Can our contract make the customer waive Rhode Island consumer-protection rights?
No Rhode Island statute voiding such a waiver was found, and for most defendants the waiver clause is beside the point, because § 6-13.1-4 takes the entire Act away. Chapter 6-13.1 (the “Unfair Trade Practice and Consumer Protection Act”, § 6-13.1-11) declares unlawful “Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce” (§ 6-13.1-2), and § 6-13.1-5.2(a) gives a private action to a person who buys or leases goods or services “primarily for personal, family, or household purposes” and suffers an “ascertainable loss”, “to recover actual damages or five hundred dollars ($500), whichever is greater”, with discretionary treble damages, class relief under (b) and discretionary “reasonable attorney’s fees and costs” under (d). But § 6-13.1-4(a) says “Nothing in this chapter shall apply to actions or transactions permitted under laws administered by the department of business regulation or other regulatory body or officer acting under statutory authority of this state or the United States”, and Rhode Island reads that at its widest: in State v. Piedmont Funding Corp. the Court held the Legislature “clearly exempted from the Act all those activities and businesses which are subject to monitoring by state or federal regulatory bodies or officers”, and put the burden on the claimant to show “that the specific acts at issue are not covered by the exemption” once the defendant shows general regulation. In Lynch v. Conley the Attorney General asked the Court to abandon that reading and it refused: “Our holdings on this issue have been uniform for more than twenty-five years”, and “[a]ny argument in favor of amending the breadth and scope of the DTPA exemption should be made to the General Assembly and not this Court.” The exemption has swallowed a national bank’s credit-card solicitations (Chavers v. Fleet Bank) and lead-paint disclosure on a house sale (Lynch). Note the asymmetry: the two-part showing in § 6-13.1-4(b) applies by its own words only “[f]or actions brought by the attorney general”.
The trap
Three Rhode Island-specific things kill the consumer claim before the waiver clause is ever read. First, the exemption is a regulated-industry exemption, not a compliance defence: against a private plaintiff § 6-13.1-4(a) is unqualified, and the (b) requirement that the defendant show its conduct was “in compliance with orders, including insurance bulletins, or rules of, or a statute administered by, a federal or state government agency” is expressly limited to Attorney General actions, so a business that is merely monitored can invoke (a) against a consumer without proving compliance with anything. Second, only a household consumer has standing: “The plaintiff, a Rhode Island corporation doing business as a video store, plainly does not have standing to bring a private action under this statute” (ERI Max Entertainment, Inc. v. Streisand), reaffirmed against an LLC in Premier Home Restoration, LLC v. Federal National Mortgage Association, so a B2B “consumer-protection waiver” clause in a Rhode Island contract is protecting against a claim that could not be brought. Third, the Act is read through federal eyes: § 6-13.1-3 directs that “due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to § 5(a) of the Federal Trade Commission Act.” What this rule does NOT establish is that the waiver is good: no Rhode Island decision located has ever enforced or struck a waiver of chapter 6-13.1 rights. Nor does the exemption touch the ordinary contract claim riding beside the statutory one: in Chavers the Court affirmed the dismissal of the chapter 6-13.1 count and still reversed in part and remanded “for further proceedings on the plaintiffs’ breach of contract claim”. And in ERI Max the standing holding was alternative: the Court went on, “[a]ssuming that plaintiff did have such standing”, to hold the conduct outside the Act's definition.
22 authorities
- statuteR.I. Gen. Laws § 6-13.1-2enactment date not established
The words that state the rule
Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are declared unlawful.
- statuteR.I. Gen. Laws § 6-13.1-11enactment date not established
The words that state the rule
This chapter shall be known and designated as the “Unfair Trade Practice and Consumer Protection Act.”
- statuteR.I. Gen. Laws § 6-13.1-4enactment date not established
The words that state the rule
Nothing in this chapter shall apply to actions or transactions permitted under laws administered by the department of business regulation or other regulatory body or officer acting under statutory authority of this state or the United States.
- statuteR.I. Gen. Laws § 6-13.1-4enactment date not established
The words that state the rule
For actions brought by the attorney general, the exemption in subsection (a) applies only if the person claiming the exemption shows that: (1) The person’s business activities are subject to regulation by a state or federal agency; and (2) The activity or conduct is in compliance with orders, including insurance bulletins, or rules of, or a statute administered by, a federal or state government agency.
- statuteR.I. Gen. Laws § 6-13.1-5.2enactment date not established
The words that state the rule
Any person who purchases or leases goods or services primarily for personal, family, or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act, or practice declared unlawful by § 6-13.1-2, may bring an action under the rules of civil procedure in the superior court of the county in which the seller or lessor resides; is found; has his or her principal place of business or is doing business; or in the superior court of the county as is otherwise provided by law, to recover actual damages or five hundred dollars ($500), whichever is greater.
- statuteR.I. Gen. Laws § 6-13.1-5.2enactment date not established
The words that state the rule
The court may award damages equal to three (3) times the amount of actual damages and, in its discretion, provide other equitable relief that it deems necessary or proper.
- statuteR.I. Gen. Laws § 6-13.1-5.2enactment date not established
The words that state the rule
Persons entitled to bring an action under subsection (a) of this section may, if the unlawful method, act, or practice has caused similar injury to numerous other persons similarly situated and if they adequately represent the similarly situated persons, bring an action on behalf of themselves and other similarly injured and situated persons
- statuteR.I. Gen. Laws § 6-13.1-5.2enactment date not established
The words that state the rule
In any action brought by a person under this section, the court may award, in addition to the relief provided in this section, reasonable attorney’s fees and costs.
- statuteR.I. Gen. Laws § 6-13.1-3enactment date not established
The words that state the rule
It is the intent of the legislature that in construing §§ 6-13.1-1 and 6-13.1-2 due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to § 5(a) of the Federal Trade Commission Act.
- statuteR.I. Gen. Laws § 6-13.1-1_6-13.1-1_6-13.1-1enactment date not established
The words that state the rule
“Trade” and “commerce” mean the advertising, offering for sale, sale, or distribution of any services and any property, tangible or intangible, real, personal, or mixed, and any other article, commodity, or thing of value wherever situate, and include any trade or commerce directly or indirectly affecting the people of this state.
- statuteR.I. Gen. Laws § 6-13.1-1_6-13.1-1_6-13.1-1enactment date not established
The words that state the rule
(xiii) Engaging in any act or practice that is unfair or deceptive to the consumer; (xiv) Using any other methods, acts, or practices that mislead or deceive members of the public in a material respect;
The words that state the rule
Giving the language of §6-13.1-4 its plain meaning, we conclude that the Legislature clearly exempted from the Act all those activities and businesses which are subject to monitoring by state or federal regulatory bodies or officers.
The words that state the rule
When the party claiming exemption from the Act shows that the general activity in question is regulated by a “regulatory body or officer” within the meaning of §6-13.1-4, the opposing party, in this case the state of Rhode Island, then has the burden of showing that the specific acts at issue are not covered by the exemption.
The words that state the rule
Thus, step one of the exemption analysis reqinres the party claiming the exemption to demonstrate that the general activities complained of are subject to monitoring or regulation by a state or federal government agency. If a court determines that the activities are so regulated, the burden shifts to the party seeking to enforce the DTPA to establish that “the specific acts at issue are not covered by the exemption.
The words that state the rule
Our holdings on this issue have been uniform for more than twenty-five years, and we discern no reason to rule otherwise. Accordingly, consistent with the doctrine of stare decisis, we adhere to the analytical framework developed through our jurisprudence. Any argument in favor of amending the breadth and scope of the DTPA exemption should be made to the General Assembly and not this Court.
The words that state the rule
We are satisfied that the DTPA’s statutory exemption applies in this instance. Lead paint disclosure in connection with the sale of residential real estate, already is comprehensively regulated by the state and federal government.
The words that state the rule
Applying the two-step analysis set forth in Piedmont Funding and its progeny, it is clear that Fleet’s credit-card solicitations fall squarely within the exception to the DTPA.
The words that state the rule
The plaintiff, a Rhode Island corporation doing business as a video store, plainly does not have standing to bring a private action under this statute.
- caseNo. 2019-24-Appeal.Premier Home Restoration, LLC v. Federal National Mortgage AssociationR.I.decided 2021
The words that state the rule
The plaintiff is a Rhode Island limited liability company. Therefore, the plaintiff did not have standing to bring this claim under the Act against the defendants, and we affirm the granting of the motion for judgment on the pleadings on this count alone.
The words that state the rule
The plaintiffs appeal is denied and dismissed and the judgment appealed from is affirmed. Mr. Justice Paolino participated in the decision but retired prior to its announcement.
The words that state the rule
Conclusion For the reasons stated herein, we affirm in part and reverse in part the judgment of the Superior Court. The record shall be remanded to the Superior Court for further proceedings on the plaintiffs’ breach of contract claim.
The words that state the rule
Assuming that plaintiff did have such standing, we conclude that the behavior complained of does not meet the definition of “ ‘[u]nfair methods of competition and unfair or deceptive acts or practices’ ” set forth in § 6-13.1-1(5) of the act.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.