MIAMI BUSINESS LITIGATION: DEFENDING AGAINST CLAIMS ALLEGING DECEPTIVE OR UNFAIR TRADE PRACTICES

Florida’s Deceptive and Unfair Trade Practices Act, often called “FDUPTA,” prohibits certain deceptive and unfair trade practices. In Bookworld Trade, Inc. v. Daughters of St. Paul, Inc., 532 F.Supp.2d 1350 (M.D. Fla. 2007), the United States District Court for the Middle District of Florida explained that “[a] deceptive practice is one that is likely to mislead consumers, and an unfair practice is one that ‘offends established public policy’ or is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.'” To establish a cause of action under FDUPTA, a plaintiff must establish the following three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages. Peter Mavrick a Miami business litigation attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

In business litigation where FDUPTA claims are based on alleged fraudulent acts, some defendants have successfully argued the plaintiff must plead the claim with specificity. In Blair v. Wachovia Mortg. Corp., 2012 WL 868878 (M.D. Fla. Mar. 14, 2012), the federal court held, “this Court concludes that where the gravamen of the [FDUPTA] claim sounds in fraud, as here, the heightened pleading standard of Rule 9(b) would apply.” In Pop v. Lulifama.com LLC, 2023 WL 4661977 (M.D. Fla. July 20, 2023), the federal court explained that: “This Court, however, applies the heightened pleading standards to FDUPTA allegations sounding in fraud…Here, Mr. Pop alleges that both the Luli Fama and Influencer Defendants engaged in ‘a deceptive act or unfair practice’ by ‘engaging in fraud and statutory violations.’ … Mr. Pop’s FDUPTA claim sound in fraud as it avers ‘unscrupulous [practices] … likely to mislead any consumer acting reasonably in the circumstances.’ … Therefore, Rule 9(b)’s heightened pleading standard applies.” The United States Court of Appeals for the Eleventh Circuit, in Garvield v. NDS Health Corp., 466 F.3d 1255 (11th Cir. 2006), explained that this heightened pleading standard governing fraud claims requires a plaintiff allege with particularity the “who, what, when, where, and how” of the alleged fraudulent misconduct. However, not all courts agree that FDUPTA claims alleging fraudulent conduct must be pled with specificity. For example, the United States District Court for the Middle District of Florida, in Allstate Ins. Co. v. Auto Glass Am, LLC, 418 F.Supp.3d 1009 (M.D. Fla. 2019), stated that, “[a]s a threshold matter, this Court declines to impose the heightened pleading standard set forth in Rule 9(b).”

Regardless of whether there is a heightened pleading standard for FDUPTA claims based on fraud, the plaintiff has the legal burden to prove certain elements. The “deceptive or unfair practice” element of a FDUPTA claim can be proved in two ways. The first way is by proving a violation of “any rules promulgated pursuant to the Federal Trade Commission Act” or “any law, statute, regulation, or ordinance which proscribes unfair methods of competition, or unfair, deceptive, or unconscionable acts or practices” (under Florida Statute Section 501.203(3)(a), (c)). The second way, as explained by Blair v. Wachovia Mortg. Corp., 2012 WL 868878 (M.D. Fla. Mar. 14, 2012), is by proving that “there is a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment.” The plaintiff also must prove that the unfair practice at issue caused his allege harm. Florida’s Fourth District Court of Appeal, in Stewart Agency, Inc. v. Arrigo Enterprises, Inc., 266 So.3d 207 (Fla. 4th DCA 2019), explained that “[c]ausation under FDUPTA must be direct, rather than remote or speculative.” The United States Court of Appeals for the Eleventh Circuit held, in Fitzpatrick v. Gen Mills, Inc., 635 F.3d 1279 (11th Cir. 2011), that the element of causation is met when the alleged misrepresentations would have deceived an objectively reasonable person. Where the harm does not result from the FDUPTA violation, the claim fails for lack of causation.

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.