On the Propriety of the Public Interest Requirement in the Washington Consumer Protection Act

• Publication year: 1986

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 10, No. 1FALL 1986

NOTE

On The Propriety of the Public Interest Requirement in the Washington Consumer Protection Act

Susan K. Storey

I. Introduction

As a general rule, the purpose of a private cause of action is to redress some injury that the defendant has allegedly caused the plaintiff. The Washington Supreme Court deviates from this general rule in its current interpretation of the Washington Consumer Protection Act.(fn1) While the Washington Consumer Protection Act allows a private consumer to sue for redress of an injury,(fn2) a suit under the Act, as judicially interpreted, must be based on more than an isolated individual injury.(fn3) This judicial interpretation is based on two phrases in the purpose section of the Act.(fn4) The first states that the purpose of the Act is to "protect the public and foster fair and honest competition."(fn5) The second phrase indicates that an action under the Act must not prohibit acts or practices that are not injurious to the public interest.(fn6) The Washington Supreme Court has interpreted the above two phrases to mean that a private action under the Act must serve the public interest.(fn7) As a result, showing "public interest" has become a necessary element of a private consumer protection case.(fn8)

This Note discusses first, whether the judicially created public interest element can be justified by the language of the Consumer Protection Act and, second, assuming some justification for the element can be found, whether the public interest test, as delineated in Anhold v. Daniels(fn9) and Hangman Ridge Training Stables, Inc. v. Safeco Title Insurance Co.,(fn10) serves a purpose intended by the legislature.(fn11) This Note concludes that the public interest element is unnecessary because it hinders and often prevents consumer litigation of private damage actions under the Act. Moreover, the public interest element cannot be justified by any other policy reason. The legislature should take action to clarify, for the courts and the public, what elements of proof are to be required of a private consumer who brings a suit under the Washington Consumer Protection Act. Specifically, the legislature should eliminate the judicially created public interest requirement and legislate clear criteria for determining whether a particular consumer's cause of action will fall within the Consumer Protection Act.(fn12)

II. Creation of the Public Interest Element

In Lightfoot v. MacDonald,(fn13) the court first determined that a private consumer's suit must serve the public interest if it is to fall within the scope of the Washington Consumer Protection Act. The court briefly discussed the purpose section of the Act, stating:It is the obvious purpose of the Consumer Protection Act to protect the public from acts or practices which are injurious to consumers and not to provide an additional remedy for private wrongs which do not affect the public generally.(fn14)

The court further explained that "[w]here relief is provided for private individuals by way of restitution, it is only incidental to and in aid of the relief asked on behalf of the public."(fn15) Referring to the purpose section of the statute for authority, the court concluded that the legislature's purpose was to "enlist the aid of private individuals damaged by acts or practices which were forbidden in the acts, to assist in the enforcement of the laws."(fn16)

Thus, the court reasoned that, in bringing a private suit under the Act, the consumer acts as a private attorney general.(fn17) In this role, consumer suits under the Act were originally limited to those that "also would be vulnerable to a complaint by the Attorney General under the Act."(fn18) This has been called the "Attorney General test."(fn19)

Although the court has subsequently recognized difficulties in applying the Attorney General test, it has not retreated from requiring the finding of a public interest element.(fn20) Since the legislature did not define the term "public interest"(fn21) as used in the purpose section of the Act, the interpretation and application of this judicially created public interest element is left to the courts.

A recently developed test for determining whether a consumer suit under the Act serves the public interest is found in Anhold v. Daniels.(fn22) There the court stated:The presence of public interest is demonstrated when the proof establishes that (1) the defendant by unfair or deceptive acts or practices in the conduct of trade or commerce has induced the plaintiff to act or refrain from acting; (2) the plaintiff suffers damage brought about by such action or failure to act; and (3) the defendant's deceptive acts or practices have the potential for repetition.(fn23)

The phrase "potential for repetition" was defined in a subsequent case to mean a "protracted course of conduct" or a "general pattern of deceptive acts."(fn24) It is not sufficient to show that the repetition of an isolated act is hypothetically possible.(fn25) It is suffient to show a single isolated transaction only if many other consumers have been or are likely to be affected.(fn26)

Recently, in Hangman Ridge,(fn27) the Washington Supreme Court attempted to clarify what a private consumer is required to show under the Act. Post-Hangman Ridge plaintiffs are now required to show the following elements:(1) unfair or deceptive act or practice-which has a capacity to deceive(fn28) a substantial portion of the public; (2) the act or practice must occur in trade or commerce which includes the sale of assets or services and any commerce directly or indirectly affecting the people of the State of Washington;(fn29) (3) public interest impact;(fn30) (4) plaintiff was injured in his or her "business or property";(fn31) (5) causation-or inducement.(fn32)

These five elements do little more than restate the previously quoted three-part Anhold test.(fn33) The greatest contribution Hangman Ridge makes to this area of the law is to clarify and bring together what already has been held in previous cases. New concepts, rules, elements, or theories are conspicuously missing. For example, the "factors," which the court has declared to be "relevent to establish public interest,"(fn34) all require some degree of proof that the defendant's conduct is potentially repetitious or part of a "general pattern of deceptive acts."(fn35) Further, each of the five "factors" which the Hangman Ridge case lists is drawn directly from the court's ruling in prior consumer protection cases. The factors in a consumer transaction are: (1) Were the alleged acts committed in the course of defendant's business? (2) Are the acts part of a pattern or generalized course of conduct? (3) Were repeated acts committed prior to the act involving plaintiff? (4) Is there a real and substantial potential for repetition of defendant's conduct after the act involving plaintiff? (5) If the act complained of involved a single transaction, were many consumers affected or likely to be affected?(fn36)

This judicially created element significantly enlarges the plaintiff's burden and has so far deviated from the legislature's enactment that it has rendered the private cause of action under the Act nearly useless. More importantly, it has substantially impaired the effectuation of the legislative purpose behind the private cause of action under the Act.

III. Statutory Analysis and the Legislature's Purpose

The legislative history of the Washington Consumer Protection Act is sparse and sheds little light upon the legislature's purpose in allowing the private cause of action. However, the timing of the Act's enactment, a close analysis of the Act itself, and a comparison to the most comparable federal law, the Federal Trade Commission Act, provide a relatively complete picture of the legislative intent.

A. Timing

The legislature first enacted the Washington Consumer Protection Act in 1961. At that time, the legislature gave a "person"(fn37) authority to bring a lawsuit under all but one of the violation sections of the Act. In 1970 the legislature extended that authority to include all violation sections.(fn38)

The 1960's through the early 1970's was a period of heightened consumer protection activity.(fn39) Legislatures around the country were taking note of the consumer climate and enacting legislation "aimed at safeguarding the consumer's right to be informed, to choose, to be heard, and to be protected from injury."(fn40) Like other legislatures around the country, the Washington legislature responded to the consumerism of the 1960's and early 1970's by enacting the Washington Consumer Protection Act and providing for a private cause of action thereunder.(fn41) Thus, contrary to the court's understanding, the timing of the Act's enactment indicates that consumer actions are not allowed merely to "enlist the aid of private individuals . . . in the enforcement of the laws."(fn42) Neither is the relief provided in the Act for private individuals "only incidental to and in aid of the relief asked on behalf of the public."(fn43)

B. Language and Format

An analysis of the language and overall format of the Act further reveals the goal and collective mind of the legislature when applied to a private cause of action. When the legislature enacted the Washington Consumer Protection...