General Assembly: 83 (2009 Regular GA) - Chapter 167 - Consumer fraud — private right of action


Published: 2009-05-26

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671 LAWS OF THE EIGHTY-THIRD G.A., 2009 SESSION CH. 167

CH. 167CH. 167

CHAPTER 167 CONSUMER FRAUD — PRIVATE RIGHT OF ACTION

H.F. 712

AN ACT relating to a private right of action for certain consumer fraud violations and includ- ing 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 prohibit-

ed practice or act that are reasonably ascertainable in amount. “Actual damages” does not in- cludedamages 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. “Consumermerchandise”meansmerchandise 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 tomislead a substantial number of con-

sumers 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 misrepre- sentation, concealment, suppression, or omission of amaterial fact, with the intent that others rely upon the unfair practice, deception, fraud, false pretense, false promise, misrepresenta- tion, 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 in- clude solicitationsmade onbehalf of a political organization as defined in section 13C.1, solici- tations 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 solicita- tions made on behalf of a nonprofit foundation benefiting a state, regionally, or nationally ac- credited 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.

672LAWS OF THE EIGHTY-THIRD G.A., 2009 SESSIONCH. 167

Sec. 4. NEW SECTION. 714H.4 EXCLUSIONS. 1. This chapter shall not apply to any of the following: a. Merchandiseofferedorprovidedbyanyof the followingpersons, includingbusiness enti-

ties 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 institutionswhich 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. Advertisingby a retailer for a product, other thanadrugor other product claiming tohave

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 connectionwith 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 ap- pears, or the radio station, television station, or other electronicmediawhich 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 applica-

ble 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 andwho does not receivemon- etary 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 ormore industrial loan licenses pursuant to chapter 536A and

employing fewer than sixty full-time employees or a corporation holding one or more regulat- ed 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, ad- justments, 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 ex- ceed three hundred dollars or ten percent of the actual cost to a retailer including freight of themerchandise,whichever is less, provided that the seller posts in a conspicuous placenotice that repairs, adjustments, or replacements will be disclosed upon request. The exclusion pro-

673 LAWS OF THE EIGHTY-THIRD G.A., 2009 SESSION CH. 167

vided in this subsection does not apply to the concealment, suppression, or omission of amate- rial fact if the purchaser requests disclosure of any repair, adjustment, or replacement.

Sec. 5. NEW SECTION. 714H.5 PRIVATE RIGHT OF ACTION. 1. A consumerwho suffers an ascertainable loss ofmoney or property as the result of a pro-

hibited practice or act in violation of this chapter may bring an action at law to recover actual damages. The courtmay order such equitable relief as it deemsnecessary 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 ac-

tual damages, the court shall award to the consumer the costs of the action and to the consum- er’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 cli-

ent. l. Attorney fee awards in similar cases. 3. In order to recover damages, a claim under this section shall be proved by a preponder-

ance of the evidence. 4. If the finder of fact finds by a preponderance of clear, convincing, and satisfactory evi-

dence that a prohibited practice or act in violation of this chapter constitutes willful and wan- ton 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 pre- vailing 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 froma bona fide error notwithstanding themaintenance of proce- dures 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 suchpleading, shall provide a copy to the attorney general and,within sevendays follow- ing entry of any final judgment in the action, shall provide a copy of the judgment to the attor- ney 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.

674LAWS OF THE EIGHTY-THIRD G.A., 2009 SESSIONCH. 167

3. Aparty appealing anorder or judgment involvingan issue raisedunder this chapter,with- in 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 certifiedmail unless the attorney general has previous- ly been provided such copies of pleadings, orders, judgments, or notices in the same action by certifiedmail, inwhich case subsequentmailingsmay bemade by regularmail. Failure to pro- vide the required mailings to the attorney general shall not be grounds for dismissal of an ac- tion 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 filedwith 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 deter- mines 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 anyprovisionof this chapter or its application to anypersonor circumstances is held inval-

id, the invalidity does not affect other provisions or applications of this chapter that can be giv- en 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 ef- fective date of this Act.

Approved May 26, 2009

_________________________

CH. 168CH. 168

CHAPTER 168 PUBLIC POSTSECONDARY EDUCATION

ARTICULATION INFORMATION AND AGREEMENTS

H.F. 815

ANACT relating to articulation agreements between public postsecondary institutions and to the dissemination of articulation information.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1. Section 256.9, Code 2009, is amended by adding the following new subsection: NEWSUBSECTION. 61. Develop and implement a plan to provide, at least twice annually

to all principals and guidance counselors employed by school districts and accredited nonpub- lic schools, notice describing how students can find and use the articulation information avail- able on thewebsitemaintained by the state board of regents. The plan shall include suggested