Lawyers in our Consumer Fraud Section have learned in handling consumer fraud cases for clients in Alabama and other states that there are considerable differences among the many state consumer protection statutes. Before filing a case involving a consumer fraud issue in any state, a lawyer must check carefully the applicable statutory law in that state. Never assume that all states have like or even similar statutory laws, because they don’t. The major areas of difference are:
The substantial differences among state consumer protection statutes emphasize the difficulties and issues that a lawyer must address in order to bring a nationwide, multi-jurisdictional class action based on these consumer protection acts. While some consumer protection statutes can be enforced only by a state’s Attorney General, many statutes allow an individual to bring a private cause of action. But some consumer protection statutes allow private claims only for procuring injunctive or other equitable relief. Many states’ statutes, however, allow private claims for the recovery of damages. Some of these states, in turn, allow a consumer to bring a private cause of action for the recovery of damages only in particular and specific circumstances.
State consumer protection statutes vary as well in relation to the requirements of causation and injury. Under many consumer protection statutes, a Plaintiff must prove that he or she was actually injured and that the injury was the result of the statutory violation in order to recover damages. But under some statutes the requirement of injury is embedded within the definition of standing to sue.
A violation of some statutes, as opposed to a claim of damages, may be established solely by proof that an act or practice was capable of being interpreted in a misleading manner or had a tendency to deceive consumers. Other statutes require a Plaintiff to prove only that there is a likelihood of damage. Under these statutes, the Plaintiff need not allege that the consumer actually was deceived. In one state, Georgia, the Plaintiff must prove that the Defendant’s actions have the potential to harm the public.
Consumer protection statutes also contain differing requirements relating to proof of reliance. Some of the statutes require the Plaintiff to prove actual reliance on the Defendant’s deceptive practices, while others require only that the reliance be reasonable. But under some of the statutes, reliance doesn’t even have to be proven at all. Other statutes require proof of reliance only for certain violations. For example, in Iowa, proof of reliance is only required when the Defendant conceals, suppresses, or omits a material fact. In some states, such as Arizona, Georgia, Illinois, Oregon, and Texas, reliance is an element of causation.
Even in states where reliance is not an actual element required to state a cause of action under the consumer protection statutes, proof of reliance is usually necessary to show proximate cause in order to establish damages. Thus, a Plaintiff’s burden with respect to individual reliance varies considerably depending on the jurisdiction. You can readily see from this brief discussion of states’ consumer protection statutes that there are significant differences in the laws. I can also say that in some states, the laws are fairly strong, while in others – like Alabama – they are pretty weak.
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