Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—10th Cir.: Car dealership steers clear of Colorado CPA claims, (Mar 4, 2015)

By Greg Hammond, J.D.

Used car purchasers were not entitled to certification to the Colorado Supreme Court the question of whether a deceptive trade practice contained within the "specific provisions" of the Colorado Consumer Protection Act (CCPA) requires a separate showing of public impact. The U.S. Court of Appeals in Denver was not persuaded that the district court erred in finding that the element of significant public impact, created by the Colorado Supreme Court for CCPA claims, applies to a claim brought under Section 6-1-708(a) of the CCPA—"Motor vehicle sales and leases—deceptive trade practice" (Frias v. Chris The Crazy Trader, Inc., March 3, 2015, Baldock, B.).

Rafael Frias and Patricia Mendez-Manriquez accepted delivery of a used car from Chris The Crazy Trader, Inc., allegedly believing that financing for a loan was guaranteed. They subsequently entered into a new contract for a "better deal," still believing that financing was guaranteed, but they were later informed that financing was denied. After returning the vehicle, the dealer kept over half of their $1500 down payment for their temporary use of the car. However, the rest of the deposit was returned after Frias and Mendez-Manriquez filed suit, asserting a federal claim under the Truth in Lending Act, and state law claims under the CCPA and for civil theft. The district court denied the plaintiffs’ motion to certify a question of state law and granted partial summary judgment to the dealership on the state-law claims. The plaintiffs timely appealed.

CCPA claim. The plaintiffs only challenge the district court’s disposition of their CCPA claim, arguing that the district court erred: (1) in failing to find that a single violation of the deceptive trade practices provision of the CCPA is a per se violation of the CCPA, because it did not contain a public impact requirement; and (2) finding as a matter of law that twelve consumers affected by the same practice, out of 5739 car sales, was not enough to show sufficient public impact, because there is no mathematical formula for that determination, and because public impact is a disputed question of fact.

The district court originally rejected plaintiffs’ argument that the "public impact" element should not apply to an alleged violation of Section 6-1-708(1)(a), reasoning that although there is no Colorado case that expressly addresses whether the "public impact" element applies to an alleged violation of a "specific provision" in Part 7 of the CCPA, there is no indication that Colorado intends to make such a distinction in the elements of CCPA claims. The court also found that the plaintiffs failed to show the required public impact for their CCPA claim, as a matter of law, because the plaintiffs only demonstrated that 12 out of 5739 car sales involved the alleged practice of retaining a portion of the down payment after financing was not obtained, and there was no evidence that the dealership "guaranteed" financing.

The court of appeals rejected both of the plaintiffs’ arguments, noting that it was not persuaded that the lower court erred in concluding that the element of significant public impact established by the Colorado Supreme Court for CCPA claims applies to a claim brought under the specific deceptive trade practices provision in Section 6-1-708(a) of the CCPA. Further, the court was not persuaded that the lower court erred in concluding that the plaintiffs’ evidence was insufficient as a matter of law to show significant public impact. The district court’s grant of summary judgment was affirmed for substantially the same reasons set forth in the lower court’s opinion and order.

The case number is 14-1284.

Attorneys: Susan G. Thomas (Wynkoop & Thomas, PC) for Rafael Frias. Thomas A. Nolan (Beck, Jonson & Nolan) for Chris The Crazy Trader, Inc.

Companies: Chris The Crazy Trader, Inc.

Cases: StateUnfairTradePractices ColoradoNews KansasNews NewMexicoNews OklahomaNews UtahNews WyomingNews