Opinion ID: 1830236
Heading Depth: 2
Heading Rank: 2

Heading: The Private Attorney General Statute

Text: The attorney general is provided broad statutory authority under Minn.Stat. § 8.31 to investigate violations of law regarding unlawful business practices barred by a variety of statutory prohibitions including the Consumer Fraud Act, and to seek injunctive relief and civil penalties on behalf of the state. See Minn.Stat. § 8.31, subds. 1, 3 (1998). The Private AG Statute, section 8.31, subdivision 3a, further provides that any person injured by a violation of the laws entrusted to the attorney general to investigate and enforce may recover damages together with costs and attorney fees: In addition to the remedies otherwise provided by law, any person injured by a violation of    [Minn.Stat. § 325F.69] may bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney's fees   . Minn.Stat. § 8.31, subd. 3a. The sweeping remedies of the Private AG Statute have raised concern about how broadly the legislature intended the statute to be applied, particularly as it relates to common law fraud actions and the recovery of attorney fees. See, e.g., Church of Nativity, 491 N.W.2d at 10 (Simonett, J., concurring in part and dissenting in part) (expressing concern that a consumer can claim attorney fees for almost any commercial transaction that fails). A brief history of the passage of the Private AG Statute sheds light on this issue and reveals the statutory purpose in providing incentives to injured private parties to enforce the unlawful business practices statutes as a substitute for the attorney general. On March 8, 1973, Senator Winston Borden, author of the bill, in a hearing before the Labor and Commerce Committee, stated that its goal was to: allow the individual person to bring a civil action for the damages he sustained    it's a great means of private enforcement. It's simply impossible for the Attorney General's Office to investigate and prosecute every act of consumer fraud in this state.    [And] if a[n] individual could bring an action, he can do some of the prosecuting, he can do some of the enforcing, he can provide some of the protection for himself and others that the Attorney General's Office    can not do today   . [13] Similarly, on March 30, 1973, Representative Sieben stated that the purpose of the Private AG Statute is to stop the unscrupulous    businessman who makes    false and deceptive ads, and with its adoption a private citizen may take the person to court    when the citizen has been defrauded and he may recover damages plus reasonable attorney's fees or injunctive relief. [14] Representative Sieben also referred to the importance of providing an incentive to consumers to privately enforce the fraudulent business practices laws: an operator who can    rip off a large number of citizens, and cease operating    may likely be able to do so with little threat of legal action. More stringent remedies are therefore needed.    [This bill] provides a route for private recovery for the victims of consumer fraud. [15] The Private AG Statute thus advances the legislature's intent to prevent fraudulent representations and deceptive practices with regard to consumer products by offering an incentive for defrauded consumers to bring claims in lieu of the attorney general. In Church of Nativity we acknowledged the legislative intent to eliminate financial barriers to the vindication of a plaintiff's rights    and to provide incentive for counsel to act as private attorney general. 491 N.W.2d at 8 (quoting Liess v. Lindemyer, 354 N.W.2d 556, 558 (Minn.App.1984)). We commented: Nativity's pursuit of a remedy has involved much time and labor; it has been difficult, lengthy and expensive. If there are no attorney fees awarded in this case, Nativity will spend virtually all of its damage award paying its attorneys. The private attorney general statute was intended to cover just this type of case. Id. at 8 (footnote omitted). Thus we held that the parish was entitled to the benefits of the Private AG Statute. See id. [16] The court of appeals has expressed reservations about broadening the scope of section 8.31 similar to those of Justice Simonett's dissent in Church of Nativity and has required a showing of public benefit to award attorney fees under the Private AG Statute. For example, in Liess, the court held that in considering a claim for an award of attorney fees under section 8.31, ordinarily a district court must take into account the nature, extent and outcome of the attorney's work [17] and in addition, it must take into account the degree to which the public interest is advanced by the suit,    otherwise, `every artful counsel could dress up his dog bite case' to come under an attorney's fees statute. 354 N.W.2d at 558 (quoting Boland v. City of Rapid City, 315 N.W.2d 496, 503 (S.D. 1982)) (citations omitted). Similarly, in Wexler v. Brothers Entertainment Group, the court held that [w]hen awarding attorney fees under the private attorney general statute, the trial court must consider the public interest policies underlying the statute. 457 N.W.2d 218, 222-23 (Minn.App.1990); see also Untiedt v. Grand Lab., Inc., Nos. C4-94-772, C0-94-851, 1994 WL 714308, at  (Minn.App. Dec. 27, 1994) (citing the rule in Liess and holding that because the trial court found that the cause of action would advance the public interest, the trial court considered the appropriate factors). [18] Appellant argues that the aim of the Private AG Statute is to encourage victims of fraud to bring claims and nowhere does it provide that attorney fees are contingent upon demonstrating that a cause of action creates a public benefit. Respondent contends that the Private AG Statute should not cover fraud arising from private disputes but only those where the fraud has the potential to deceive more than the single claimant and the lawsuit benefits the public. Respondent emphasizes that the purpose of the Private AG Statute is to protect public, not private, interests and that attorney fees should be awarded only if the record reflects proper consideration of the policies underlying the statute. A determination of the scope of the private remedies provision in the Private AG Statute must begin with the recognition that it was adopted by the legislature in 1973 [19] as part of the statutory charter for the duties and responsibilities of the attorney general and provides a reward to private parties for uncovering and bringing to a halt unfair, deceptive and fraudulent business practices, functions that, to that point, had been the responsibility of the attorney general. Since the Private AG Statute grants private citizens the right to act as a private attorney general, the role and duties of the attorney general with respect to enforcing the fraudulent business practices laws must define the limits of the private claimant under the statute. Minnesota Statutes § 8.01 (1998) provides that the attorney general shall appear for the state in civil lawsuits whenever, in the attorney general's opinion, the interests of the state require it. Minn.Stat. § 8.01. [20] In Slezak v. Ousdigian, we held that the attorney general: may institute, conduct, and maintain all such actions and proceedings as he deems necessary for the enforcement of the laws of the state, the preservation of order, and the protection of public rights.    He has the authority to institute in a district court a civil suit in the name of the state whenever the interests of the state so require. 260 Minn. 303, 308, 110 N.W.2d 1, 5 (1961) (citation omitted). The duty of the attorney general's office, and thus the purpose of any statute granting private citizens authority to bring a lawsuit in lieu of the attorney general, is the protection of public rights and the preservation of the interests of the state. The interest of the legislature in creating a supplemental force of private enforcement to address unlawful trade practices is clear from the testimony at committee hearings, [21] but it is equally clear that the sweep of the statute can be no broader than the source of its authority- that of the attorney general-whose duties are to protect public rights in the interest of the state. Conversely, it is not the responsibility of the attorney general to protect private or individual interests independent of a public purpose. See, e.g., Humphrey v. McLaren, 402 N.W.2d 535, 543 (Minn.1987) (stating that the attorney general has for a client the public,    [t]hus, a government litigator must take positions with the common public good in mind, unlike the private practitioner who seeks vindication of a particular result for a particular client). [22] We find further support for our holding that public interest must be demonstrated to state a claim under the Private AG Statute based on our conclusion that the legislature could not have intended to sweep every private dispute based on fraud, and falling within the CFA, into a statute where attorney fees and additional costs and expenses would be awarded, because to do so would substantially alter a fundamental principle of law deeply ingrained in our common law jurisprudence-that each party bears his own attorney fees in the absence of a statutory or contractual exception. See Church of Nativity, 491 N.W.2d at 10 (Simonett, J., concurring in part and dissenting in part); see also Barr/Nelson, Inc. v. Tonto's, Inc., 336 N.W.2d 46, 53 (Minn. 1983) (We have long held that attorney fees are not recoverable in litigation unless there is a specific contract permitting or a statute authorizing such recovery.). We have for as long presumed that statutes are consistent with the common law, and if a statute abrogates the common law, the abrogation must be by express wording or necessary implication. See In re Shetsky, 239 Minn. 463, 469, 60 N.W.2d 40, 45 (1953). We decline to construe legislative intent to abrogate the common law with regard to the attorney fees provision in the absence of a clear purpose to do so. Based on these considerations we hold that the Private AG Statute applies only to those claimants who demonstrate that their cause of action benefits the public. [23] We believe that this conclusion is consistent with the history and purpose of the office of the attorney general to prosecute misrepresentations involving only matters of public interest. [24] Appellant was defrauded in a single one-on-one transaction in which the fraudulent misrepresentation, while evincing reprehensible conduct, was made only to appellant. A successful prosecution of his fraud claim does not advance state interests and enforcement has no public benefit, and is not a claim that could be considered to be within the duties and responsibilities of the attorney general to investigate and enjoin. [25]