Consumer Protection Act - Consumer Protection Division (February 5, 2020)
Summary
A document titled Consumer Protection Act by Shannon Smith, Division Chief of the Consumer Protection Division, dated February 5, 2020. It states that the Attorney General is the primary enforcer of the Consumer Protection Act (CPA) and that the CPA affords a private right of action. It lists relief for an Attorney General action, including civil penalties of up to $2000 per violation, and for a private action, where a court can treble damages up to $25,000. A closing page compares the CCPA with WA Privacy Proposals.
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“Consumer Protection Act - Consumer Protection Division (February 5, 2020).”
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CONSUMER PROTECTION ACT
Shannon Smith, Division Chief
Consumer Protection Division
February 5, 2020
ATTORNEY WORK PRODUCT
PRIVILEGED AND CONFIDENTIAL
Consumer Protection Act (CPA)
RCW 19.86, “Unfair Business Practices-Consumer
Protection Act”
Protects the marketplace from unfair, deceptive,
and anti-competitive practices
The Attorney General is the primary enforcer of
the CPA
The CPA affords a private right of action
2
ATTORNEY WORK PRODUCT
PRIVILEGED AND CONFIDENTIAL
Elements of a CPA Violation
AGO Enforcement Private Enforcement
1. Unfair or deceptive act 1. Unfair or deceptive act
or practice; or practice;
2. Occurs in trade or 2. Occurs in trade or
commerce; and commerce;
3. Public interest impact 3. Public interest impact;
4. Injury; and
5. Causation
Hangman Ridge Training Stables v. Safeco Ins. Co. (1986) 3
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PRIVILEGED AND CONFIDENTIAL
Elements of a CPA Violation
Actual deception is not required;
capacity to deceive a substantial
portion of the public is all that is
necessary
Intent to deceive is not required
But, private plaintiffs must prove injury
and causation
Hangman Ridge Training Stables v. Safeco Ins. Co. (1986)
4
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Relief for CPA Violation
Attorney General Action Private Action
Injunctions Injunctions
Consumer restitution Actual damages
suffered
Civil penalties of up to
$2000 per violation Court can treble
damages up to
Prevailing party
$25,000
(including defendant)
can obtain costs and Plaintiff can obtain
attorney’s fees costs and attorney’s
fees
5
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PRIVILEGED AND CONFIDENTIAL
Exemptions to CPA
“Reasonable acts” that do not
injure the public are not violations
Conduct “otherwise regulated”
does not violate the CPA
Statute-by-statute exemptions can
swallow important protections
6
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PRIVILEGED AND CONFIDENTIAL
AGO Enforcement
Consumer Protection Division enforces the
provision prohibiting unfair or deceptive
practices (UDAPs)
The Antitrust Division enforces the antitrust
provisions that prohibit anticompetitive
conduct
The Civil Rights Division may enforce the CPA
in situations involving discrimination
The Environmental Protection Unit may enforce
the CPA regarding environmental issues
7
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PRIVILEGED AND CONFIDENTIAL
AGO Enforcement
AG brings actions for the benefit of the
public, not individual consumers
Focus on defendant’s conduct
Individual consumer restitution important,
but incidental to public relief
Restitution is different from damages
Deters unlawful acts or practices
8
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AGO Enforcement – Challenges
Civil penalties limited to $2000 per violation
Trial courts have imposed a two-year statute of
limitations on civil penalties
Restitution means “restore” what has been
“unlawfully acquired”
AGO may have to pay defendant’s attorneys’
fees if case is not successful
In privacy and tech, defendants are overseas
9
ATTORNEY WORK PRODUCT
PRIVILEGED AND CONFIDENTIAL
Consumer Protection Division –
Enforcement
Cases filed by Consumer Protection
Division:
2019: 53
2018: 41
Includes voluntary assurances, consent
decrees, and lawsuits
CP Division has 90-120 investigations per
year; can take weeks or years to
complete 10
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PRIVILEGED AND CONFIDENTIAL
Consumer Protection Division –
Enforcement
There are no enforcement thresholds
No formal criteria for cases, but factors include:
Consumer harm
Dollar amounts; pervasiveness; scope; impact
Vulnerable consumers
Other enforcers
Local actors
More effective alternatives to litigation
Risk of negative outcome and payment of
defendant’s attorneys’ fees
11
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PRIVILEGED AND CONFIDENTIAL
Consumer Protection Division –
Enforcement
The CPA does not require proof of harm
The AGO is not required to prove that any consumer
suffered monetary loss
Currently, the AGO can bring actions under the CPA for
failure to reasonably secure data or failing to keep
information private without proof that any consumer was
harmed
Failing to secure data and protect privacy are unfair or
deceptive practices under the CPA
12
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PRIVILEGED AND CONFIDENTIAL
Private Enforcement
CPA was enacted in 1961
Private right of action was added in 1971 in
response to a need for additional enforcement
capabilities
The CPA encourages private actions to enlist
the aid of private individuals in enforcing the
law for the benefit of the public
There must be a public interest impact
Deters unlawful acts or practices
13
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PRIVILEGED AND CONFIDENTIAL
Private Enforcement
Consumers must prove injury caused by the unfair
or deceptive practice
Consumers often include other causes of action,
such as breach of contract, negligent
misrepresentation, or other actions
The quality of the private action varies, as is usual
in all litigation
Most states have a private right of action, and
many require proof of injury and/or causation
14
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PRIVILEGED AND CONFIDENTIAL
AGO Enforcement vs.
Private Enforcement
AGO Enforcement Private Enforcement
Action brought for Action brought for
benefit of public benefit of consumer,
Consumer restitution is but must have a public
incidental to public interest impact
relief
Individual injury and
Restitution is limited to causation required
money or property
acquired through Damages not limited
unlawful acts to what was acquired
by unlawful acts
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AGO Enforcement vs.
Private Enforcement
The AGO does not represent consumers individually
We cannot act as private counsel for individual
consumers or groups of consumers
Individual interests cannot override public
benefit
Consumer injury and desired remedy can vary
among consumers
The public interest is the real party in interest, not
individuals
16
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PRIVILEGED AND CONFIDENTIAL
CPA Enforcement of Privacy
Interests
AGO restitution remedy is inadequate to protect
privacy interests:
“To restore to any person in interest any moneys or
property, real or personal, which may have been
acquired by means of any act herein prohibited or
declared to be unlawful.”
In many situations, privacy interests are violated
without an exchange of money or property
AGO cannot obtain damages for injury to privacy
interests
17
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PRIVILEGED AND CONFIDENTIAL
CCPA vs. WA Privacy Proposals
CCPA WA Privacy Proposals
Affords a private right of No private right of action
action for a data breach
Preempts local laws and
with failure to reasonably
ordinances
secure data; sets statutory
damages No notice required to third-
parties regarding consumer
Does not preempt local
rights (e.g. requests to
laws and ordinances
delete)
Requires notice to third-
Heavy focus on facial
parties
recognition
Does not treat facial
recognition separately
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ATTORNEY WORK PRODUCT
PRIVILEGED AND CONFIDENTIAL
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