements of common law fraud or negligent misrepresentation, claimants must still show justifiable reliance and a causal relationship between the purported conduct and the alleged damages.
This Supreme Court opinion builds on the opinion from the Superior Court, which was based on its prior ruling in Bennett v. A.T. Masterpiece Homes, 40 A.3d 145 (Pa. Super. 2012). In the Bennett case, relying on the statutory language, the Superior Court interpreted the legislative intent of including the term “deceptive conduct” in the 1996 amendment to the provision and determined that a consumer is not required to prove the business acted with the intent to defraud in claims arising under the catchall provision. However, in the Bennett case, the Superior Court did not address the issue of the level of culpability that the consumer would have to prove in order to succeed under that provision.
In the Gregg case, the Superior Court expanded the Bennett ruling and established a strict liability standard and provided that the consumer need only prove that the business’ conduct “has the tendency or capacity to deceive.” In reaching its conclusion, the Superior Court reasoned (similarly to its logic in Bennett) that if the legislature intended to limit the catch-all provision to negligent misrepresentation claims, it could have limited the language of the statute to “fraudulent or negligent conduct” rather than the more broadly defined “any…deceptive conduct.”
The Supreme Court expanded on the Superior Court’s reasoning and found that the addition of “deceptive” in the 1996 amendment to the type of conduct barred by the catchall provision indicated the legislative intent to expand the provision beyond the requirements for fraudulent conduct. In making this determination, the Court relied not only on the reasoning established by the Superior Court, but also on the extensive case law interpreting the word “deceptive conduct” in other statutory provisions akin to the UTPCPL, such as the Federal Trade Commission Act and the Lanham Act. Specifically, the Court looked at the long history of case law interpreting the definition of “deceptive conduct” in those statutes, as “having the capacity to deceive” rather than being premised on intent, and determined that the legislature must have been aware of that history when it decided to add the term “deceptive conduct” to the catchall provision in the 1996 amendment. The Court found the absence of a state of mind requirement in the catchall provision as determinative of the legislative intent to exclude it, because other provisions of the UTPCPL explicitly contain such a requirement.
In its reasoning, the Court also looked at its own recent precedent in Commonwealth by Shapiro v. Golden Gate National Senior Care, LLC, 194 A.3d 1010, 1023 (Pa. 2018), where it held that the deceptive conduct includes an act or practice that has “the capacity or tendency to deceive” without regard to the actor’s intent to deceive or an actual deception. The Court ruled that this is a lesser or more relaxed standard than that which is required for fraudulent or negligent misrepresentation; all that is required is for the acts or practices to be capable of being interpreted in a misleading way. Thus, without a state of mind requirement, the Supreme Court finds that liability under the catchall provision may fairly be characterized as a strict liability offense.