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Yesterday, Pennsylvania’s Supreme Court ruled, 4-3, that the Unfair Trade Practices and Consumer Protection Law’s (UTPCPL) prohibition on deceptive conduct creates a private right of action based on strict liability.  Justice Wecht’s majority opinion in Gregg v. Ameriprise Financial, Inc., can be found here.

73 Pa. Stat. Ann. § 201-2 (4)(xxi), the UTPCPL’s catch-all provision, states: “Unfair methods of competition” and “unfair or deceptive acts or practices” mean any one or more of the following: … (xxi) Engaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.” Section 201-9.2(a) gives consumers a private right of action to those harmed by deceptive conduct made unlawful by the catch-all provision.

The issue before the Supreme Court was whether actionable “deceptive conduct” had some sort of intent or due care requirement, or whether this was a strict liability statute.  The majority interpreted the statutory language to create a cause of action solely based on strict liability, regardless of the defendant’s intent.  A private plaintiff still needs to prove that the defendant’s conduct was deceptive and that the plaintiff justifiably relied on that conduct, but the intent or degree of carelessness behind that deceptive conduct, if any, is irrelevant.

The majority states:

The plain language of the current statute imposes liability on commercial vendors who engage in conduct that has the potential to deceive and which creates a likelihood of confusion or misunderstanding. That is all that is required. The legislature required neither carelessness nor intent when a cause of action is premised upon deceptive conduct. Had the General Assembly intended to limit the catch-all provision to cover only common law misrepresentation claims, it would have done so directly by, for example, barring only fraudulent or negligent conduct. By choosing instead to bar “deceptive conduct,” the General Assembly signaled its intent to dispense with consideration of the actor’s mental state.

Accordingly, under the plain meaning of the statute, deceptive conduct during a consumer transaction that creates a likelihood of confusion or misunderstanding and upon which the consumer relies to his or her financial detriment does not depend upon the actor’s state of mind. Liberally construing the CPL as we must, the amended language places the duty of compliance with the CPL on commercial vendors, without regard to their intent. Without a state of mind requirement, the amended catch-all provision fairly may be characterized as a strict liability offense. ….

Justice Todd’s dissent, joined by Justices Saylor and Baer, would have created a negligence standard.  Justice Todd states:

Critically, unlike the majority’s construction, my interpretation gives meaning to all of the words in Section xxi and allows a plaintiff to prevail whenever the vendor either intentionally engages in fraud with respect to a consumer transaction, or whenever the vendor negligently engages in conduct that creates a likelihood of the type of harm that the CPL was intended to prevent – that is, confusion or misunderstanding on the part of a consumer. Stated another way, in my view, a vendor may be liable under Section xxi for deceptive conduct only when he knows, or reasonably should know, that his conduct, be it his actions or statements, is likely to cause misunderstanding or confusion in a consumer regarding the goods or services the vendor is selling. This standard, in my view, effectuates the paramount goal of the CPL — to eliminate unfairness and deception in consumer transactions — by proscribing, in addition to the intentional deception of consumers, conduct which vendors should recognize is likely to deceive reasonable consumers. However, in contrast to the strict liability standard embraced by the majority, this negligence standard also protects honest businesspeople from incurring unforeseen penalties for statements or acts that no consumer would have been confused or misled by.

For those interested in reading the dissent, a copy is provided here.

Date of Decision:  February 17, 2021

Gregg v. Ameriprise Fin., Inc., No. 29 WAP 2019, 2021 WL 607486 (Pa. Feb. 17, 2021)