Pittsburgh Legal Back Talk

Legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus.

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Posted By Cliff Tuttle | May 30, 2015

No. 1,164


Image: marcprimopulisciblog.wordpress.com

Image: marcprimopulisciblog.wordpress.com

Appellant Kern was treated in the Appellee Lehigh Valley Hospital for injuries sustained in an accident at an amusement park. Defendant billed Plaintiff, who was uninsured, under a so-called “Chargemaster” rate list, which contains rates substantially higher than that charged to insured patients. The rate list is not disclosed to patients. Plaintiff filed a class action in behalf of himself and all others similarly situated, who were charged higher rates due to lack of insurance without prior notice.  The case was removed to federal court and then returned to state jurisdiction by agreement of the parties.

“On November 26, 2012, [Appellant] filed an [a]mended [c]omplaint alleging three counts; breach of contract, breach of the covenant of good faith and fair dealing, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1, et seq. (UTPCPL).”

The trial court dismissed the first two counts following preliminary objections for reasons  not involving UTPCPL.  “Finally, in that opinion, [the trial court] overruled the objection to the count for violation of the UTPCPL, holding that a private citizen has standing under the statute merely because of the harm of a pending lawsuit.”

The parties were then directed to submit briefs regarding class action certification. Following a hearing, the trial court issued an order and opinion stating that the amended complaint did not meet two of the five prerequisites to sustain a viable class action under Pa.R.C.P. No. 1702.

“Specifically, the trial court held that, under Rule 1702(2), (5), Appellant failed to establish his claims presented ‘questions of law or fact common to the class’ and the class action method of adjudication was ‘fair and efficient.'”

With regard to the common questions requirement, the trial court stated that the UTPCPL claim “includes the element of individual reliance and therefore, does not meet the commonality of fact or law prerequisites for a class action.”

The common pleas court also concluded that a class action would not be appropriate under the “fair and efficient method of adjudication” because “individual reliance would be the predominant factor over the common issues.”  In other words, the UTPCPL reliance criteria would have to be satisfied on a case-by-case basis.

“Ultimately, the trial court concluded that class certification would not be appropriate because each class member would be required to prove justifiable reliance,” the Superior Court observed.

The central issue on appeal, according to the Superior Court, was whether individual, justifiable reliance is required for private actions under Section 201-9.2 of the UTPCPL.

” We need not look far for the answer to this question, as our Supreme Court has decided and reaffirmed that justifiable reliance is an element of all private claims under the UTPCPL.”

In Weinberg v. Sun Co., 777 A.2d 442 (Pa. 2001), a case involving advertising that claimed that Sunoco’s product called Ultra® would improve automotive performance, “[t]he Supreme Court determined that this Court’s application of the UTPCPL was erroneous because it was premised on the considerations that guide the Attorney General when he/she is pursuing an enforcement action under Section 201-4. Id. at 445-46 (‘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.’). The court, noting that the UTPCPL’s underlying foundation is fraud prevention, held that nothing in the legislative history of the UTPCPL ever intended statutory language directed at consumer fraud to do away with the traditional elements of reliance and causation in a private action under the UTPCPL. Id. at 446. The court, therefore, concluded that in private actions under Section 201-9.2, the plaintiffs had to ‘allege reliance, that they purchased Ultra® because they heard and believed Sunoco’s false advertising that Ultra® would enhance engine performance.’ Id.”

See also: Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004) and Toy v. Metro. Life Ins. Co., 928 A.2d 186 (Pa. 2007),

“Despite this plethora of precedent, Appellant contends Weinberg, and all cases derivative of Weinberg, are not binding on cases involving post-1996 deceptive conduct, an obvious reference to the year in which our Legislature amended the UTPCPL to include deceptive conduct as a violation of the UTPCPL. Instead, Appellant cites our decision in Grimes v. Enter. Leasing Co. of Philadelphia, LLC, 66 A.3d 330 (Pa. Super. 2013), rev’d on other grounds, ___ A.3d ___, 2014 WL 7088933 (Pa. 2014),[10] and dismisses our decision in DeArmitt v. New York Life Ins. Co., 73 A.3d 578 (Pa. Super. 2013), to argue a plaintiff need not allege justifiable reliance in a private cause of action under the UTPCPL. We disagree.”

“In Grimes, we were confronted with the issue of whether the trial court erred in finding a plaintiff could not prevail on her UTPCPL claim because she did not allege a misrepresentation with respect to the deceptive conduct alleged in her complaint. Citing Bennett v. A.T. Masterpiece Homes At Broadsprings, LLC, 40 A.3d 145 (Pa. Super. 2012),[11] we held the plaintiff need not allege a misrepresentation because any deceptive conduct alleged under the catchall provision of the UTPCPL would be sufficient to state a private cause of action. This Court’s passing reference in a footnote that plaintiff need not allege justifiable reliance was stated in the context of explaining that plaintiff need not prove the elements of common law fraud in an action that alleges deceptive conduct. Within days of our decision in Grimes, we decided DeArmitt, citing our Supreme Court’s decision in Toy, where we reaffirmed a UTPCPL plaintiff still must prove justifiable reliance and causation in a private action, because our legislature never intended to do away with traditional common law elements of reliance and causation in an UTPCPL action. Our decisions in Grimes and DeArmitt,therefore, are not inconsistent with the decisions of our Supreme Court in Weinberg and its progeny.”

The requirement to prove justifiable reliance existed before the 1996 amendment expanding the catch-all phrase to include both fraudulent and deceptive conduct.  While the burden of proof has been lightened with regard to the elements of fraud, proof of justifiable reliance is required in private actions under UTPCPL, both before and after 1996.

The Superior Court also addressed several other arguments advanced by the Appellant, finding no error in the lower courts denial of a class action determination.



CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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