Can a consumer contract route Washington Consumer Protection Act claims away from Washington courts or class relief?
Not where doing so defeats the Act, even though the CPA itself contains no antiwaiver provision. RCW 19.86.020 declares "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce ... unlawful", and any person injured in business or property by a violation of it may sue in superior court to enjoin further violations and recover actual damages, costs and a reasonable attorney's fee, with discretionary increased damages up to three times actual damages (for RCW 19.86.020 violations, not above twenty-five thousand dollars). The same section offers a district-court alternative (actual damages except those exceeding the RCW 3.66.020 limit, costs and reasonable fees, with increased damages likewise capped at twenty-five thousand dollars), and defines "person" to include "the counties, municipalities, and all political subdivisions of this state." In Dix the Supreme Court of Washington held that a forum selection clause, although prima facie valid, is invalid where it precludes class actions and thereby significantly impairs Washington citizens' ability to seek relief under the CPA for small-value claims, because that violates the public policy underlying the CPA's dual enforcement scheme of attorney-general and private actions.
The trap
Dix does not void every out-of-state forum clause in a consumer contract. The holding turns on two facts the court named: the chosen forum precluded class actions for small-value CPA claims, and there was no feasible alternative avenue for relief. The Court wrote the limit into its own holding: the clause is unenforceable "if the lack of a class action procedure leaves the plaintiff with no feasible avenue for seeking relief for violations of the CPA", and "where the value of an individual claim is significant or the absence of a class action option would not, when viewed objectively, be likely to deter an individual action, public policy does not defeat a forum selection clause." Everything else is judged by the ordinary standard, under which a forum-selection clause "is presumptively valid and enforceable and the party resisting it has the burden of demonstrating that it is unreasonable". And the narrowing is the disposition itself: the Court of Appeals had reversed on a broader public-policy ground and Dix affirmed it "but on narrower grounds", so the broader reading is not the law.
9 authorities
- statuteRCW 19.86.020enactment 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 hereby declared unlawful.
- statuteRCW 19.86.090enactment date not established
The words that state the rule
Any person who is injured in his or her business or property by a violation of RCW 19.86.020, 19.86.030, 19.86.040, 19.86.050, or 19.86.060, or any person so injured because he or she refuses to accede to a proposal for an arrangement which, if consummated, would be in violation of RCW 19.86.030, 19.86.040, 19.86.050, or 19.86.060, may bring a civil action in superior court to enjoin further violations, to recover the actual damages sustained by him or her, or both, together with the costs of the suit, including a reasonable attorney's fee. In addition, the court may, in its discretion, increase the award of damages up to an amount not to exceed three times the actual damages sustained: PROVIDED, That such increased damage award for violation of RCW 19.86.020 may not exceed twenty-five thousand dollars: PROVIDED FURTHER, That such person may bring a civil action in the district court to recover his or her actual damages, except for damages which exceed the amount specified in RCW 3.66.020, and the costs of the suit, including reasonable attorney's fees. The district court may, in its discretion, increase the award of damages to an amount not more than three times the actual damages sustained, but such increased damage award shall not exceed twenty-five thousand dollars. For the purpose of this section, "person" includes the counties, municipalities, and all political subdivisions of this state.
The words that state the rule
Although forum selection clauses are prima facie valid, a forum selection clause may be invalid if it violates the public policy of this state. A decision regarding the enforceability of a forum selection clause is evaluated for an abuse of discretion. If a forum selection clause precludes class actions and thereby significantly impairs Washington citizens’ ability to seek relief under the CPA for small-value claims, the clause violates the public policy underlying the CPA’s dual enforcement scheme expressed in the attorney general and private rights of action under the act. Because AOL’s forum selection clause precludes class actions for small-value CPA claims and there is no feasible alternative *843 avenue for seeking relief on such claims, the forum selection clause is invalid and unenforceable and dismissal was an abuse of discretion. We affirm the Court of Appeals.
The words that state the rule
The trial court dismissed the action on the basis that the forum selection *829 clause requires suit to be brought in Virginia. On appeal, the Court of Appeals reversed, holding that the forum selection clause is unenforceable because the selected forum does not permit class suits, thus violating public policy underlying the CPA. We affirm the Court of Appeals, but on narrower grounds.
The words that state the rule
We affirm the Court of Appeals’ holding that the forum selection clause in the AOL contract at issue is unenforceable on public policy grounds if the lack of a class action procedure leaves the plaintiff with no feasible avenue for seeking relief for violations of the CPA. Thus, for example, where the value of an individual claim is significant or the absence of a class action option would not, when viewed objectively, be likely to deter an individual action, public policy does not defeat a forum selection clause.
The words that state the rule
(1) [A] forum-selection clause is presumptively valid and enforceable and the party resisting it has the burden of demonstrating that it is unreasonable, (2) a court may deny enforcement of such a clause upon a clear showing that, in the particular circumstance, enforcement would be unreasonable, and (3) the clause may be found to be unreasonable if (i) it was induced by fraud or overreaching, (ii) the contractually selected forum is so unfair and inconvenient as, for all practical purposes, to deprive the plaintiff of a remedy or of its day in court, or (iii) enforcement would contravene a strong public policy of the State where the action is filed. Gilman v. Wheat, First Sec., Inc., 345 Md. 361, 378 , 692 A.2d 454 (1997) (discussing Bremen, Carnival Cruise Lines, and their progeny). *835 ¶17 We agree with this analysis, which is generally in agreement with statements in this state’s appellate decisions.
- statuteRCW 19.86.090enactment date not established
The words that state the rule
Application—2009 c 371: "This act applies to all causes of action that accrue on or after July 26, 2009." [ 2009 c 371 s 3.]
- statuteRCW 19.86.920enactment date not established
The words that state the rule
To this end this act shall be liberally construed that its beneficial purposes may be served. It is, however, the intent of the legislature that this act shall not be construed to prohibit acts or practices which are reasonable in relation to the development and preservation of business or which are not injurious to the public interest, nor be construed to authorize those acts or practices which unreasonably restrain trade or are unreasonable per se. [ 1985 c 401 s 1; 1983 c 288 s 4; 1983 c 3 s 25; 1961 c 216 s 20.]
The words that state the rule
AOL points out, however, that unlike California’s consumer protection law, which contains an antiwaiver provision applying to class actions, this state’s CPA does not contain an antiwaiver provision. We do not believe that the absence of an express class action antiwaiver provision in the CPA undercuts the public policy expressed in the dual enforcement scheme enacted by the legislature.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.