All states have enacted statutes to protect fair trade. These state statutes are modeled after the Federal Trade Commission Act, which prohibits ‘‘unfair or deceptive acts or practices in or affecting commerce.” Minnesota’s unfair and deceptive trade practice statute was first enacted in 1973.
What is the purpose of unfair and deceptive trade practice laws?
These laws have two general purposes:
- protect companies from being victims of unfair competition, and
- protect consumers.
Usually, it is the companies that sue under deceptive trade practice laws. Companies have a substantial financial interest in preventing a competitor from engaging in unfair or deceptive competitive activities.
When consumers sue, it is often in a class action lawsuit because it is rare for an individual consumer to have sufficient harm to justify the legal costs necessary to bring a lawsuit. (Our firm represents companies in lawsuits—we do not do consumer cases.)
What are unfair and deceptive trade practices?
There are thirteen practices considered deceptive trade practices under the UDTPA:
When, in the course of business, a person
- Passes off goods or services as those of another
- Causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services
- Causes likelihood of confusion or of misunderstanding as to affiliation, connection, or association with, or certification by, another
- Uses deceptive representations or designations of geographic origin in connection with goods or services
- Represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not have
- Represents that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used, or secondhand
- Represents that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another
- Disparages the goods, services, or business of another by false or misleading representation of fact
- Advertises goods or services with intent not to sell them as advertised
- Advertises goods or services with intent not to supply a reasonable amount for public demand, unless the advertisement discloses a limitation of quantity;
- Makes false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions
- In attempting to collect delinquent accounts, implies or suggests that health care services will be withheld in an emergency situation
- Engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding.
In addition to injunctive relief, the court may award attorney’s fees to the prevailing party under two circumstances: 1) if the plaintiff has brought the claim knowing it to be groundless, or 2) the defendant has willfully engaged in the trade practice knowing it to be deceptive.
What are defenses to unfair and deceptive trade practice claims?
If a person engages in deceptive trade practices as part of personal activities, not in the course of business or trade, the statute generally does not apply.
A claim may also fail if the plaintiff fails to establish a causal connection. However, there is an exception to this: “In order to prevail in an action under sections 325D.43 to 325D.48, a complainant need not prove competition between the parties or actual confusion or misunderstanding.” See Minn. Stat. § 325D.44, subdiv. 2.
Further if the allegedly deceptive statement is in fact true, no claim exists. The burden is on the plaintiff to prove the falsity of statements allegedly disparaging the goods, services, or business of another by false or misleading representations of fact. Generally, there is a six year statute of limitations for claims.
What are the elements to prove a violation of this law?
The analysis for claims under the Minnesota Deceptive Trade Practices Act is much the same as that applied under the Lanham Act.
To establish a Lanham Act false advertising claim, a plaintiff must prove
- A false statement of fact by the defendant in a commercial advertisement about its own or another’s product
- The statement actually deceived or has the tendency to deceive a substantial segment of its audience
- The deception is material, in that it is likely to influence the purchasing decision
- The defendant caused its false statement to enter interstate commerce
- The plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a loss of goodwill associated with its products
However, when a competitor’s advertisement, particularly a comparative ad, is proved to be literally false, the court may presume that consumers were misled and force the defendant to terminate circulation of the offending advertisement, without requiring consumer surveys or other evidence of the ad’s impact on the buying public. Do note that when this principle applies in a Lanham Act dispute between competitors, the plaintiff “must show that it will suffer irreparable harm absent the injunction.”
What is the name of Minnesota’s unfair and deceptive trade practice law?
The official name for Minnesota’s law is the Uniform Deceptive Trade Practices Act (UDTPA). See Minn. Stat. § 325d.48. Attorneys often refer to this law as the Minnesota Deceptive Trade Practices Act or Minnesota Uniform Deceptive Trade Practices Act.
Where is Minnesota’s Uniform Deceptive Trade Practices Act?
The Minnesota Uniform Deceptive Trade Practices Act is provided in Minnesota Statutes sections 325d.43 to 325d.48:
- Minnesota Statutes section 325d.43: Definitions
- Minnesota Statutes section 325d.44: Deceptive Trade Practices
- Minnesota Statutes section 325d.45: Remedies
- Minnesota Statutes section 325d.46: Application
- Minnesota Statutes section 325d.47: Uniformity of Application and Construction
- Minnesota Statutes section 325d.48: Citation
What are examples of unfair and deceptive trade practices?
To help illustrate, here are some examples of violations of the Minnesota Deceptive Trade Practices Act:
- a business sells a refurbished computer marked as new
- a business sells a refurbished a car with the odometer rolled back
- someone sells purses that look like the Coach brand purses but are not made by Coach
- a business sells “extra-virgin olive oil” that contains only seed oil, chlorophyll, and beta-carotene to make it look and smell like the real thing
- a business sells “parmesan cheese” that contains no parmesan cheese
- a business spreads false rumors about a competitor
What kind of attorney should you seek when harmed?
If you are a consumer harmed by a violation of this statute, you should seek a “consumer class action law firm” to represent you.
If you are a business harmed by a violation of this statute, you will usually seek help from a business attorney experienced with unfair and deceptive trade practice lawsuits. Our firm represents parties located in Minnesota, harmed by a competitor in Minnesota, or with some other connection to Minnesota.
What should you consider before you file a UDTPA lawsuit?
Bringing a lawsuit involves a number of considerations including:
- Do you want to bring state claims, federal claims, or both?
- Do you want to bring the lawsuit in state or federal court?
- Are there common law claims you want to also include (e.g. general defamation, business defamation, business misrepresentation, fraud, unjust enrichment)?
- Are there other statutory claims you should include (e.g. Minnesota Trade Secrets Act, Minnesota Consumer Fraud Act, The Minnesota Antitrust Law of 1971, fiduciary duty laws, Minnesota Revised Uniform Limited Liability Company Act, Minnesota Business Corporation Act)?
- Do you have the means to afford a potentially lengthy lawsuit until a judge considers awarding attorney’s fees?
- How strong is your evidence of violations?
- Do you have evidence of damages from these violations or will you need an expert to establish damages?
- How strong is the narrative of your story—will it resonate with both the heart and mind of the judge?