Source: http://www.hawaii-attorney.net/blog/2011/09/03/consumer-rights-in-hawaii
Timestamp: 2019-04-18 13:12:45+00:00

Document:
H.R.S. § 480-2 is a powerful tool to protect consumers and investors from advertisers whose marketing materials have a “tendency to mislead.” Under H.R.S. § 480-2, an injured “investor or consumer” may be awarded treble damages, costs, and attorney’s fees under H.R.S. § 480-13. The Hawaii Supreme Court has upheld this statute in multiple opinions.
The United States Court of Appeals for the Ninth Circuit has also written an important opinion applying H.R.S. § 480-2 in the federal courts. Yokoyama v. Midland Nat’l Life Insurance Co., 594 F.3d 1087 (9th Cir. 2010). In Yokoyama, the Court affirmed that a person alleging a H.R.S. § 480-2 claim need not show that they were actually deceived. Rather, the § 480-2 claimant need only establish that the advertising material in question had “the capacity to deceive.” Yokoyama at 1093.
The facts of Yokoyama illustrate the power of the Act. In Yokoyama, the plaintiffs were a group of senior citizens living in Hawaii. Yokoyama v. Midland Nat’l Life Insurance Co., 243 F.R.D. 400, 401 (D. Hawaii 2007). Each purchased annuities sold by Midland National Life Insurance. Id. The plaintiffs did not purchase the annuities directly from Midland, but rather each plaintiff bought their annuities from an independent broker. Id. at 403 The independent brokers were required to give a prospective purchaser a brochure created by Midland prior to selling the annuity. Id. Additionally, the independent brokers were allowed to “discuss, promote, or disparage” the annuities, as long as they were truthful. Id. The buyers claimed that the brochures provided by Midland, but given to them by the independent brokers, were deceptive. Id.
The plaintiffs then brought a § 480-2 claim against Midland and asked the Court to certify their action as a class action. Yokoyama, 243 F.R.D. at 405. The District Court denied certification. Id. It reasoned that because each plaintiff was counseled by independent brokers, the individual plaintiffs would each have a different understanding of Midland’s brochure – some plaintiffs might not have even been deceived. Id. Thus, it determined that class certification would not properly serve the plaintiffs. Id.
The Ninth Circuit disagreed. On appeal, the Ninth Circuit determined that the District Court erred when it, in essence, required the plaintiffs to show that Midland’s brochure actually deceived them in order to state an H.R.S. § 480-2 claim. Yokoyama v. Midland Nat’l Life Insurance Co., 594 F.3d 1087, 1092 (9th Cir. 2010). Relying on Hawaii authority, the Ninth Circuit determined that a H.R.S. § 480-2 claim does not require that the plaintiff to actually be deceived. Id. The question is whether the brochure had “the capacity to deceive.” Id. The Ninth Circuit reversed the District Court’s decision and remanded for further proceedings. Id. at 1093.

References: § 480
 § 480
 § 480
 § 480
 v. 
 § 480
 § 480
 v. 
 § 480
 § 480
 v. 
 § 480