Chapter 12 - § 12.3 • ELEMENTS DEFINED
| Jurisdiction | Colorado |
§ 12.3.1—The Defendant Engaged in an Unfair or Deceptive Trade Practice
The deceptive trade practices are enumerated in C.R.S. § 6-1-105(1).14 Under the statute, a "person"15 has engaged in a deceptive trade practice when, in the course of his or her business, vocation,16 or occupation, he or she commits any of a robust list of deceptive trade practices.17 The statutory list is non-exhaustive.18 Many of the enumerated prohibited practices involve providing false or misleading representations with regard to the sale of goods or services.19 Others include failing to disclose material information concerning goods, services, or property.20 Other prohibited practices include disparaging the goods, services, property, or business of another;21 activities related to pyramid promotional schemes;22 "bait and switch" advertising;23 door-to-door sales;24 and radon test services.25 Several of the prohibited practices concern false representations.26
In some cases, the plaintiff must show both an intentional and a knowing misrepresentation.27 Even though not all of the itemized acts constituting deceptive trade practices include an express intent requirement, the Colorado Court of Appeals has nonetheless held that "the element of intent is a critical distinction between actionable CCPA claims and those sounding merely in negligence or contract,"28 suggesting that intent is always part of the first element. In Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc.,29 the Colorado Supreme Court determined that to establish a deceptive trade practice, a plaintiff must show that the defendant "knowingly" made a false representation. The court concluded that a "false representation" "must either induce a party to act, refrain from acting, or have the capacity or tendency to attract consumers."30 The court reasoned that a plaintiff may satisfy the statutory requirements "by establishing either a misrepresentation or that the false representation had the capacity or tendency to deceive, even if it did not."31 Quoting Rhino Linings, the Tenth Circuit stated "[t]o be a deceptive trade practice under the CCPA, a false or misleading statement must be made with knowledge of its untruth, or recklessly and willfully made without regard to its consequences, and with an intent to mislead and deceive the plaintiff."32
§ 12.3.2—The Practice Occurred in the Course of the Defendant's Business, Vocation, or Occupation
The second element, that the challenged practice must have occurred in the course of the defendant's business, vocation, or occupation, is typically not disputed.33 For example, in Martinez,34 the plaintiff alleged that a physician represented he was able to diagnose organic brain injury when he was not competent to do so. The plaintiff further alleged that the physician relied on tests that he knew or should have known were inappropriate for the contexts in which they were used. The court determined that the physician's conduct, if proven, would constitute a deceptive practice that "undisputedly occurred in the course of . . . business practice."35
§ 12.3.3—The Practice Significantly Impacts the Public as Actual or Potential Consumers of the Defendant's Goods, Services, or Property
The third element, that the challenged practice significantly impacts the public, is typically more problematic for plaintiffs. The CCPA provides that a civil action is available to any person who is:
• An actual or potential consumer of the defendant's goods, services,36 or property37 who is injured as a result of a deceptive trade practice;38
• A residential subscriber39 who receives an unlawful telephone solicitation;40
• Any successor-in-interest to an actual consumer who purchased the defendant's goods, services, or property; or41
• Injured in the course of the person's business or occupation as a result of a deceptive trade practice.42
However, the Act was adopted to control various deceptive practices that arise in dealing with the public.43 The CCPA does not provide a remedy for wrongs that are private in nature and do not affect the public.44 As a result, Colorado courts require that the deceptive trade practices "significantly impact the public as actual or potential consumers of the defendant's goods, services, or property."45 It is not sufficient under the CCPA that the defendant's industry affects the public interest.46 Whether the deceptive trade practice significantly impacts the public is a question of fact to be resolved by the trier of fact, and not an issue of law.47 Courts evaluate the following factors in determining whether the challenged practice significantly impacts the public:48 (1) the number of consumers directly affected by the challenged practice;49 (2) the relative sophistication and bargaining power of the consumers directly affected by the challenged practice;50 and (3) evidence that the challenged practice previously has impacted other consumers and has significant potential to do so in the future.51 To adequately plead a CCPA claim, the complaint must set forth facts that, if proved, establish a significant public impact.52 Note that Colorado's pattern civil jury instruction defining "significant impact on the public" subdivides the foregoing three factors into five separate factors (each separated by "and"), and indicates that "any other factors the court has determined are relevant in determining significant public impact" may be added to the instruction.53
Wide dissemination of the misleading information to the general public is helpful to establish significant public impact.54 Even where a product is widely advertised, a significant public impact may not exist if only a small proportion of the recipients of the misleading information were potential customers due to the significant expense of the product.55 It is not sufficient under the CCPA that the defendant's industry affects the public interest because it is not the public nature of a particular business, but rather the particular challenged practice of that business that must significantly impact the public.56
§ 12.3.4—The Plaintiff Suffered Injury in Fact to a Legally Protected Interest
The plaintiff must show he or she suffered injury in fact to a legally protected interest.57 This element is a question of law for the court58 and the initial threshold for meeting this element is low.59 "Legally protected interest" covers interests broader than just those consumer protection interests defined in the CCPA, and includes injury to property, particularly property with business value.60
§ 12.3.5—The Practice Caused the Plaintiff's Injury
The fifth element is a requirement that the plaintiff show causation, which is a question of fact for the fact finder and is necessary to establish liability in a private cause of action.61 "Reliance often provides a key causal link between a consumer's injury and a defendant's deceptive practice."62 If a plaintiff seeks money damages for violation of the Act, he or she must show a causal connection between the alleged violation and the amounts sought.63
When a plaintiff seeks to establish causation on a class-wide basis without consideration of individual evidence, Colorado trial courts must analyze the evidence presented to determine "not only whether the circumstantial evidence common to the class supports an inference of causation," but also whether there exists any individual evidence that "refutes such an inference."64
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Notes:
[14] The CCPA is not an exclusive remedy. In Coors v. Security Life of Denver Ins. Co., 91 P.3d 393, 400 (Colo. App. 2003), aff'd on other ground 112 P.3d 59 (Colo. 2005), the Colorado Court of Appeals explained that the language in the CCPA stating "deceptive trade practices listed in this section are in addition to and do not limit the types of unfair trade practices actionable at common law or under other statutes of this state" means that conduct not expressly provided in C.R.S. § 6-1-105(1) may otherwise be actionable as an unfair trade practice under a different statute (i.e., the Colorado Unfair Claims Deceptive Practices Act (UCDPA)) or other legal theory.
[15] See Hoang v. Arbess, 80 P.3d 863, 870 (Colo. App. 2003) (individual liability of corporate officers and agents was proper under CCPA; manager of defendant corporation could be individually liable where evidence showed he knew or should have known of flawed construction techniques, directed sales persons to represent otherwise, and failed to disclose flawed landscaping techniques); Showpiece Homes, 38 P.3d at 55 (definition of person under CCPA is broad enough to encompass insurance companies). See also Dolin v. Contemporary Fin. Solutions, Inc., 622 F. Supp. 2d 1077, 1089 (D. Colo. 2009) (proposition that corporations can act only through their agents supports finding that they should be held liable when their agents violate CCPA; Act provides for vicarious liability); Heller v. Lexton-Ancira Real Estate Fund, 809 P.2d 1016, 1022 (Colo. App. 1990) ("Person," as used in this section, includes business corporations). See also Fiberglass Component Prod., Inc., 983 F. Supp. at 960-61 (corporation has standing to bring a CCPA action); CJI-Civ. 29:1 (CLE ed. 2018).
[16] The inclusion of the term "vocation" indicates that professionals in fields such as law and medicine may be held accountable under the CCPA. Crowe v. Tull, 126 P.3d 196, 203 (Colo. 2006). In Crowe, the Colorado Supreme Court held that attorneys may be held liable for CCPA violations. The proper test for CCPA liability is whether the attorney's conduct constitutes a deceptive trade practice with the requisite intent, and also meets the elements of public impact and causation. The court noted that the CCPA will not regularly accompany attorney malpractice claims because those cases in which a lawyer's actions will have an impact beyond private contract with the client will be few, and the elements of malpractice are only...
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