PA Supreme Court Further Expands Liability With Latest Ruling
Yesterday, the Supreme Court of Pennsylvania issued a ruling that makes the state even more appealing to trial lawyers by removing the need to prove a business was fraudulent or negligent under the state’s consumer protection law. The Court […]
Yesterday, the Supreme Court of Pennsylvania issued a ruling that makes the state even more appealing to trial lawyers by removing the need to prove a business was fraudulent or negligent under the state’s consumer protection law. The Court was recently named the No. 1 “Judicial Hellhole®” by the American Tort Reform Foundation.
In a 4-3 decision in Gregg v. Ameriprise Financial, the Court held that a plaintiff is not required to prove that a business intended to mislead a consumer in Unfair Trade Practices and Consumer Protection Law (“CPL”) claims, effectively making the state’s CPL a “strict liability” statute.
“This decision will open the floodgates in Pennsylvania for an explosion of consumer lawsuits based on little more than buyer’s remorse,” American Tort Reform Association (ATRA) President Tiger Joyce said.
In its amicus brief filed with the Pennsylvania Supreme Court, ATRA argued that the statute did, in fact, require that a plaintiff prove an intent to deceive on the part of a defendant and that the legislature did not intend that the CPL establish strict liability. The Court, however, disagreed and concluded that the CPL should be construed broadly to prevent “unscrupulous business practices.”
The dissent, which the Chief Justice joined, stated that this interpretation removes protections for “honest businesspeople from incurring unforeseen penalties for statements or acts that no consumer would have been confused or misled by.”
“This interpretation of strict liability will lead to more litigation but do nothing to help consumers who have suffered actual injuries. This, in turn, will lead to a rise in litigation costs, which will ultimately be passed on to all consumers,” Joyce said. “In the end, the Court’s decision will significantly harm consumers, businesses, and the Commonwealth.”
Background on Gregg v. Ameriprise Financial: The case began in 1999 when an Ameriprise sales representative made a material misrepresentation in an insurance policy that he sold to the Greggs. After receiving a class action notice in the mail, the Greggs sued Ameriprise Financial alleging violations of the CPL, negligent misrepresentation, and fraudulent misrepresentation. A jury found for defendants regarding the negligent and fraudulent misrepresentation claims, but a judge found for the plaintiff on the CPL claim. Defendant appealed, claiming that if they were not negligent or fraudulent in the misrepresentation, they could not be held liable under the CPL. The Superior Court held for the plaintiff, and defendant appealed.
The Pennsylvania Supreme Court affirmed the lower court’s interpretation of the CPL and held that the plaintiffs did not have to prove negligent or fraudulent misrepresentation to prevail on their CPL claim, effectively making CPL a strict liability statute.
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