IN THE SUPREME COURT OF PENNSYLVANIA 4 MAP 2014 CHRISTINA GRIMES, ENTERPRISE LEASING COMPANY OF PHILADELPHIA, LLC,

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1 Received 03/24/2014 Supreme Court Middle District IN THE SUPREME COURT OF PENNSYLVANIA 4 MAP 2014 CHRISTINA GRIMES, v. Plaintiff/Appellee, ENTERPRISE LEASING COMPANY OF PHILADELPHIA, LLC, Defendant/Appellant. BRIEF AMICUS CURIAE OF TRUCK RENTING AND LEASING ASSOCIATION AND THE INDUSTRY COUNCIL FOR VEHICLE RENTING AND LEASING IN SUPPORT OF APPELLANT ENTERPRISE LEASING COMPANY OF PHILADELPHIA, LLC Appeal from the Final Order and Opinion of the Superior Court at No EDA 2012, dated March 19, 2013, Reversing in Part the Judgment of the Court of Common Pleas of Montgomery County, Civil No cv-16695, dated March 28, 2012 D. Alicia Hickok Pa. ID Todd N. Hutchison Pa. ID DRINKER BIDDLE & REATH LLP One Logan Square, Suite 2000 Philadelphia, PA (215) (telephone) (215) (facsimile) alicia.hickok@dbr.com todd.hutchison@dbr.com Counsel for Amicus Curiae Truck Renting and Leasing Association and the Industry Council for Vehicle Renting and Leasing

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii INTEREST OF AMICUS CURIAE TRUCK RENTING AND LEASING ASSOCIATION AND THE INDUSTRY COUNCIL FOR VEHICLE RENTING AND LEASING... 1 STATEMENT OF JURISDICTION... 3 ORDER IN QUESTION... 3 STATEMENT OF SCOPE AND STANDARD OF REVIEW... 3 STATEMENT OF QUESTIONS PRESENTED... 4 STATEMENT OF THE CASE... 4 SUMMARY OF ARGUMENT... 6 ARGUMENT... 7 CONCLUSION... 16

3 TABLE OF AUTHORITIES CASES Page(s) Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145 (Pa. Super. 2012) Brittain v. Beard, 601 Pa. 409, 974 A.2d 479 (2009) Chatham Racquet Club v. Commonwealth by Zimmerman, 116 Pa. Commw. 55, 541 A.2d 51 (1988) Chatham Racquet Club v. Commonwealth by Zimmerman, 127 Pa. Commw. 209, 561 A.2d 354 (1989) Commonwealth by Creamer v. Monumental Props., Inc., 459 Pa. 450, 329 A.2d 812 (1974)... 2, 7, 11, 15 Commonwealth by Zimmerman v. Nat l Apt. Leasing Co., 102 Pa. Commw. 623, 519 A.2d 1050 (1986) Commonwealth v. Burns, 663 A.2d 308 (Pa. Cmwlth. 1995) Commonwealth v. Percudani, 825 A.2d 743 (Pa. Cmwlth. 2003) FTC v. Freecom Commc ns, Inc., 401 F.3d 1192 (10th Cir. 2005)... 10, 14 Grimes v. Enter. Leasing Co. of Phila., LLC, 66 A.3d 330 (Pa. Super. 2013)... 13, 15 Ins. Fed n of Pa., Inc. v. Commonwealth, 601 Pa. 20, 970 A.2d 1108 (2009)... 3 McGregor v. Chierico, 206 F.3d 1378 (11th Cir. 2000)... 11, 14 Schwartz v. Rockey, 593 Pa. 536, 932 A.2d 885 (2007) ii -

4 Slippery Rock Area Sch. Dist. v. Pa. Cyber Charter Sch., 612 Pa. 486, 31 A.3d 657 (2011)... 4 Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) Toy v. Metro. Life Ins. Co., 593 Pa. 20, 928 A.2d 186 (2007)... 9 Weinberg v. Sun Co., 565 Pa. 612, 777 A.2d 442 (2001)... 9, 14 Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479, 854 A.2d 425 (2004)... 9 STATUTES 1 Pa.C.S P.L. 1224, 1-9, 73 P.S , et seq Act of November 19, 1996 (P.L. 906, No. 146) (Reg. Sess. 1995), amending Act of December 17, 1968 (P.L. 1224, No. 387), P.L. 906, No. 146, 73 P.S , , 8, 9 - iii -

5 INTEREST OF AMICUS CURIAE TRUCK RENTING AND LEASING ASSOCIATION AND THE INDUSTRY COUNCIL FOR VEHICLE RENTING AND LEASING Amicus curiae Truck Renting and Leasing Association (the Association ) is a voluntary, not-for-profit trade association that is headquartered in Alexandria, Virginia. It was established in 1978 to serve as a unified voice for the truck renting and leasing industry, with the overarching goal of ensuring that companies that lease and rent trucks can compete fairly in the North American marketplace. It has well over 500 members, some of which are engaged primarily in commercial truck leasing, but others of which serve the consumer and small business markets. The Association s membership includes the Industry Council for Vehicle Renting and Leasing (referred to collectively as the Association ), representing the broader commercial and consumer vehicle renting and leasing industry. Everyone is familiar with the do-it-yourself trucks that enable young couples to move into their first home, that transport youth and their belongings to college (or back home), that facilitate military or veteran do-it-yourself moves, or that bring family memories home when a parent or grandparent moves or dies. Those are the trucks that our members rent to consumers and small businesses, and our members take great pride in being able to keep the prices low enough that these trucks are accessible to anyone who needs to move items from one place to another

6 all across the country without incurring the costs associated with professional movers. It is for that reason that the Association submits this brief amicus curiae, because the decision of the Superior Court raises the threat of a proliferation of baseless litigation that would serve to drive the cost of truck rentals out of reach of the very people who most depend on them. Such a result would be contrary not just to the commitment that our members have to their customers, but to the very purpose of the Unfair Trade Practices and Consumer Protection Law ( UTPCPL ), which, as this Court explained in Commonwealth by Creamer v. Monumental Properties, Inc., was enacted to ensure the fairness of market transactions through the prevention of deception and the exploitation of unfair advantage [that] has always been an object of remedial legislation. 459 Pa. 450, 458, 329 A.2d 812, 816 (1974)

7 STATEMENT OF JURISDICTION The Superior Court determined that the trial court s order was final pursuant to Pa.R.A.P. 341(b). The Superior Court issued a final order on the merits of the appeal, and this Court granted a timely-filed petition for allowance of appeal pursuant to Pa.R.A.P Accordingly, this Court has jurisdiction pursuant to 42 Pa.C.S ORDER IN QUESTION On March 19, 2013, the Superior Court entered the following order: Accordingly, the portion of the trial court s March 29, 2012 [sic] order granting Enterprise judgment on the pleadings as to Grimes UTPCPL claim is reversed and the case is remanded for further proceedings, consistent with this opinion. As to all other aspects of the trial court s March 29, 2012 [sic] order, we affirm. Order affirmed in part and reversed in part. Case remanded. Jurisdiction relinquished. STATEMENT OF SCOPE AND STANDARD OF REVIEW The trial court was authorized to grant a motion for judgment on the pleadings where on the facts averred, the law says with certainty that no recovery is possible. Ins. Fed n of Pa., Inc. v. Commonwealth, 601 Pa. 20, 29, 970 A.2d 1108, 1114 (2009) (quoting In re Weidner, 595 Pa. 263, 938 A.2d 354 (2007)). The questions raised are legal, and the standard of review is de novo and the scope plenary. Id. at 29, 970 A.2d at 1114 (judgment on the pleadings raises legal question subject to plenary review); see Brittain v. Beard, 601 Pa. 409, 417,

8 A.2d 479, 483 (2009) (legal questions subject to de novo review). The questions on which this Court granted allowance of appeal require the construction of two sections of the Unfair Trade Practices and Consumer Protection Law and thus are likewise questions of law, subject to de novo and plenary review. See Slippery Rock Area Sch. Dist. v. Pa. Cyber Charter Sch., 612 Pa. 486, 497, 31 A.3d 657, 663 (2011); see also Act of November 19, 1996 (P.L. 906, No. 146) (Reg. Sess. 1995), amending Act of December 17, 1968 (P.L. 1224, No. 387), 2, 73 P.S ; id. 4, 73 P.S STATEMENT OF QUESTIONS PRESENTED This Court granted allowance of appeal on two questions: 1. Whether the Superior Court erred when it held that a private plaintiff who alleges deceptive conduct under the Unfair Trade Practices and Consumer Protection Law s ( UTPCPL s ) catch-all provision, 73 P.S (4)(xxi), need not allege and prove justifiable reliance, contrary to the decisions of this Court, earlier decisions of the Superior Court, and federal decisions construing the UTPCPL. 2. Whether the Superior Court erred when it held that a plaintiff may satisfy the UTPCPL s ascertainable loss requirement by voluntarily hiring an attorney and allegedly incurring litigation costs to challenge allegedly wrongful conduct, even where, as here, the plaintiff paid no money to the defendant as a result of that conduct. The Association, as amicus curiae, writes this brief in support of Appellant Enterprise Leasing Company of Philadelphia, LLC s ( Enterprise ) answer to the first of these questions

9 STATEMENT OF THE CASE The Association does not have first-hand knowledge of the facts of the case, and it drafts this brief in reliance upon the facts as set forth in Enterprise s brief

10 SUMMARY OF ARGUMENT Although this Court has clearly and repeatedly construed a private right of action under the UTPCPL to require that plaintiffs plead and prove proximate causation accompanied by justifiable reliance, the Superior Court has looked at an amendment to a category of conduct that can be challenged by either the Attorney General or a private plaintiff as eliminating the restrictions on private plaintiffs. The Superior Court reached that odd conclusion by misunderstanding the Commonwealth Court s analysis of the catchall provision in cases brought by the Attorney General. Amicus curiae asks this Court to rectify the misunderstanding, because, unless this Court does, the Superior Court s determination will hurt the very consumers that the Act is intended to protect

11 ARGUMENT Pennsylvania s Unfair Trade Practices and Consumer Protection Law (Act of December 17, 1968), P.L. 1224, 1-9, 73 P.S , et seq. ( UTPCPL ), is comprised of three parts: the initial sections that apply to any action whether brought by the Attorney General or by a private consumer; provisions unique to the Attorney General or District Attorneys; and a single section devoted solely to private actions, 73 P.S The General Assembly added in 1976, two years after this Court decided Commonwealth by Creamer v. Monumental Properties, Inc., 459 Pa. 450, 329 A.2d 812 (1974). Monumental Properties a case about whether the leasing of housing was covered by the UTPCPL has been most frequently cited for tandem propositions: that the statute s underlying foundation is fraud prevention, and that as such it must be liberally construed. Id. at 459, 329 A.2d at 816. From that common foundation, however, the case law in this Court followed one path, while the case law in the Commonwealth Court (and eventually, the Superior Court) followed another. This Court recognized that the fact that the overall statute was targeted at the prevention of fraud aided in the construction of 73 P.S (a), the section of the statutory provision added in 1976 to permit private rights of action. That statutory provision read in full: Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any - 7 -

12 ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared unlawful by section 3 of this act, may bring a private action, to recover actual damages or one hundred dollars ($100), whichever is greater. The court may, in its discretion, award up to three times the actual damages sustained, but not less than one hundred dollars ($100), and may provide such additional relief as it deems necessary or proper. 73 P.S (a) (emphasis added). There was no corollary provision constraining the Attorney General or the District Attorneys. From the adoption of the private action provision, then, the statute was limited to use by persons who had suffer[ed] any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared unlawful by section 3 of this act. Id. (emphasis added). And the Supreme Court has repeatedly recognized that this proximate causation requirement i.e., as a result of requires a private plaintiff to plead and prove justifiable reliance. There is no authority which would permit a private plaintiff to pursue an advertiser because an advertisement might deceive members of the audience and might influence a purchasing decision when the plaintiff himself was neither deceived nor influenced. There is certainly nothing in the statute which suggests such a private right. The UTPCPL was enacted in 1968, and a private cause of action was added in The UTPCPL s underlying foundation is fraud prevention. Commonwealth v. Monumental Properties, Inc., 459 Pa. 450, 329 A.2d 812, 816 (Pa. 1974). Nothing in the legislative history suggests that the legislature ever intended statutory language directed against consumer fraud to do away with the traditional common law elements of reliance and causation

13 Weinberg v. Sun Co., 565 Pa. 612, , 777 A.2d 442, 446 (2001)(citation omitted). None of the above language in was amended when, in 1996, the General Assembly amended the definitions found in 73 P.S and added language to Instead, the General Assembly simply added a provision granting courts discretion to award reasonable fees and costs. Act of November 19, 1996 (P.L. 906, No. 146), 4, 73 P.S The Court has re-affirmed the private plaintiff pleading requirement on multiple occasions, including since the 1996 amendment. In Yocca v. Pittsburgh Steelers Sports, Inc., the Court confirmed that Weinberg s holding required private plaintiffs to establish justifiable reliance. 578 Pa. 479, 501, 854 A.2d 425, (2004). And in Toy v. Metropolitan Life Insurance Co. (which was considering pre-1996 version of statute), the Supreme Court characterized Weinberg as rejecting a Superior Court attempt to conflate the considerations that guide the Attorney General when he is pursuing an enforcement action with the requirements for private plaintiffs. 593 Pa. 20, 45-46, 928 A.2d 186, 202 (2007). The Court further affirmed that Weinberg necessarily states that a plaintiff alleging violations of the Consumer Protection Law must prove justifiable reliance. Id. at 45-46, 928 A.2d at 202. Most recently, the Court has explained the relationship between the - 9 -

14 justifiable reliance requirement and the text of : Notably, however, the justifiable reliance criterion derives from the causation requirement which is express on the face of section 9.2. See 73 P.S (affording a private right of action to persons who, inter alia, suffer loss as a result of the use or employment of an act made unlawful by the UTPCPL); Weinberg v. Sun Co., 565 Pa. 612, 618, 777 A.2d 442, 446 (2001) ( The [UTPCPL] clearly requires, in a private action, that a plaintiff suffer an ascertainable loss as a result of the defendant's prohibited action. This means, in this case, a plaintiff must allege reliance.... (emphasis in original)). Schwartz v. Rockey, 593 Pa. 536, 556 n.16, 932 A.2d 885, 897 n.16 (2007) (emphasis added). The fact that private plaintiffs would have different requirements from public prosecutors makes sense. Indeed, courts construing the federal precursor to the UTPCPL have recognized that the government should not be required to show all of the elements of common-law fraud when attempting to remedy extensive public harm. A 5 claim simply is not a claim of fraud as that term is commonly understood or as contemplated by Rule 9(b), and the district s court s inclination to treat it as such unduly hindered the FTC s ability to present its case. Unlike the elements of common law fraud, the FTC need not prove scienter, reliance, or injury to establish a 5 violation. The FTC s action against Haroldsen was not a private or common law fraud action designed to remedy a singular harm, but a government action brought to deter deceptive acts and practices aimed at the public and to obtain redress on behalf of a large class of third-party consumers who purchased defendants products and services over an extended period of time. FTC v. Freecom Commc ns, Inc., 401 F.3d 1192, 1204 n.7 (10th Cir. 2005)

15 (citations omitted); see also McGregor v. Chierico, 206 F.3d 1378, 1388 (11th Cir. 2000) ( Given this presumption, the FTC need not prove subjective reliance by each customer, as it would be virtually impossible for the FTC to offer such proof, and to require it would thwart and frustrate the public purposes of FTC action. (citation omitted)). 1 Nonetheless, since at least 1986, the Commonwealth Court construed the Supreme Court s Monumental Properties decision as requiring the Commonwealth to plead fraud with particularity. See Commonwealth by Zimmerman v. Nat l Apt. Leasing Co., 102 Pa. Commw. 623, 627, 519 A.2d 1050, 1053 (1986)(finding complaint not specific enough in its averments of fraud). Then, in Chatham Racquet Club v. Commonwealth by Zimmerman, even though it recognized that the Act s goal was to benefit the public at large, the Commonwealth Court rejected the Attorney General s reliance on the catchall provision, because the trial court had not found that the defendant s actions were fraudulent. 116 Pa. Commw. 55, 59-60, 541 A.2d 51, (1988)( It is only when the confusion and misunderstanding created by the actor is fraudulent that the provisions of the Act may be activated. ) (on preliminary injunction); Chatham Racquet Club v. Commonwealth by Zimmerman, 127 Pa. Commw. 209, 215, 561 A.2d 354, The Federal Trade Commission filed an amicus brief in Monumental Properties and this Court utilized decisions under Section 5 of the Federal Trade Commission Act to support its construction of Section 3 of the UTPCPL. 459 Pa. at , 329 A.2d at

16 (1989)(rejecting the Attorney General s contention that the modern concept of deception... eliminates the requirement of proof of intent, scienter, actual reliance or damage, and requires only a showing that an act or practice has a tendency or capacity to deceive even a significant minority of consumers ); see also Commonwealth v. Burns, 663 A.2d 308, (Pa. Cmwlth. 1995) (finding common law fraud required but satisfied and not reaching the Attorney General s alternative argument that statutory fraud is distinct from common law fraud). In fact, it is possible that this confusion frustrated the General Assembly enough to amend the catchall provision to clarify that the Commonwealth need not allege fraud with particularity. In any event, it was only after the catchall provision was amended in 1996 that the Commonwealth Court relented albeit by employing the overbroad language seized by the Superior Court. See Commonwealth v. Percudani, 825 A.2d 743, 746 (Pa. Cmwlth. 2003) ( Prior to 1996, a plaintiff had to prove the elements of common law fraud in order to state a claim under the catchall provision of the Law. ). Setting aside whether the definition of conduct that is deceptive but not fraudulent broadens the scope of actionable matters, at the least, it is clear that when the Commonwealth is the plaintiff, the amended catchall provision removes the need to plead justifiable reliance, because the Commonwealth s pleading provision does not contain the requirements that

17 9.2 does. But the Superior Court failed to understand that distinction, and instead construed the Commonwealth Court as finding that the amendment removed the need for any plaintiff to plead or prove justifiable reliance or satisfy the other elements of common law fraud that the Supreme Court has repeatedly recognized as critical. In Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145 (Pa. Super. 2012), the Superior Court characterized Percudani and subsequent Commonwealth Court cases as standing for the proposition that any decision to retain the pre-1996 pleading standards for Section 201-2(4)(xxi) would render the words deceptive conduct superfluous and run contrary both to the rules of statutory construction and our Supreme Court s directive for liberal construction of the UTPCPL. Id. at 152. In the opinion below in this case, in turn, the Superior Court relies on Bennett to say that any deceptive conduct will suffice under the UTPCPL s catchall provision and the plaintiff need not prove the elements of common law fraud, including induc[ement of] justifiable reliance and accordingly did not need to allege it. Grimes v. Enter. Leasing Co. of Phila., LLC, 66 A.3d 330, & n.4 (Pa. Super. 2013). The language amended in 1996, however, appears in 201-2(4); there was no amendment to the language in that serves as the basis for requiring private plaintiffs to plead and prove

18 justifiable reliance, i.e., as a result of. See Weinberg, 565 Pa. at , 777 A.2d at 446. The 1996 amendment did change the requirements for establishing the category of conduct that fits within the catchall provision and that amendment clearly gave the Attorney General and District Attorneys the same respect in asserting claims on behalf of the general public that the Federal Trade Commission has. Freecom Commc ns, Inc., 401 F.3d at 1204 n.7; McGregor, 206 F.3d at But the construction of language in one provision cannot be read to undo what the Supreme Court has already held as to a different provision. As a matter of statutory construction, this Court presumes that when it has construed the language used in a statute, the General Assembly in subsequent statutes on the same subject matter intends the same construction to be placed upon such language. 1 Pa.C.S. 1922(4). By adding the possibility of attorneys fees and not revising the pleading requirements for private plaintiffs that have been repeatedly set forth, the General Assembly drew a line between the showing that needs to be made by the Attorney General or District Attorneys and the showing that needs to be made by private plaintiffs. In lifting language out of context and in ignoring the clear and repeated holdings of this Court the Superior Court contravened basic principles of statutory construction and threatens to undermine the very purpose of the Act,

19 which is to ensure the fairness of market transactions through the prevention of deception and the exploitation of unfair advantage [that] has always been an object of remedial legislation. Monumental Props., 459 Pa. at 458, 329 A.2d at 816. The fairness of market transactions becomes distorted when creative plaintiffs (or their lawyers) determine to advance their own personal goals by taking something here, an agreed-to contractual provision that is clear on its face and widely employed in the industry and arguing only that it could have created confusion or misunderstanding. Cf. Grimes, 66 A.3d at 337. The money that pays for litigating such suits or, worse, paying judgments from such suits drives up the cost of goods and services for those whom the Act is intended to protect. Cf. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007)(recognizing that securities suits by private plaintiffs can be employed abusively to impose substantial costs on companies and individuals whose conduct conforms to the law and that Congress responded with heightened pleading requirements for private plaintiffs). And it is not as though the consumers who rely on the trucks they rent from the Association s members can meet a price increase by switching to a lower priced alternative do-it-yourself moving is the low-cost alternative to hiring a moving company

20 CONCLUSION For all of the reasons set forth above, the Association, as amicus curiae, respectfully requests that this Court REVERSE the decision of the Superior Court and reinstate the trial court s grant of Judgment on the Pleadings. Dated: March 24, 2014 Respectfully Submitted, /s/ D. Alicia Hickok D. Alicia Hickok Pa. ID Todd N. Hutchison Pa. ID DRINKER BIDDLE & REATH LLP One Logan Square, Suite 2000 Philadelphia, PA (215) (telephone) (215) (facsimile) alicia.hickok@dbr.com todd.hutchison@dbr.com Counsel for Amicus Curiae Truck Renting and Leasing Association and the Industry Council for Vehicle Renting and Leasing

21 CERTIFICATES OF COMPLIANCE Pa.R.A.P Compliance This brief is exempt from the certification requirement of Pa.R.A.P because it is less than thirty (30) pages and, therefore, is deemed to comply with the word limits of Pa.R.A.P See Pa.R.A.P. 2135(d). Identical Documents The material provided on the compact disc accompanying this filing is an accurate and complete representation of the paper version of the foregoing amicus curiae brief. Dated: March 24, 2014 /s/ Todd N. Hutchison Todd N. Hutchison

22 CERTIFICATE OF SERVICE I, Todd N. Hutchison, hereby certify that I am this day serving the foregoing Brief Amicus Curiae of Truck Renting and Leasing Association and the Industry Council for Vehicle Renting and Leasing by overnight courier upon the persons listed below, which service satisfies the requirements of Pa.R.A.P. 123: Theodore H. Jobes, Esq. Fox Rothschild LLP 2000 Market Street, 20th Floor Philadelphia, PA Counsel for Appellant Enterprise Leasing Company of Philadelphia, LLC Gilbert F. McKnight, IV, Esq. Claudia Drennen McCarron, Esq. Nelson, Levine, de Luca & Horst, LLC 519 Township Line Road, Suite 300 Blue Bell, PA James Michael Alexander, Esq. James C. Haggerty, Esq. Haggerty, Goldberg, Schleifer & Kupersmith, P.C Market Street, Suite 2700 Philadelphia, PA Counsel for Appellee Christina Grimes Dated: March 24, 2014 /s/ Todd N. Hutchison Todd N. Hutchison