Can businesses sue each other under FDUTPA – Florida Deceptive and Unfair Trade Practices Act?
Can businesses sue each other under FDUTPA? Bernhard Law Firm briefly addressed the ability of businesses to sue under the Florida Deceptive and Unfair Trade Practices (“FDUTPA”) in a prior article. We expand further here. If you have a FDUTPA issue or have been subject to unfair methods of competit
Title 33 and FDUTPAThe Florida Deceptive and Unfair Trade Practices Act is a piece of legislation slated to generally protect consumers. Floridians can locate FDUTPA in Title 33, Part II of Florida's statutory code. Title 33 contains laws on regulation of trade, commerce, investments, and solicitations, spanning nearly 50 Chapters of legal code. In Title 33, the Florida Legislature has set up laws to govern the behavior of just about all business under the sun, governing those people and business that provide: o Loans, mortgages, consumer finance, securities, and investment funds; o Foods like milk and ice cream; o Lodging and lumber; o Swimming pools and trailer parks; o Amusement parks and pool sharks; o Drugs, alcohol shots and slot machines; o Cigarettes, make-up, and funeral services; o Movers and brake fluid; o Scrapped metal and pawned goods; and o Explosives and fire sales; Title 33 regulates: o Labeling of agricultural products; o Trading stamps; o Stamping shipping containers and stamping beef; o Showing livestock and showing horses; o Racing horses and racing cars; and o Marking baskets and trademarks. Between all of these regulations, Floridians can find the Florida Deceptive and Unfair Trade Practices Act at Chapter 501, Part II. Through FDUTPA, the Florida Legislature declared unlawful any "unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce." ? 501.204(1), Fla. Stat. (2014). The Florida Legislature made this declaration intentionally broad, in order to "protect the consuming public and legitimate business enterprises." ? 501.202(2), Fla. Stat. (2014) (Purposes; rules of construction).
Who can sue under FDUTPA?Who can sue under the Florida Deceptive and Unfair Trade Practices Act? Despite substantial contradictory case law in the state court system, the plain language of FDUTPA states that "anyone aggrieved" by violations of FDUTPA, including business entities, can sue for damages resulting from outlawed acts (i.e. unfair competition and deceptive acts) in ordinary business transactions, even where there is no consumer transaction. ? 501.211(1), Fla. Stat. (2014) ("anyone aggrieved by a violation of this part may bring an action . . . "); Beacon Property Mgmt., Inc. v. PNR, Inc., 890 So. 2d 274, 277-79 (Fla. 4th DCA 2004). Although there is also substantial contradictory case law in the federal court system, there is significant support for the concept that the "anyone aggrieved" language allows businesses and their operators to sue other businesses for violations of FDUTPA (i.e. unfair competition and deceptive acts). See also Laboratorios Roldan v. Tex Int'l Inc., 902 F. Supp. 1555, 1570 (11th Cir. 1984) (finding FDUTPA meant to protect against business intentionally passing off products as those of other business or affiliate); Big Tomato v. Tasty Concepts, Inc., 972 F. Supp. 662, 664 (S.D. Fla. 1997) (holding business competitor stated cause of action under FDUTPA given "anyone aggrieved" language and that Florida courts have held that business competitors may seek relief under FDUTPA); Contemporary Restaurant Concepts, Ltd., v. Las Tapas-Jacksonville, Inc., 753 F. Supp. 1560, 1565 (M.D. Fla. 1991) (holding restaurant owner entitled to relief under FDUTPA for unfair competition and imitation by other restaurant owner); Klinger v. Weekly World News, Inc., 747 F. Supp. 1477, 1479-80 (S.D. Fla. 1991) (denying defendant-employer's motion to dismiss for failure to state FDUTPA claim where employee sued employer for falsely publishing essays under employee's pseudonym); United Feature Syndicate v. Sunrise Mold Co., 569 F. Supp. 1475, 1481 (S.D. Fla. 1983) (allowing business's recovery under FDUTPA for unfair competition by other business's copyright infringement). Given that FDUTPA expressly prohibits unfair methods of competition, it is reasonable to infer that businesses, rather than consumers, would be the only party to sue other businesses for unfair competition under FDUTPA. ? 501.204(1), Fla. Stat. (2014).
How the courts have discussed business suits under FDUTPAAs the Beacon court held (on the state court level), the plain text of FDUTPA permits suits between purely commercial interests. Beacon Property Mgmt., Inc., 890 So. 2d at 277. In holding as such, the Beacon court noted that the general proscription of FDUTPA does not and did not originally contain any indication that it was intended to be limited to consumer transactions. Id. The Beacon court also discussed that in 1993, the Florida Legislature made some significant changes to FDUTPA, including by deleting definitions of consumer transaction and supplier, and by expanding the definition of consumer to add several business entities, including a catch-all "any commercial entity," and adding the words "unconscionable acts or practices" to the general proscription. Id. at 277-78. The Beacon court then held: We therefore conclude that the 1993 amendments to FDUTPA made clear that the statute is not limited to purely consumer transactions. It is now intended by its plain text to apply to any act or practice occurring 'in the conduct of any trade or commerce' [e.s.] even as between purely commercial interests. Id. at 278.
The FTC's positionEven if FDUTPA were limited to "consumer" plaintiffs, which it is not, FDUTPA's definition of "consumer" includes all commercial entities: "business; firm; association; joint venture; partnership; . . . business trust; syndicate; fiduciary; corporation; any commercial entity, however denominated; or any other group or combination." ? 501.203(7), Fla. Stat. (2014). The Florida Legislature likely included business entities in its consumer definition to align itself with the Federal Trade Commission's position on consumer protection, which "regards injury to competitors as identical to injury to consumers. . . . Deceptive practices injure both competitors and consumers because consumers who preferred the competitor's product are wrongly diverted." 103 F.T.C. 110, 183 n.58 (1984), 1984 FTC LEXIS 71, 104. Under Florida Statutes ? 501.202(3), the Florida Legislature provided that FDUTPA is to be liberally construed to make it consistent with established policies of federal law (FTC statements) relating to consumer protection. Under Florida Statutes ? 501.204(2), the Florida Legislature provided that FDUTPA is to be construed with great weight to the positions of the Federal Trade Commission. The Supreme Court long ago recognized it is deceptive under the FTC Act for a business to misappropriate another's trade name. FTC v. Colgate-Palmolive Co., 380 U.S. 374, 388 (1965). Given that the FTC regards injury to competitors as identical to injury to consumers, allowing businesses to sue each other under FDUTPA would further the goal of inhibiting injury to both competitors and consumers by wrongful diversion from desired or needed products and services. Thus, businesses and their individual owners should be able to sue each other under FDUTPA.