Title: State v. International Collection Service

State: vermont

Issuer: Vermont Supreme Court

Document:

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 89-300


State of Vermont                             Supreme Court

                                             On Appeal from
     v.                                      Washington Superior Court


International Collection Service, Inc.       April Term, 1990


Alan W. Cheever, J.

Jeffrey L. Amestoy, Attorney General, and Elliott M. Burg and Lisa L.
  Barrett, Assistant Attorneys General, Montpelier, for plaintiff-
  appellant

M. Jerome Diamond and Kimberly R. Elia of Diamond & Associates, P.C., and
  David S. Putter of Saxer, Anderson, Wolinsky & Sunshine, Montpelier, for
  defendant-appellee

Jay C. Shaffer, Acting General Counsel, and Ernest J. Isenstadt, Assistant
  General Counsel, Washington, D.C., and Phoebe D. Morse, Director,
  Boston Regional Office, Boston, Massachusetts, for amicus curiae
  Federal Trade Commission


PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.


     DOOLEY, J.   The State of Vermont appeals from the Washington Superior
Court's dismissal of its consumer fraud action against defendant,
International Collection Services, Inc. (ICS).  The court held that the
actions complained of did not fall within the Consumer Fraud Act, 9 V.S.A.
{{ 2451-2479.  We hold that the dismissal was erroneous and reverse.
     Defendant ICS is a debt collection agency based in Williamstown,
Vermont.  All of its customers are businesses, the majority of which are
located out-of-state.  The State of Vermont brought this action, alleging
that ICS engaged in unfair and deceptive practices in its efforts to solicit
new clientele.  The trial court granted defendant's motion to dismiss,
concluding that the Attorney General had no authority to bring an action to
restrain unfair or deceptive practices by a business in its transactions
with business customers.  The court concluded:  "The overall and interwoven
fabric of the statute persuades this court that the Attorney General was not
authorized by the legislature to bring a suit on behalf of businesspersons
for consumer fraud."  The sole issue on appeal is whether the trial court
erred in this conclusion.
     The State argues that the Act on its face authorizes the Attorney
General to bring an action regardless of the status of the victim and that
relevant federal and state precedent supports this view.  We look first to
the language of the relevant statutes.
     Two sections of the Act are central to this action.  First, the basic
prohibition of the Act is contained in 9 V.S.A. { 2453(a) which provides
that "[u]nfair methods of competition in commerce, and unfair or deceptive
acts or practices in commerce, are hereby declared unlawful."  Nowhere does
the statute expressly limit the terms "unfair or deceptive acts or practices
in commerce" to transactions between businesses and consumers.  The second
is the public enforcement mechanism for the Act, 9 V.S.A. { 2458(a), which
provides:
         Whenever the attorney general or a state's attorney has
         reason to believe that any person is using or is about
         to use any method, act or practice declared by section
         2453 of this title to be unlawful, . . . and that
         proceedings would be in the public interest, the
         attorney general, or a state's attorney if authorized to
         proceed by the attorney general, may bring an action in
         the name of the state against such person to restrain
         . . . the use of such method, act or practice . . . .

Nothing in this section limits the Attorney General's power to bring an
action based on the status of the victim.  Under the plain wording of the
section, the Attorney General is authorized to  bring an action on behalf of
aggrieved victims when (1) he has reason to believe that any person is using
or is about to use any method, act or practice declared unlawful, and (2)
such an action would be in the public interest.  There are no other express
limitations on the types of activities against which the attorney general
may take action.
     Although our overall aim is to give effect to the intent of the
legislature, we must look first to the plain meaning of the statutory
wording.  See Wolfe v. Yudichak, 153 Vt. 235, 239, 571 A.2d 592, 595 (1989).
Nothing in the statutory wording limits the victims who may be protected by
the Attorney General to exclude businesses.
     Recognizing that a statutory scheme must be read in pari materia, id.
at 240, 571 A.2d  at 595, defendant advances two main reasons why the Act
protects only individual consumers:  (1) the title and other sections of the
Act show that it is intended to protect only individual consumers but not
business persons, and (2) Section 5(a)(1) of the Federal Trade Commission
Act, to which Vermont courts must look in interpreting the Vermont Consumer
Fraud Act, see 9 V.S.A. { 2453(b), protects individual consumers but not
businesses.
     The Title containing the Act is entitled "Consumer Fraud."   It
contains numerous references to consumers and a definition of the term
"consumer." (FN1) Although the public enforcement section, { 2458(a), makes no
reference to consumer victims, the private remedy section, { 2461(b), is
specifically limited to consumer plaintiffs.  The latter statute provides:
         Any consumer who contracts for goods or services in
         reliance upon false or fraudulent representations or
         practices prohibited by Section 2453 of this title, or
         who sustains damages or injury as a result of any false
         or fraudulent representations or practices  prohibited
         by section 2453 of this title . . . may sue for
         appropriate equitable relief and may sue and recover
         from the seller, solicitor or other violator the amount
         of his damages, or the consideration or the value of the
         consideration given by the consumer, reasonable
         attorney's fees, and exemplary damages not exceeding
         three times the value of the consideration given by the
         consumer.

Based on the definition of "consumer," see 9 V.S.A. { 2451a(a), it is clear
that there is no private right of action under { 2461(b) for business
victims of deceptive or unfair acts or practices. (FN2) Further, restitution,
one of the remedies available to the Attorney General in a { 2458(a) action,
is expressly provided for consumer victims. (FN3) Thus, the Attorney General can
seek "restitution of cash or goods" but only on behalf of "a consumer or a
class of consumers."  9 V.S.A. { 2458(b)(2). (FN4)
     Although certain parts of the Act apply only to consumers, we are
unable to conclude that the entire Act is so limited. (FN5) The stated purpose
of the Act is broader, to "protect the public, and to encourage fair and
honest competition."  9 V.S.A. { 2451.  It is reasonable for the legislature
to determine that business persons have adequate private remedies in
existing laws, while special, new remedies are necessary to protect
individual consumers.  See Gramatan Home Investors Corp. v. Starling, 143
Vt. 527, 536,