Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—IdahoSupCt: Well Driller Liable For Misleading Customers About Drilling Depth , (Jan 24, 2013)

By Jody Coultas, J.D.

The Idaho Supreme Court has held that well drilling company Gary Duspiva Well Drilling & Development violated the Idaho Consumer Protection Act (CPA) by recommending and providing unnecessary services and engaging in misleading and unconscionable acts (Duspiva v. Fillmore, January 23, 2013, Jones, J.).

Home owners contracted with the well driller for a domestic well for a single-family residence. The proposed well was 200 feet deep and a State Card submitted to the Idaho Department of Water Resources required the driller to stop work if the bottom hole reached 85 degrees Fahrenheit. The driller encountered 85 degree water at 600 feet, but did not cease drilling. After a dispute arose between the parties, the driller filed claims to recover money owed for services. The home owners counterclaimed, alleging that the driller violated the CPA.

An Idaho district court found that the driller violated the CPA noting that the home owners had no reason to expect to pay for any work done to drill past 200 feet and that there was no reason for the driller to dig any deeper. The court dismissed the driller’s argument that he continued to drill because of the amount of sand in the water because he could have used a screening techniques common to the industry.

The district court did not err in finding the driller liable under the CPA, according to the court. The driller argued that the district court failed to identify or apply the appropriate deception standard and failed to find that he knowingly violated the CPA. Idaho courts construing the CPA must give due consideration to the Federal Trade Commission and the Federal Trade Commission Act. The driller argued that the FTC will only find deception if there is a representation that was likely to mislead reasonable consumers, which set a higher bar to find deception than previous CPA holdings. Although the driller failed to properly assert this argument in his briefs, the court noted that the higher standard was met in this case. The driller violated the CPA by misleading the home owners and providing unneeded services, the conduct was likely to mislead the home owners, and the home owners reasonable relied on the driller’s statements to their detriment. The driller recommended further drilling simply to collect more money and misled the home owners about the type of well they were getting.

The case is No. 38480.

Attorneys: Daniel V. Steenson (Sawtooth Law Offices, PLLC) for Gary Duspiva. Bruce M. Smith (Moore Smith Buxton & Turcke) for Cylde Fillmore.

Companies: Gary Duspiva Well Drilling & Development.

Cases: StateUnfairTradePractices IdahoNews