North Carolina

• Pages: 451-459

451

CHAPTER 35

NORTH CAROLINA

A. Scope of the Statute and Elements of a Cause of Action

North Carolina’s primary statute on consumer protection is found in

Chapter 75 of the North Carolina General Statutes, entitled “Monopolies,

Trusts and Consumer Protection.”1 Section 75-1.1 declares unlawful

“[u]nfair methods of competition in or affecting commerce, and unfair or

deceptive acts or practices in or affecting commerce.”2 The statute is

similar to the Federal Trade Commission Act, and the North Carolina

Supreme Court has held that “[b]ecause of the similarity in language, it is

appropriate for us to look to the federal decisions interpreting the FTC Act

for guidance in construing the meaning of [section] 75-1.1.”3

A claim for violation of section 75-1.1 requires three showings. First,

the claimant must show the co mmission of an unfair or deceptive act or

practice. Second, the act or practice must have been “in or affecting

commerce.” Finally, the act or practice must have proximately caused

injury to the claimant.

Most section 75-1.1 litigation focuses on the first two elements, which

are discussed in more depth below.

1. Conduct Standards

Section 75-1.1 claims can be divided into five conduct categories.4

The first category is deception. This category reaches acts that have

“the capacity or tendency to deceive.”5 The deception need not be

intentional.6 Negligent misrepresentations, and even literally truthful

1. N.C. GEN. STAT. § 75, art. 1.

2. Id. § 75-1.1(a).

3. Johnson v. Phoenix Mut. Life Ins. Co., 266 S.E.2d 610, 620 (N.C. 1980),

overruled on other grounds by Myers & Chapman & Chapman, Inc. v.

Thomas G. Evans, Inc., 374 S.E.2d 385, 391-92 (N.C. 1988); accord DKH

Corp. v. Rankin-Patterson Oil Co., 506 S.E. 2d 256, 258 (N.C. Ct. App.

1998).

4. Sparks v. Oxy-Health, 134 F. Supp. 3d 961, 997 (E.D.N.C. 2015).

5. Marshall v. Miller, 276 S.E.2d 397, 403 (N.C. 1981).

6. Myers v. Liberty Lincoln-Mercury, Inc., 365 S.E.2d 663, 664 (N.C. Ct.

App. 1988).