House File 712 - Enrolled




                                             HOUSE FILE 712

                             AN ACT
 RELATING TO A PRIVATE RIGHT OF ACTION FOR CERTAIN CONSUMER
    FRAUD VIOLATIONS AND INCLUDING AN APPLICABILITY PROVISION.

 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    Section 1.  NEW SECTION.  714H.1  TITLE.
    This chapter shall be known and may be cited as the
 "Private Right of Action for Consumer Frauds Act".
    Sec. 2.  NEW SECTION.  714H.2  DEFINITIONS.
    1.  "Actual damages" means all compensatory damages
 proximately caused by the prohibited practice or act that are
 reasonably ascertainable in amount.  "Actual damages" does not
 include damages for bodily injury, pain and suffering, mental
 distress, or loss of consortium, loss of life, or loss of
 enjoyment of life.
    2.  "Advertisement" means the same as defined in section
 714.16.
    3.  "Consumer" means a natural person or the person's legal
 representative.
    4.  "Consumer merchandise" means merchandise offered for
 sale or lease, or sold or leased, primarily for personal,
 family, or household purposes.
    5.  "Deception" means an act or practice that is likely to
 mislead a substantial number of consumers as to a material
 fact or facts.
    6.  "Merchandise" means the same as defined in section
 714.16.
    7.  "Person" means the same as defined in section 714.16.
    8.  "Sale" means any sale or offer for sale of consumer
 merchandise for cash or credit.
    9.  "Unfair practice" means the same as defined in section
 714.16.
    Sec. 3.  NEW SECTION.  714H.3  PROHIBITED PRACTICES AND
 ACTS.
    1.  A person shall not engage in a practice or act the
 person knows or reasonably should know is an unfair practice,
 deception, fraud, false pretense, or false promise, or the
 misrepresentation, concealment, suppression, or omission of a
 material fact, with the intent that others rely upon the
 unfair practice, deception, fraud, false pretense, false
 promise, misrepresentation, concealment, suppression, or
 omission in connection with the advertisement, sale, or lease
 of consumer merchandise, or the solicitation of contributions
 for charitable purposes.  For the purposes of this chapter, a
 claimant alleging an unfair practice, deception, fraud, false
 pretense, false promise, or misrepresentation must prove that
 the prohibited practice related to a material fact or facts.
 "Solicitations of contributions for charitable purposes" does
 not include solicitations made on behalf of a political
 organization as defined in section 13C.1, solicitations made
 on behalf of a religious organization as defined in section
 13C.1, solicitations made on behalf of a state, regionally, or
 nationally accredited college or university, or solicitations
 made on behalf of a nonprofit foundation benefiting a state,
 regionally, or nationally accredited college or university
 subject to section 509(a)(1) or 509(a)(3) of the Internal
 Revenue Code of 1986.
    2.  A person shall not engage in any practice or act that
 is in violation of any of the following:
    a.  Section 321.69.
    b.  Chapter 516D.
    c.  Section 516E.5, 516E.9, or 516E.10.
    d.  Chapter 555A.
    e.  Section 714.16, subsection 2, paragraphs "b" through
 "n".
    f.  Chapter 714A.
    Sec. 4.  NEW SECTION.  714H.4  EXCLUSIONS.
    1.  This chapter shall not apply to any of the following:
    a.  Merchandise offered or provided by any of the following
 persons, including business entities organized under Title XII
 by those persons and the officers, directors, employees, and
 agents of those persons or business entities, pursuant to a
 profession or business for which they are licensed or
 registered:
    (1)  Insurance companies subject to Title XIII.
    (2)  Attorneys licensed to practice law in this state.
    (3)  Financial institutions which includes any bank
 incorporated under the provisions of any state or federal law,
 any savings and loan association or savings bank incorporated
 under the provisions of any state or federal law, and any
 credit union organized under the provisions of any state or
 federal law, and any affiliate or subsidiary of a bank,
 savings and loan association, savings bank, or credit union.
    (4)  Persons or facilities licensed, certified, or
 registered under chapters 135B, 135C, 135J, 148, 148A, 148B,
 148C, 149, 151, 152, 152A, 152B, 153, 154, 154B, 154C, 154D,
 155A, 156, 169, 522B, 542, 542B, 543B, 544A, or 544B.
    b.  Advertising by a retailer for a product, other than a
 drug or other product claiming to have a health=related
 benefit or use, if the advertising is prepared by a supplier,
 unless the retailer participated in the preparation of the
 advertisement or knew or should have known that the
 advertisement was deceptive, false, or misleading.
    c.  In connection with an advertisement that violates this
 chapter, the newspaper, magazine, publication, or other print
 media in which the advertisement appears, including the
 publisher of the newspaper, magazine, publication, or other
 print media in which the advertisement appears, or the radio
 station, television station, or other electronic media which
 disseminates the advertisement, including an employee, agent,
 or representative of the publisher, newspaper, magazine,
 publication or other print media, or the radio station,
 television station, or other electronic media.
    d.  The provision of local exchange carrier telephone
 service pursuant to a certificate issued under section 476.29.
    e.  Public utilities as defined in section 476.1 that
 furnish gas by a piped distribution system or electricity to
 the public for compensation.
    f.  Any advertisement that complies with the statutes,
 rules, and regulations of the federal trade commission.
    g.  Conduct that is required or permitted by the orders or
 rules of, or a statute administered by, a federal, state, or
 local governmental agency.
    h.  An affirmative act that violates this chapter but is
 specifically required by other applicable law, to the extent
 that the actor could not reasonably avoid a violation of this
 chapter.
    i.  In any action relating to a charitable solicitation, an
 individual who has engaged in the charitable solicitation as
 an unpaid, uncompensated volunteer and who does not receive
 monetary gain of any sort from engaging in the solicitation.
    j.  The provision of cable television service or video
 service pursuant to a franchise under section 364.2 or 477A.2.
    k.  A corporation holding one or more industrial loan
 licenses pursuant to chapter 536A and employing fewer than
 sixty full=time employees or a corporation holding one or more
 regulated loan licenses pursuant to chapter 536 and employing
 fewer than sixty full=time employees.  For purposes of this
 paragraph, "corporation" means the same as defined in section
 536A.2.
    2.  "Material fact" as used in this chapter does not
 include repairs of damage to, adjustments on, or replacements
 of parts with new parts of otherwise new merchandise if the
 repairs, adjustments, or replacements are made to achieve
 compliance with factory specifications and are made before
 sale of the merchandise at retail and the actual cost of any
 labor and parts charged to or performed by a retailer for any
 such repairs, adjustments, and parts does not exceed three
 hundred dollars or ten percent of the actual cost to a
 retailer including freight of the merchandise, whichever is
 less, provided that the seller posts in a conspicuous place
 notice that repairs, adjustments, or replacements will be
 disclosed upon request.  The exclusion provided in this
 subsection does not apply to the concealment, suppression, or
 omission of a material fact if the purchaser requests
 disclosure of any repair, adjustment, or replacement.
    Sec. 5.  NEW SECTION.  714H.5  PRIVATE RIGHT OF ACTION.
    1.  A consumer who suffers an ascertainable loss of money
 or property as the result of a prohibited practice or act in
 violation of this chapter may bring an action at law to
 recover actual damages.  The court may order such equitable
 relief as it deems necessary to protect the public from
 further violations, including temporary and permanent
 injunctive relief.
    2.  If the court finds that a person has violated this
 chapter and the consumer is awarded actual damages, the court
 shall award to the consumer the costs of the action and to the
 consumer's attorney reasonable fees.  Reasonable attorney fees
 shall be determined by the value of the time reasonably
 expended by the attorney including but not limited to
 consideration of the following factors:
    a.  The time and labor required.
    b.  The novelty and difficulty of the issues in the case.
    c.  The skills required to perform the legal services
 properly.
    d.  The preclusion of other employment by the attorney due
 to the attorney's acceptance of the case.
    e.  The customary fee.
    f.  Whether the fee is fixed or contingent.
    g.  The time limitations imposed by the client or the
 circumstances of the case.
    h.  The amount of money involved in the case and the
 results obtained.
    i.  The experience, reputation, and ability of the
 attorney.
    j.  The undesirability of the case.
    k.  The nature and length of the professional relationship
 between the attorney and the client.
    l.  Attorney fee awards in similar cases.
    3.  In order to recover damages, a claim under this section
 shall be proved by a preponderance of the evidence.
    4.  If the finder of fact finds by a preponderance of
 clear, convincing, and satisfactory evidence that a prohibited
 practice or act in violation of this chapter constitutes
 willful and wanton disregard for the rights or safety of
 another, in addition to an award of actual damages, statutory
 damages up to three times the amount of actual damages may be
 awarded to a prevailing consumer.
    5.  An action pursuant to this chapter must be brought
 within two years of the occurrence of the last event giving
 rise to the cause of action under this chapter or within two
 years of the discovery of the violation of this chapter by the
 person bringing the action, whichever is later.
    6.  This section shall not affect a consumer's right to
 seek relief under any other theory of law.
    7.  A person shall not be held liable in any action brought
 under this section for a violation of this chapter if the
 person shows by a preponderance of the evidence that the
 violation was not intentional and resulted from a bona fide
 error notwithstanding the maintenance of procedures reasonably
 adopted to avoid the error.
    Sec. 6.  NEW SECTION.  714H.6  ATTORNEY GENERAL
 NOTIFICATION.
    1.  A party filing a petition, counterclaim,
 cross=petition, or pleading, or any count thereof, in
 intervention alleging a violation under this chapter, within
 seven days following the date of filing such pleading, shall
 provide a copy to the attorney general and, within seven days
 following entry of any final judgment in the action, shall
 provide a copy of the judgment to the attorney general.
    2.  A party appealing to district court a small claims
 order or judgment involving an issue raised under this
 chapter, within seven days of providing notice of the appeal,
 shall notify the attorney general in writing and provide a
 copy of the pleading raising the issue and a copy of the small
 claims court order or judgment.
    3.  A party appealing an order or judgment involving an
 issue raised under this chapter, within seven days following
 the date such notice of appeal is filed with the court, shall
 notify the attorney general in writing and provide a copy of
 the pleading raising the issue and a copy of the court order
 or judgment being appealed.
    4.  Upon timely application to the court in which an action
 involving an issue raised under this chapter is pending, the
 attorney general may intervene as a party at any time or may
 be heard at any time.  The attorney general's failure to
 intervene shall not preclude the attorney general from
 bringing a separate enforcement action.
    5.  All copies of pleadings, orders, judgments, and notices
 required by this section to be sent to the attorney general
 shall be sent by certified mail unless the attorney general
 has previously been provided such copies of pleadings, orders,
 judgments, or notices in the same action by certified mail, in
 which case subsequent mailings may be made by regular mail.
 Failure to provide the required mailings to the attorney
 general shall not be grounds for dismissal of an action under
 this chapter, but shall be grounds for a subsequent action by
 the attorney general to vacate or modify the judgment.
    Sec. 7.  NEW SECTION.  714H.7  CLASS ACTIONS.
    A class action lawsuit alleging a violation of this chapter
 shall not be filed with a court unless it has been approved by
 the attorney general.  The attorney general shall approve the
 filing of a class action lawsuit alleging a violation of this
 chapter unless the attorney general determines that the
 lawsuit is frivolous.  This section shall not affect the
 requirements of any other law or of the Iowa rules of civil
 procedure relating to class action lawsuits.
    Sec. 8.  NEW SECTION.  714H.8  SEVERABILITY CLAUSE.
    If any provision of this chapter or its application to any
 person or circumstances is held invalid, the invalidity does
 not affect other provisions or applications of this chapter
 that can be given effect without the invalid provision or
 application, and to this end the provisions of this chapter
 are severable.
    Sec. 9.  APPLICABILITY.  This Act applies to causes of
 actions accruing on or after the effective date of this Act.


                                                             
                               PATRICK J. MURPHY
                               Speaker of the House


                                                             
                               JOHN P. KIBBIE
                               President of the Senate

    I hereby certify that this bill originated in the House and
 is known as House File 712, Eighty=third General Assembly.


                                                             
                               MARK BRANDSGARD
                               Chief Clerk of the House
 Approved                , 2009


                            
 CHESTER J. CULVER
 Governor

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