The Pennsylvania Supreme Court recently held that the state's consumer protection statute (CPL) imposes strict liability upon providers of goods and services for any conduct that has any "likelihood of confusion or misunderstanding," regardless of whether the seller actually intended to defraud, confuse or deceive the customer.  Gregg v. Ameriprise Financial, Inc. arose from Plaintiffs' purchase of various life insurance and retirement investments from a financial advisor and insurance salesperson for Ameriprise Financial, Inc.  Unbeknownst to Plaintiffs, the salesperson redirected certain of Plaintiffs' funds to various commission-earning retirement products instead of the new life insurance policy where he told Plaintiffs the funds would be applied.  When Plaintiffs learned about that conduct, they filed a lawsuit asserting common law claims for fraudulent and negligent misrepresentation, as well as a claim under the CPL, which prohibits a seller of goods or services from "engaging in any fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding."

The jury returned a verdict for the defendants on the fraudulent and negligent misrepresentation claims, but the trial court ruled in Plaintiffs' favor on the CPL claim.  Ameriprise moved for post-trial relief, arguing that Plaintiffs failed to prove the salesperson's misrepresentations were at least negligent.  The trial court disagreed, reasoning that it was not necessary for Plaintiffs to succeed on their common law claims in order to prevail on a CPL claim, and that the test for "deceptive conduct" under the CPL merely is whether the conduct has the tendency or capacity to deceive, regardless of Defendant's actual intention or state of mind.

Both the intermediate appellate and Supreme Court agreed with the trial court.  The Supreme Court specifically held that "deceptive conduct under the CPL is not dependent in any respect upon proof of the actor's state of mind," and offered several reasons for that conclusion.  First, the CPL is a remedial statute intended to "benefit the public at large by eradicating, among other things, 'unfair or deceptive' business practices."  As such, it must be construed liberally.  Second, other courts and jurisdictions have not construed "deceptive conduct" to require a culpable state of mind.  The original language of the pertinent section of Pennsylvania's CPL prohibited only "engaging in any fraudulent conduct which creates a likelihood of confusion or misunderstanding."  Thus, when the legislature added "deceptive" conduct to that section in 1996, it must have intended to remove any state of mind requirement.  Finally, other sections of the CPL specifically include intent requirements.  Hence, the Supreme Court reasoned that if the legislature wanted intent to be an element of a CPL violation, it knew how to do that.

The potential CPL exposure for providers of aircraft goods and services in Pennsylvania is manifest.  A seller or manufacturer's innocent representation about the performance characteristic of a particular engine or airframe component that is not achieved in flight could be actionable under the CPL.  So too could a licensed mechanic's logbook entry certifying airworthiness expose him or her to treble damages and attorneys' fees, if proven not to be 100% accurate.  As several amici ("friends" of the Court, including the Pennsylvania Coalition for Civil Justice Reform, American Property Casualty Insurance Association and Pennsylvania Manufacturer's Association) argued in Gregg, CPL liability in Pennsylvania now appears to be virtually unlimited.  With the highest court in Pennsylvania having ruled upon this issue, the only relief appears to be with the state legislature.  In the interim, sellers of consumer goods and services should exercise extreme caution when communicating with customers. Gregg v. Ameriprise Financial, Inc., No. 29 WAP 2019 (Pa. Feb. 17, 2021).

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