The Colorado Consumer Protection Act: an Update

• Publication year: 2000
• Pages: 37
• Citation: Vol. 29 No. 1 Pg. 37

29 Colo.Law. 37 Colorado Lawyer 2000.

2000, January, Pg. 37. The Colorado Consumer Protection Act: An Update

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37

Vol. 29, No. 1, Pg. 37

The Colorado Lawyer
January 2000
Vol. 29, No. 1 [Page 37]

Specialty Law Columns
The Civil Litigator
The Colorado Consumer Protection Act: An Update
by A. Catherine Tallerico

Over the last ten years, claims and litigation under the Colorado Consumer Protection Act ("CCPA" or "Act") have increased dramatically. In 1992, one author described the CCPA as being relegated to obscurity by virtue of its disuse.1 Since then, over a dozen published appellate decisions referencing the CCPA have been handed down, the most significant being Hall v. Walter2 and Martinez v. Lewis3 in 1998. The Hall and Martinez decisions prompted the Colorado legislature to re-examine the Act, leading to revisions in May 1999. This article discusses the Colorado Consumer Protection Act, where it has been and where it may be going

An Overview of the Act

The Colorado Consumer Protection Act became law in 1969. Its provisions are primarily based on the 1966 revised version of the Uniform Deceptive Trade Practices Act ("UDTPA").4 Other states adopting the 1966 revised version of the UDTPA include Georgia, Hawaii, Minnesota Nebraska, New Mexico, Ohio, and Oregon.5 Colorado’s Act differs from the UDTPA in that it incorporates somewhat broader, more expansive language.6

The CCPA is a remedial statute, intended to deter and punish various deceptive trade practices committed by businesses in dealing with the general public.7 The Colorado General Assembly has evidenced its intent that the Act apply primarily to business transactions by declaring

Evidence that a person has engaged in a deceptive trade practice shall be prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition.8

There is, however, no written or recorded record of the proceedings leading to the passage of the CCPA.9 Colorado courts have given the CCPA liberal construction, relying on the Act’s broad deterrent purpose and scope.10 This purpose is achieved through prospective injunctions and potential civil penalties such as treble damages and attorney fees that are otherwise unavailable in fraud and tort cases.11

The CCPA contains statutory provisions describing those instances in which a "person" is deemed to have engaged in a deceptive trade practice in the course of such person’s "business, vocation or occupation."12 The Act broadly defines "person" to include individuals, corporations, business trusts, estates, trusts, partnerships, unincorporated associations, and any other legal or commercial entity.13 The CCPA addresses a full panoply of prohibited business activities involving sales of goods, door-to-door and telephone solicitations, time share sales, health club and dance studio contracts, pyramid promotional schemes, motor vehicle sales, buyers’ club memberships, and occupational therapy. The deceptive trade practices to which the Act was initially directed are general in their application.14 In later years, new subsections of § 6-1-105(1) have been added to address specific industry practices.15 Reflecting the Act’s broad scope, violations of the Act have been asserted in cases relating to false and misleading advertising,16 health clubs,17 auto sales and repairs,18 and trade shows.19

In addition to the many affirmative misrepresentations that may be considered deceptive trade practices, the Act also prohibits the omission of material information that was known at the time of an advertisement or sale if such an omission was intended to induce the consumer to enter into a transaction.20 No Colorado appellate court has directly addressed this particular subsection.21 Arguably, applicability of this section is extremely limited, as it requires the omitted information to be "material" and omitted with the intent to "induce the consumer to enter into a transaction."22

Claims under the CCPA are being asserted more and more in non-public, non-consumer transactions, such as one-of-a-kind private transactions and personal injury cases, to which the Act theoretically does not apply. This includes claims against physicians23 and insurance companies.24 Extensions of the CCPA have been sought to recover treble damages and attorney fees and have been facilitated by the fact that the statute of limitations is longer under a CCPA claim than it is for claims of negligence (see Statute of Limitations section below).

Enforcement of the Act is authorized by public officials in any judicial district or by private action. The attorney general and district attorneys have concurrent responsibilities for enforcement of the Act.25 If the attorney general succeeds, the Act provides for restitution to the injured consumer, civil penalties in the amount of $2,000 for each violation, and up to $100,000 for any related series of violations.26 Both civil and injunctive relief are available.27 Class actions also are permitted under the statute.

1998 Colorado Supreme Court Decisions

As noted above, in 1998, the Colorado Supreme Court handed down two significant decisions interpreting the CCPA: Hall v. Walter28 and Martinez v. Lewis.29 With Hall and Martinez, the court provided practitioners with some clearer guidance for prosecuting and defending claims brought pursuant to the CCPA.

In Hall, the defendants sold subdivided lots of land to the public. In the course of these activities, the defendants misrepresented to...