Senate Study Bill 1081
SENATE/HOUSE FILE
BY (PROPOSED ATTORNEY
GENERAL BILL)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act creating a private cause of action for certain consumer
2 fraud violations.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 1105DP 82
5 rh/gg/14
PAG LIN
1 1 Section 1. NEW SECTION. 714F.1 TITLE.
1 2 This chapter shall be known and may be cited as the
1 3 "Private Remedy for Consumer Fraud Act".
1 4 Sec. 2. NEW SECTION. 714F.2 DEFINITIONS.
1 5 1. "Advertisement" means the same as defined in section
1 6 714.16.
1 7 2. "Agricultural merchandise" means merchandise sold to be
1 8 used in the production of agricultural, horticultural,
1 9 viticultural, or dairy products; of livestock, wildlife,
1 10 poultry, bees, or fish, or products thereof; or of any and all
1 11 products raised or produced on farms.
1 12 3. "Consumer" means any of the following:
1 13 a. A natural person or the person's legal representative.
1 14 b. In connection with the advertisement, sale, or lease of
1 15 agricultural merchandise or office supplies or services, or
1 16 the solicitation of contributions for charitable purposes, a
1 17 partnership, corporation, company, trust, business entity or
1 18 association, political organization as defined in section
1 19 13C.1, religious organization as defined in section 13C.1,
1 20 public or nonpublic school, college, university, or a
1 21 fraternal benefit society as defined in section 512B.3.
1 22 4. "Consumer merchandise" means merchandise offered for
1 23 sale or lease, or sold or leased, primarily for personal,
1 24 family, or household purposes; agricultural merchandise; or
1 25 office supplies and services.
1 26 5. "Deception" means the same as defined in section
1 27 714.16.
1 28 6. "Merchandise" means the same as defined in section
1 29 714.16.
1 30 7. "Office supplies and services" means any goods, or
1 31 services incident to the use of such goods, including but not
1 32 limited to supplies and equipment and promotional advertising,
1 33 to be used in the operation of any office. "Office supplies
1 34 and services" does not include goods or services purchased for
1 35 the purpose of resale.
2 1 8. "Person" means the same as defined in section 714.16.
2 2 9. "Sale" means any sale or offer for sale of consumer
2 3 merchandise for cash or credit.
2 4 10. "Unfair practice" means the same as defined in section
2 5 714.16.
2 6 Sec. 3. NEW SECTION. 714F.3 PROHIBITED PRACTICES.
2 7 1. A person shall not engage in an unfair practice,
2 8 deception, fraud, false pretense, false promise, or
2 9 misrepresentation, or the concealment, suppression, or
2 10 omission of a material fact with the intent that others rely
2 11 upon the concealment, suppression, or omission, in connection
2 12 with the advertisement, sale, or lease of consumer
2 13 merchandise, or the solicitation of contributions for
2 14 charitable purposes.
2 15 2. A person shall not engage in any practice that is in
2 16 violation of any of the following:
2 17 a. Chapter 126.
2 18 b. Section 321.69.
2 19 c. Chapter 516D.
2 20 d. Section 516E.5, 516E.9, or 516E.10.
2 21 e. Chapter 555A.
2 22 f. Section 714.16, subsection 2.
2 23 g. Chapter 714A.
2 24 Sec. 4. NEW SECTION. 714F.4 PRIVATE CAUSE OF ACTION.
2 25 1. A consumer who suffers damage or injury as the result
2 26 of a practice declared to violate this chapter may bring an
2 27 action at law to recover actual damages. The court may order
2 28 such equitable relief as it deems necessary to protect the
2 29 public from further violations, including temporary and
2 30 permanent injunctive relief.
2 31 2. If the court finds that a person has violated this
2 32 chapter, the court shall award to the consumer the costs of
2 33 the action and to the consumer's attorneys their reasonable
2 34 fees. Reasonable attorney fees shall be determined by the
2 35 value of the time reasonably expended by the attorney and not
3 1 by the amount of the consumer's recovery.
3 2 3. Any claim under this section shall be required to be
3 3 proved by a preponderance of the evidence.
3 4 4. If the finder of fact finds that a practice declared to
3 5 violate this chapter is willful, in addition to an award of
3 6 actual damages, statutory damages of up to three times the
3 7 amount of actual damages may be awarded to a prevailing
3 8 consumer.
3 9 5. This section shall not affect a consumer's right to
3 10 seek relief under any other theory of law.
3 11 Sec. 5. NEW SECTION. 714F.5 ATTORNEY GENERAL
3 12 NOTIFICATION.
3 13 1. A party filing a petition, counterclaim,
3 14 cross=petition, or pleading in intervention alleging a
3 15 violation under this chapter, within seven days following the
3 16 date of filing such pleading, shall provide a copy to the
3 17 attorney general and, within seven days following entry of any
3 18 final judgment in the action, shall provide a copy of the
3 19 judgment to the attorney general.
3 20 2. A party appealing to district court a small claims
3 21 order or judgment involving an issue raised under this
3 22 chapter, within seven days of giving oral or written notice of
3 23 the appeal, shall notify the attorney general in writing and
3 24 provide a copy of the pleading raising the issue and a copy of
3 25 the small claims court order or judgment.
3 26 3. Except for appeals of small claims court orders or
3 27 judgments described in subsection 2, a party appealing an
3 28 order or judgment involving an issue raised under this
3 29 chapter, within seven days following the date such notice of
3 30 appeal is filed with the court, shall notify the attorney
3 31 general in writing and provide a copy of the pleading raising
3 32 the issue and a copy of the court order or judgment being
3 33 appealed.
3 34 4. Upon timely application to the court in which an action
3 35 involving an issue raised under this chapter is pending, the
4 1 attorney general may intervene as a party at any time or may
4 2 be heard at any time. The attorney general's failure to
4 3 intervene shall not preclude the attorney general from
4 4 bringing a separate enforcement action.
4 5 5. All copies of pleadings, orders, judgments, and notices
4 6 required by this section to be sent to the attorney general
4 7 shall be sent by certified mail unless the attorney general
4 8 has previously been provided such copies of pleadings, orders,
4 9 judgments, or notices in the same action by certified mail, in
4 10 which case subsequent mailings may be made by regular mail.
4 11 Failure to provide the required mailings to the attorney
4 12 general shall not be grounds for dismissal of an action under
4 13 this chapter, but shall be grounds for a subsequent action by
4 14 the attorney general to vacate or modify the judgment.
4 15 EXPLANATION
4 16 This bill creates a private remedy for certain consumer
4 17 fraud Act violations.
4 18 The bill creates a private cause of action for consumer
4 19 fraud violations. The bill provides that a consumer who
4 20 suffers damage or injury as a result of a prohibited practice
4 21 declared to violate the bill may bring an action at law to
4 22 recover actual damages, and may seek court protection from
4 23 further violations, including temporary and permanent
4 24 injunctive relief. In addition, a prevailing consumer in such
4 25 an action may be awarded costs and reasonable attorney fees.
4 26 The bill defines a prohibited practice to include an unfair
4 27 practice, deception, fraud, false pretense, false promise, or
4 28 misrepresentation, or the concealment, suppression, or
4 29 omission of a material fact with the intent that others rely
4 30 on the concealment, suppression, or omission, in connection
4 31 with the advertisement, sale, or lease of consumer
4 32 merchandise, or the solicitation of contributions for
4 33 charitable purposes.
4 34 The bill authorizes the attorney general to oversee private
4 35 consumer fraud actions, including small claims court actions,
5 1 by requiring a party filing a petition, counterclaim,
5 2 cross=petition, or pleading in intervention alleging a
5 3 violation under the bill to provide a copy of the relevant
5 4 documents, including judgments and notices of appeal, to the
5 5 attorney general. In addition, the attorney general may
5 6 intervene as a party in a private consumer fraud action at any
5 7 time, or may be heard in such an action at any time.
5 8 The bill further provides that failure to provide all
5 9 mailings of petitions, orders, judgments, and notices of
5 10 appeal to the attorney general shall not be grounds for
5 11 dismissal, but shall be grounds for a subsequent action by the
5 12 attorney general to vacate or modify the judgment.
5 13 LSB 1105DP 82
5 14 rh:rj/gg/14.1