What to Know About Suing Businesses under FDUTPA
The Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) is a state law enacted to protect persons from fraudulent, deceptive, and unfair business practices. “Persons” include not just consumers, but businesses that have been harmed by the unscrupulous actions of other businesses.
Businesses in Florida can sue under FDUTPA if they feel that another business has engaged in deceptive or unfair trade practices. This can include a wide range of activities, such as false advertising, bait and switch tactics, and misrepresentation of products or services.
What Do You Need To Prove Under FDUTPA?
The FDUTPA prohibits “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce. Fla. Stat. § 501.204(1).
The statute provides further guidance that “due consideration and great weight shall be given to the interpretations of the federal Trade Commission and the federal courts” in construing the aforementioned subsection. Fla. Stat. § 501.204(2).
A claim for damages under FDUTPA has three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages. Rollins, Inc. v Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006) (citing Chicken Unlimited, Inc. v. Bockover, 374 So. 2d 96, 97 (Fla. 2d DCA 1979)). The business suing has the burden of proof to establish all three elements to maintain a commercial litigation action.
What Is A Deceptive Practice?
A deceptive practice is one that is “likely to mislead” consumers. Davis v. Powertel, Inc., 776 So. 2d 971, 974 (Fla. 1st DCA 2000). An unfair practice is “one that ‘offends established public policy’ and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’ Samuels v. King Motor Co. of Fort Lauderdale, 782 So. 2d 489, 499 (Fla. 4th DCA 2001).
“Under Florida law, an objective test is employed in determining whether the practice was likely to deceive a consumer acting reasonably.” Waste Pro USA v. Vision Constr. ENT, Inc., 282 So. 3d 911, 918 (Fla. 1st DCA 2019) (quoting Carriuolo v. General Motors, 823 F.3d 977, 983-84 (11th Cir. 2016)).
In addition to false advertising and bait and switch tactics, businesses can also sue under FDUTPA for misrepresentation of products or services. This can occur when a business misrepresents the quality, nature, or characteristics of its products or services, leading customers, including businesses, to believe that they are getting a different product or service than what was actually offered.
What Damages Are You Entitled To?
When a business decides to sue under FDUTPA, it must show that the other business engaged in deceptive or unfair trade practices that caused harm to the business. If the business is able to prove its case, it may be able to recover monetary compensation.
“[A] plaintiff may recover only ‘actual damages’ incurred ‘as a consequence of a violation of the statute.’” City First Mortg. Corp. v. Barton, 988 So. 2d 82, 86 (Fla. 4th DCA 2008) (quoting Smith v. 2001 S. Dixie Highway, Inc., 872 So. 2d 992, 994 (Fla. 4th DCA 2004) (reversing judgment where borrower did not provide evidence indicating actual damages).
Actual damages are the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties. Rollins, Inc. v Butland, at 869.
Under FDUTPA, “actual damages” do not include consequential damages. Boca Raton Lincoln Mercury, Inc. v. Corgnati, 715 So.2d 311, 314 (Fla. 4th DCA 1998).
FDUTPA’s bar on the recovery of consequential damages precludes the recovery of, for example, the costs to repair a building resulting from a deficient inspection for termites. Orkin Exterminating Co. v. Petsch, 872 So.2d 259, 263 (Fla. 2d DCA 2004); Urling v. Helms Exterminators, Inc., 468 So.2d 451, 454 (Fla. 1st DCA 1985).
Similarly, the recovery afforded under FDUTPA does not include diminution in value or stigma damages caused by such things as termite damage. Orkin Exterminating Co. v. DelGuidice, 790 So.2d 1158, 1162 (Fla. 5th DCA 2001).
Pre-Suit Demands are Not Actionable
The Noerr-Pennington doctrine is a judicially created defense against certain business torts for activity that implicates the First Amendment. The case of McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552 (11th Cir. 1992), extended the doctrine to protect “pre-litigative and litigative activities” from claims for unfair trade practices.
Based on the Eleventh Circuit’s reasoning in McGuire Oil federal courts have consistently applied Noerr-Pennington immunity to dismiss actions based on pre-suit communications. For example, PODS Enterprises, Inc. v. ABF Freight Sys., Inc., 100 U.S.P.Q.2d 1708 (M.D. Fla. 2011), and Atico Intern. USA, Inc. v. LUV N’ Care, Ltd., 2009 WL 2589148 (S.D. Fla. Aug. 19, 2009), both dismissed FDUTPA claims based on pre-litigation letters, holding that pre-suit demand and cease and desist letters are “immunized” under Noerr-Pennington.
Similarly, Rolex Watch U.S.A., Inc. v. Rainbow Jewelry, Inc., 2012 WL 4138028 (S.D. Fla. Sept. 19, 2012), applied Noerr-Pennington to dismiss a defendant’s FDUTPA counterclaim based on pre-suit threats of litigation and alleged injuries it sustained in having to defend against the plaintiff’s trademark infringement suit.
In Marco Island Cable, Inc. v. Comcast Cablevision of S., Inc., 2006 WL 1814333 (M.D. Fla. July 3, 2006), the court granted partial summary judgment to the defendant for a FDUTPA claim based on pre-suit letters threatening to sue to enforce defendant’s exclusivity contracts.
Allegations of typical demand letters attorneys send as the basis of a FDUTPA claim and the prospective business’s response, is therefore insufficient to bring a FDUTPA litigation action.
Typically included with a FDUTPA claim, is a breach of contract complaint and complaint for fraud or intentional misrepresentation. These actions differ in their requirements and care is required in filing such lawsuits.
In conclusion, FDUTPA provides a powerful tool for businesses in Florida to protect themselves from deceptive and unfair trade practices. Whether it is false advertising, bait and switch tactics, or misrepresentation of products or services, FDUTPA offers businesses a way to fight back and protect your interests. If you are a business that feels that it has been harmed by deceptive or unfair trade practices, it is important to consult with an experienced attorney to understand your rights and options under FDUTPA.
Contact Eko Law today to work with our business attorney in Clearwater.