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By: Erin E. Lamb
Citizens from outside Pennsylvania can now sue Pennsylvania businesses for transactions that occurred outside the commonwealth, under the Pennsylvania Unfair Trade Practices Consumer Protection Law (UTPCPL). The Pennsylvania Supreme Court, in a unanimous ruling, affirmed such to the U.S. Court of Appeals for the Third Circuit in the class action suit Danganan v. Guardian Protection Services. The Third Circuit had certified the question to the Supreme Court of Pennsylvania. Previously, the District Courts within the Third Circuit had held repeatedly that the UTPCPL only applied to Pennsylvania business regarding Pennsylvania transactions.
Plaintiff Jobe Danganan sued Pennsylvania-based UTPCPL under the UTPCPL after he continued to be billed for a home security system in a Washington, D.C., house aft he had moved and after he had cancelled the contract. The district court ruled against him and he appealed to the Third Circuit.
Danganan argued that the language of the UTPCPL, specifically the terms “person,” “trade” and “commerce,” did not denote a specific geographic requirement, according to the Supreme Court’s opinion written by Chief Justice Thomas G. Saylor. The Court agreed. “Respecting the specific terms employed by the UTPCPL, we agree with appellant’s observation that the plain language definitions of ‘person’ and ‘trade’ and ‘commerce’ evidence no geographic limitation or residency requirement relative to the law’s application,” Saylor said. However, the law does state that it applies to conduct that “directly or indirectly affect[s] the people of this commonwealth.” Saylor, writing for the Court, did away with that clause by stating “that phrase does not modify or qualify the preceding terms. Instead, it is appended to the end of the definition and prefaced by ‘and includes,’ thus indicating an inclusive and broader view of trade and commerce than expressed by the antecedent language.”
Saylor also said the statute is meant to be construed liberally as it covers an expansive breadth of conduct. “In this respect, we recognize, as we previously have, the wide range of conduct the law was designed to address, including equalizing the bargaining power of the seller and consumer, ensuring the fairness of market transactions, and preventing deception and exploitation, all of which harmonize with the statute’s broad underlying foundation of fraud prevention,” Saylor said.
This has far-reaching implications for Pennsylvania’s businesses, particularly in the context of class actions like the one at issue in this case. (Its application to a certain global telecommunications conglomerate that is the largest broadcasting and cable television company in the world by revenue certainly springs to mind.)
If you have any questions or would like more information, please contact Erin Lamb at [email protected].