Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. Colo.: Used car buyer must show public impact of deceptive trade practices claims, (Mar 6, 2015)

By Linda O’Brien, J.D., LL.M.

In a consumer’s action against an automobile dealer in relation to the failed financing of her purchase a used automobile, the consumer was required to show that the dealer’s alleged deceptive trade practices significantly impacted the public as an element of her claims, the federal district court in Denver has ruled. Thus, the consumer’s motions for determination of a question of law regarding public impact and certification of a question of law to the Colorado Supreme Court were denied (Bernal v. Maximum Auto Search Corporation, March 5, 2015, Babcock, L.). 

In 2014, Trinia Bernal purchased a used vehicle from Maximum Auto Search Corporation, signed a retail installment sales contact (RISC), and paid $4,200 toward the purchase of the car. The RISC was later assigned to Lobel Financing. After Lobel refused to finance the transaction, Maximum gave Bernal the opportunity to pay the balance of the purchase price. When Bernal failed to do so, Maximum repossessed the car.

After Maximum did not return her down payment, Bernal filed suit against Maximum and its surety company, alleging, in part, violations of the Colorado Consumer Protection Act (CCPA). Bernal moved for a determination that the public impact element of a CCPA claim was not applicable to her particular claim. She also sought to certify the question to the state supreme court.

The CCPA establishes a private action to recover damages against any person who has engaged in any deceptive trade practice that significantly impacts the public and caused the plaintiff injury-in-fact, the court explained. The plaintiff’s argument that she was not required to show public impact for her claims because the CCPA addressed specific consumer transactions in specific industries was rejected. The court noted that the plaintiff failed to cite case law or legislative history in support of her argument.

The court determined that state case law long recognized that the CCPA was enacted to control various deceptive trade practices in dealing with the public. The elimination of the public impact element for certain CCPA claims would run contrary to the overall purpose of the statute and improperly expand its scope to encompass purely private wrongs. Furthermore, the state supreme court’s analysis in Hall v. Walter, 969 P.2d. 224 (1998), of the requirements for a private action under the CCPA applied equally to all private claims regardless of the particular provision that the defendant purportedly violated.

The plaintiff’s argument that she could demonstrate public impact via legislative declaration was also rejected. In Hall, the Colorado Supreme Court stated that, under the CCPA, it was insufficient that the defendant’s industry affected the public interest, rather the challenged practice must significantly impact the public, according to the court. In this case, there was no reference in the CCPA to Maximum’s alleged practices – misrepresenting that the plaintiffs’ credit had been approved, demanding additional funds for the purchase, and failing to return her down payment. Thus, the plaintiff must prove all elements of a CCPA claim, including public impact, and her motion to certify the question to the state supreme court was denied.

The case is No. 14-cv-01596-LTB-MEH.

Attorneys: Susan G. Thomas (Wynkoop Law Office, PLLC) for Trinia Bernal. Marc Bennett Tull (Marc B. Tull, PC) for Maximum Auto Search Corp. and Western Surety Corporation.

Companies: Maximum Auto Search Corporation; Western Surety Corporation

Cases: StateUnfairTradePractices ColoradoNews