Fair Business Practices Act

Ken Shigley represented the plaintiff in the only known successful wrongful death claim based on violation of the Georgia Fair Business Practices Act. That case involved substitution of a “knockoff” made to match a photograph of a workstage that was sold as safety equipment to use with a forklift in a warehouse.

The Fair Business Practices Act (FBPA) is potentially Georgia’s strongest state consumer protection law, though it is often misunderstood, misused and underutilized. It is based upon the Model Unfair and Deceptive Acts and Practices statute which most U.S. jurisdictions adopted in some form in the 1970’s. The FBPA prohibits “unfair or deceptive acts and practices” in a variety of transactions in trade or commerce.

The legislative purpose is to protect consumers and legitimate business enterprises. This statute embodies principles of ethical business conduct that may be traced back many centuries in western civilization.

The statute includes, by way of example only, a long list of acts and practices which are declared to be unfair or deceptive.

Any other act or practice that is prohibited or declared deceptive by another statute or regulation, or that a court or jury finds to be unfair or deceptive, may be included under the FBPA.

Primarily a broad consumer protection statute, it also has specific provisions dealing with “office supply transactions” (defined broadly enough to cover anything that one business sells to another business for use in the business rather than for resale), solicitations for telephone directory listings, career consulting firms, long-term care facilities, personal care homes, home health services, promotional giveaways and contests, campground and marina memberships, vacation giveaways, advertising of 976 phone numbers, going-out-of-business sales, health spas, misuse of credit card information by merchants.

Cases in other states that have similar statutes have involved dangerous product designs, inadequate warnings of product safety hazards, and a wide variety of unfair or deceptive acts or practices of banks, insurance companies, mortgage companies, Realtors, and many types of businesses and professionals. Georgia law, however, excludes regulated business such as insurance from liability under the Fair Business Practices Act.

While the statute is broadly worded, the courts have interpreted the statute to limit it to transactions that could potentially affect the public interest in some way rather than purely private transactions, such as an isolated private sale of a house, farm or used car.

There are both public and private remedies for violations of the FBPA. The Office of Consumer Affairs may take administrative actions to investigate and stop unfair or deceptive practices. Private remedies are available to “any person injured or damaged” not including competitors by an unfair or deceptive act or practice in violation of the Act.

However, as noted above, the transaction must be one that could have potentially could have affected the public interest rather than a mere isolated private transaction. The question whether a transaction was an isolated private transaction or involved the public interest may be complex and controversial. It is important to fully investigate and develop this aspect of any claim based upon violation of the FBPA.

Unlike the similar laws in some states, no class actions are permitted under this statute.

The private remedies for individuals injured or damaged by an unfair or deceptive act or practice include: (a) equitable injunctive relief; (b) general damages sustained as a consequence of the violation; (c) reasonable attorney fees and expenses of litigation, if the defendant does not make a reasonable offer of settlement within 30 days after receipt of a written demand for relief by certified mail.

If a violation was intentional, additional remedies may also include both exemplary damages and treble damages (three times actual damages).

Application of FBPA to Personal Injury and Wrongful Death Cases. While there are no published appellate decisions applying the Fair Business Practices Act in personal injury and wrongful death cases, in 1995 this firm successfully concluded a case in which a wrongful death claim was based primarily upon a violation of the Fair Business Practices Act. In that case, the substitution of a “knockoff” in place of the requested forklift attachment was brought under the treble damages provision of the FBPA by classifying a forklift as an “office supply.” There is no reported court decision on point in Georgia, but a trial court denied summary judgment and the Court of Appeals declined to hear the interlocutory appeal. The case settled for “seven figures” before trial.

Georgia legislative history strongly supports the applicability of the FBPA in personal injury cases, if the underlying transaction comes within the scope of the statute, and if there is proof of a sufficient causal link between the deceptive or unfair act and the injury.

Case analysis must include careful evaluation of how the unfair or deceptive act or practice affects the public interest, and how it contributed to the proximate cause of the injury.

While applicability of the FBPA in wrongful death cases is somewhat awkward due to nineteenth century wording of one sentence of the wrongful death statute, recent appellate court decisions tend to support an interpretation consistent with FBPA-based wrongful death claims.