Price Inflation Damages Under The FDUTPA

The purpose of any class action is to allow one plaintiff to prove the claims of the other putative class members simply by proving its own case. Issues of causation and damages, therefore, must be uniform amongst the class, otherwise the defendant will always have the defense that it would violate their due process rights to allow one person to adjudicate the rights of others without affording it the opportunity to present counter-evidence for each claimant. The issue on class certification then becomes, with the facts alleged by the class representative, does the defendant have the right to offer individualized counter-evidence? In most class action claims under the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA") the answer is "yes" because the plaintiff is still faced with the burden in proving causation for each and every class member. But one way that consumer-plaintiffs are getting around this obstacle is by pleading "price inflation" damages. In essence, the plaintiff claims that because of the deceptive representation, the manufacturer-defendant is charging more for the product than its true value. As a result, the inflated cost is borne by every purchaser of the product, even if they never saw the representation. Inherent in every purchase is proof of causation. The challenge then becomes how to defend against the increasingly attractive claim?

Critical to bringing any FDUTPA class action in Florida is proving the required element of causation. The FDUPTA requires proving (1) a deceptive act or unfair practice; (2) causation; and (3)actual damages. Rollins, Inc. v. Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006); see also § 501.211(2), Fla. Stat ("a person who has suffered a loss as a result of a violation of this part . . . may recover actual damages . . ."). And, when the action is class certified, the issues related to causation must predominate over the entire class, i.e. the alleged deceptive act must have caused all class members actual damages. This is so because due process requires that each member of the putative class establish that the defendants committed a deceptive act or unfair practice that caused their actual loss. Butland, 951 So. 2d at 874. Common schemes and practices are not enough to satisfy due process. Id.

The trend of claiming "price inflation" damages is a way that consumer-plaintiffs are attempting to homogenize the causation element amongst the class. Generally, only "actual damages" are recoverable FDUTPA. See Rollins, Inc. v. Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006). "Actual damages" being defined as "the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties." Id. at 869 (quoting Rollins, Inc. v. Heller, 454 So. 2d 580, 585 (Fla. 3d DCA 1984)). Some...