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Pennsylvania Justices Rule on Ameriprise Case

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What You Need to Know

  • The state Supreme Court issued a 4-3 ruling.
  • The justices were interpreting the state's Unfair Trade Practices and Consumer Protection Law.
  • The majority held that consumers relying on the law need not prove a seller had intent to deceive.

A ruling that Ameriprise Financial engaged in deceptive conduct in selling a couple insurance and financial services has been upheld by the Pennsylvania Supreme Court, which held that proving intent to deceive is not necessary to succeed in state consumer protection litigation.

The justices ruled 4-3 to affirm the Superior Court’s decision that protections of the state’s Unfair Trade Practices and Consumer Protection Law extended to Gary and Mary Gregg in their lawsuit against Ameriprise and related entities.

An Allegheny County trial judge previously found that an Ameriprise agent duped the Greggs into obtaining certain life insurance policies that were to their financial detriment, and awarded them $52,000.

In response to Ameriprise’s appeal that the plaintiffs did not prove there was an intent to deceive of verdict, the Superior Court ruled that the statute functioned in a strict liability manner. The Supreme Court’s majority, consisting of Justices David Wecht, Christine Donohue, Sallie Mundy and Kevin Dougherty, agreed.

Wecht wrote in the majority’s opinion that proof of intent was not required.

“The plain language of the current statute imposes liability on commercial vendors who engage in conduct that has the potential to deceive and which creates a likelihood of confusion or misunderstanding. That is all that is required. The legislature required neither carelessness nor intent when a cause of action is premised upon deceptive conduct,” Wecht said.

“Accordingly, under the plain meaning of the statute, deceptive conduct during a consumer transaction that creates a likelihood of confusion or misunderstanding and upon which the consumer relies to his or her financial detriment does not depend upon the actor’s state of mind,” Wecht added. “Liberally construing the CPL as we must, the amended language places the duty of compliance with the CPL on commercial vendors, without regard to their intent.”

Dissenting from the majority’s ruling were Justices Debra Todd and Max Baer and Chief Justice Thomas Saylor.

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Todd wrote in the dissenting opinion that she disagreed with the majority’s interpretation of Section 201-2(4)(xxi) of the statute.

“In my view, a vendor may be liable under Section xxi for deceptive conduct only when he knows, or reasonably should know, that his conduct, be it his actions or statements, is likely to cause misunderstanding or confusion in a consumer regarding the goods or services the vendor is selling,” Todd said.

“This standard, in my view, effectuates the paramount goal of the CPL—to eliminate unfairness and deception in consumer transactions—by proscribing, in addition to the intentional deception of consumers, conduct which vendors should recognize is likely to deceive reasonable consumers,” she added. “However, in contrast to the strict liability standard embraced by the majority, this negligence standard also protects honest businesspeople from incurring unforeseen penalties for statements or acts that no consumer would have been confused or misled by.”

Kenneth Behrend in Pittsburgh represents the plaintiffs and said the Supreme Court’s decision was the conclusion of nearly 20 years of litigation, as the case was filed in 2001.

“It’s a major victory for consumers in Pennsylvania,” Behrend said. “The decision brings us in alignment with the majority of states in the country which hold that no intent is needed to prove consumer deception.”

He added, “It’s been a 20-year journey to get to this decision, I’m humbled that my client stuck with me all that time and had faith in me and our legal system.”

Kathy Condo of Babst, Calland, Clements and Zomnir in Pittsburgh represents the defendants and did not respond to a request for comment.