Massachusetts Consumer Protection Law

Permits a cause of action by any person injured by another person's use of employment of any unfair or deceptive acts or practices in the conduct of any trade or commerce.

Exception: a different standard applies to a businessperson (i.e., not a consumer)

1. real estate broker's duty to disclose to a prospective buyer any fact known to the broker that may influence the buyer not to enter into the transaction

2. manufacture and sale of motor vehicles

3. landlord/tenant matters

4. homeowner actions against contractors

5. statutory lending law violations

6. a client's claim against his attorney regarding an improper contingent fee arrangement

7. breach of warranty

8. an employee's unfair act or practice w/in the scope of his employment, for which his employer may be held vicariously liable

9. a violation of the Fair Debt Collection Practices Act

10. failure to warn of a defective or dangerous condition

11. intentional infliction of emotional distress

12. racial harassment perpetrated in the course of an insurance claim investigation

13. a former employee's use of trade secrets

14. a deceptive act that is the result of D's negligence

1. transactions that are strictly private in nature, and are in no way undertaken in the ordinary course of a trade or business

2. internal disputes between parties in the same business venture

3. disputes between employer and employee regarding the employment relationship

4. transactions among members of a business partnership

5. claims by a student against a university regarding actions taken in furtherance of the university's core educational mission

6. claims arising from the private relationship between the board of a condo association (as trustees) and unit owners

7. the sale of a home by private individuals

8. a landowner's tort claim against an abutting landowner, where there was no commercial relationship or transaction

9. a contract claim that involves a good faith dispute about whether money is owed or performance of some kind is due, without any unfair or deceptive behavior

10. claims that are preempted by federal law

The MA attorney general is permitted to make rules and regulations interpreting the prohibition on unfair methods of competition and unfair or deceptive acts or practices. These rules and regulations must be consistent with federal law.

1. it is oppressive or otherwise unconscionable in any respect

2. any person or other legal entity subject to the Act fails to disclose to a buyer/prospective buyer any fact, the disclosure of which may have influenced the buyer/prospective buyer not to enter into the transaction

3. it fails to comply with existing Massachusetts statutes, rules, regulations, or laws meant to protect the public's health, safety, or welfare OR

4. it violates the Federal Trade Commission Act, the Federal Consumer Credit Protection Act, or other federal consumer protection statutes within the purview of the Act.

Another regulation of the attorney general prohibits any claim or representation concerning a product that directly, by implication, or by failure to adequately disclose additional relevant information, has the capacity, tendency, or effect of deceiving buyers or prospective buyers in any material respect.

1. false advertising

2. repairs and services

3. home sales, rentals, and repairs

4. marketing and sales

5. health services

6. substitution of products and failure to deliver products

7. book subscriptions and mail orders

8. deceptive pricing, including pricing and refund, return, and cancellation privileges

9. referral schemes

10. private home study and business, technological, career, or social skills schools

11. private employment agencies and business schemes

12. debt collection

13. raffles

14. bazaars

15. viatical settlements and loans

Whether conduct is deceptive is a question of fact. Generally, a practice or act will be unfair under the act if it is:

1. within the penumbra of common law, statutory, or other established concept of unfairness

2. immoral, unethical, oppressive, or unscrupulous OR

3. causes substantial injury to competitors or other business people

*Massachusetts case law has also held that a practice is deceptive under the Act if it could reasonably be found to have caused a person to act differently from the way he otherwise would have acted, and that conduct is deceptive if it possesses a tendency to deceive

The Act does not apply to transactions or actions otherwise permitted under state and federal regulations. The burden of proving exemptions is upon the person claiming the exemptions.

Also unlawful under the Act. Definition: a practice considered abusive of or injurious to competition (e.g., theft or trade secrets)

1. can bring action on behalf of the state for a temporary restraining order or preliminary or permanent injunction, if he has reason to believe that any person is using or is about to use any unlawful method, act, or practice and that proceedings would be in the public interest

2. action brought under this provision is comparable to a class action, b/c the attorney general has the power to bring suit on behalf of those persons specifically injured and all persons similarly situated

If attorney general has authority to bring action, he may instead choose to accept assurance of discontinuance of any method, act, or practice in violation of the Act from any person alleged to be/have been engaged in such method, act, or practice. If the assurance is violated, the attorney general may bring an action and evidence the violation of the assurance will be prima facie evidence of a violation of the Act.

Pursuant to investigation, attorney general may:

1. take testimony under oath concerning the alleged unlawful method, act, or practice

2. examine any documentary material of whatever nature relevant to the alleged unlawful method, act, or practice

3. require attendance during an examination of documentary material of any person with knowledge of the documentary material AND

4. take testimony under oath or acknowledgment with regard to the documentary material

1. a person who has been injured by unfair or deceptive acts or practices OR

2. a person whose rights are affected by another person violating the prohibition on unfair claim settlement practices

*the petitioner need not be a purchaser

*Act does not require contractual privity

*consumers need only show that they suffered injury (not loss of money or property)

invasion of a legal right

Where appropriate, the action may be brought in superior court, district court, housing court, small claims court, or federal district court.

Consumer entitled to sue may bring action on behalf of himself and other injured consumers if:

1. the use or employment of the unfair or deceptive act or practice has caused similar injury to numerous other persons similarly situated; AND

2. the court finds in a preliminary hearing that the petitioner adequately and fairly represents the other persons

*the action may not be dismissed, settled, or compromised w/o the court's approval, and notice of any proposed such action must be given to all class members in the manner directed by the court

At least 30 days prior to filing an action, a prospective petitioner must mail or deliver a written demand for relief to any prospective respondent. The demand must:

1. expressly reference the Act

2. identify the petitioners

3. assert that the petitioners' rights as consumers have been violated and reasonably describe the unfair/deceptive act/practice relied upon

4. reasonably describe the injury suffered and the relief sought

5. state that the petitioners expect a settlement offer w/in 30 days AND

6. state that the petitioners will pursue multiple damages and attorney's fees and costs if the relief is denied.

*this is prerequisite for filing a complaint

*any relief not set out in demand letter cannot be granted

2. respondent will thereby limit any recovery to the amount offered in the tender of settlement if the court finds that the amount offered was reasonable in relation to the injury petitioner actually suffered

3. reasonableness of offer is question of fact; respondent has burden of proving reasonableness

4. EXCEPTION: in case of unfair/deceptive act/practice with regard to any security or any contract of sale of commodity for future delivery, petitioner will recover actual damages even if respondent made reasonable tender

1. claim is asserted by way of counterclaim or cross-claim

2. prospective respondent does not maintain a place of business or does not keep assets within MA

a businessperson--i.e., one who engages in the conduct of any trade or commerce--who loses money or real or personal property as a result of another businessperson's unfair method of competition or unfair or deceptive act or practice in violation of the Act may bring an action for damages or equitable relief

Conduct undertaken in a business context can be considered unfair or deceptive only if it reaches a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce. A mere breach of contract is not sufficient to satisfy this demanding standard.

Petitioner must show that he suffered a loss of money or property as a result of the unfair method of competition or unfair/deceptive act or practice. A petitioner who has not lost any money or property may obtain an injunction if he shows that the unfair method of competition, act, or practice may cause him to lose money or property.

Burden of proof is on the person claiming that the transactions and actions did not occur primarily or substantially in MA.

Factors to determine whether primarily or substantially in MA:

1. where respondent committed the deceptive or unfair acts or practices

2. where petitioner received and acted upon the deceptive or unfair statements AND

3. the situs of petitioner's losses due to the unfair or deceptive acts or practices