For all Americans, the beginning of June brings with it the lifting of stay-at-home orders and the reopening of the economies of every state. Yet, many experts warn that it could be months or even years before everyday life returns to normal. While the “new” American way of life is uncertain at best, recent trends in litigation provide some insight into the types of claims that are likely to arise out of the COVID-19 pandemic. One trend highlights an emergence in litigation involving consumer protection statutes and COVID-19.
Unfair and Deceptive Acts and Practices (UDAP) statues exist in all fifty states and the District of Columbia to protect consumers from unfair, deceptive, predatory and unscrupulous business practices. However, there exists little uniformity among UDAP statues. Some states such as Massachusetts provide for liberal coverage, extensive damages, and attorneys’ fees. Other states, such as Rhode Island, exempt most lenders and creditors from UDAP coverage. By way of example, Massachusetts’ UDAP statute, known as “Chapter 93A” broadly prohibits “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Chapter 93A Section 9 provides for a private right of action for a claimant who is a consumer and Chapter 93A Section 11 provides for a private cause of action for an entity engaged in trade or commerce. The Massachusetts UDAP statute provides for actual damages, multiple damages for knowing or willful violations, and attorneys’ fees to a prevailing claimant.
In comparison, California has two UDAP statutes. First, California’s Unfair Competition Law, prohibits any unlawful, unfair or fraudulent business practice, as well as depictive or misleading advertising. Though the Unfair Competition Law does not exempt particular businesses, consumers may not seek damages or multiple damages and are limited to restitution. Private causes of action under California’s Unfair Competition Law are also limited to consumers who have “lost money or property.” California’s other UDAP statute is the Consumers Legal Remedies Act, California Code sections 1750-1784. The Consumer Legal Remedies Act applies to consumer transactions involving the “sale or lease of goods or services.”
In addition to general provisions that prohibit unfair or deceptive acts, many UDAP statues give the attorney general or a state agency authority to adopt rules and regulations to enforce the act. For example, Massachusetts’ Chapter 93A provides that “[t]he attorney general may make rules and regulations interpreting the provisions of subsection 2(a) of this chapter.” As such, on March 20, 2020, Massachusetts Attorney General Maura Healey announced an emergency regulation banning price gouging of essential products and services in light of the COVID-19 pandemic. Attorney General Healey’s amendment sought to supplement Massachusetts’s Chapter 93A statute, which previously regulated only the sale of gasoline and petroleum. The amendment now prohibits price gouging of all essential goods necessary to prevent the spread of the pandemic (e.g., masks, soap and hand sanitizer). By contrast, California’s Unfair Competition Law does not provide a
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