October 17, 2011 Articles

The Rise of Unfair and Deceptive Trade Practice Act Claims

Because of their enhanced remedies and their often low standards of proof, Unfair and Deceptive Trade Practice Acts have become a battleground in states that have them.

By Michael C. Gilleran

Twenty-three states now have statutes that are modeled on or are similar to the Federal Trade Commission Act (FTC Act). These statutes provide for enhanced remedies and also permit rights of action by business plaintiffs. Because of their enhanced remedies and their often low standards of proof, these statutes—known as unfair and deceptive trade practice acts (UDTPAs)—have become the main battleground of business litigation in states that have them. In short, they are the 800-pound gorilla of business litigation.

Massachusetts was the first state to enact a UDTPA in 1967, where it was known as chapter 93A of the Massachusetts General Laws. Like the FTC Act, chapter 93A prohibited “unfair methods of competition and unfair or deceptive acts or practices.” It also provided that a prevailing plaintiff was not only to be awarded its actual damages, but also its attorney fees. It further provided that if the plaintiff could show that the defendant’s violation of chapter 93A was willful or knowing, then the plaintiff was to receive a mandatory award of at least double and up to treble the amount of actual damages. As initially enacted, chapter 93A only permitted rights of action by consumers and the state attorney general.

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