Opinion ID: 677610
Heading Depth: 1
Heading Rank: 11

Heading: Unfair and deceptive business practices

Text: 132 The trustees' complaints allege that AY's actions constituted unfair and deceptive business practices under Haw.Rev.Stat. Sec. 480-2. This statute prohibits [u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. Haw.Rev.Stat. Sec. 480-2(a) (1991 Supp.). We have previously concluded that the Hawaii Supreme Court, if confronted with the question whether [this statute] applies to claims arising from securities transactions, would hold that it does not. Spinner Corp. v. Princeville Dev. Corp., 849 F.2d 388, 393 (9th Cir.1988). Although the trustees' claims do not arise directly from securities transactions, the reasoning set forth in Spinner precludes them from bringing an action against AY under the statute. 133 In Spinner, we noted first that the statute contains a provision requiring that it be construed in accordance with judicial interpretations of similar federal antitrust statutes. Haw.Rev.Stat. Sec. 480-3 (1991 Supp.). As we noted in Spinner, the statute is almost identical to Sec. 5(a)(1) of the Federal Trade Commission Act (FTCA), 15 U.S.C. Sec. 45(a)(1). See also Eastern Star, Inc. v. Union Bldg. Materials Corp., 712 P.2d 1148, 1154 (Haw.App.1985). This section is intended to 134 prevent such acts or practices which injuriously affect the general public as well as those which are unfair to competitors. In other words, [the statute] makes the consumer, who may be injured by an unfair trade practice, of equal concern, before the law, with the merchant or manufacturer injured by the unfair methods of a dishonest competitor. 135 American Fin. Services Ass'n v. F.T.C., 767 F.2d 957, 966-67 (D.C.Cir.1985) (quoting H.R.Rep. No. 1613, 75th Cong., 1st Sess. 3 (1937)), cert. denied, 475 U.S. 1011 (1986). The FTCA's prohibition on unfair or deceptive acts or practices in commerce is thus aimed at protecting consumers from unscrupulous merchants; to the best of our knowledge, the FTCA has never been applied to negligence or fraud suits by a corporation against its former officers, directors, and outside professional advisors. 136 Furthermore, we concluded in Spinner that the primary intent of the legislature was to protect consumers from unethical business practices resulting in relatively small commercial injuries. Spinner, 849 F.2d at 391 (emphasis added). 28 FPI and Agretech are not consumers and are thus not the type of plaintiffs envisioned by the legislature. 137 For both of these reasons, we conclude here that the Hawaii Supreme Court, if confronted with the question whether the Hawaii statute applies to claims by corporations (or their bankruptcy trustees) against their former officers or professional advisors, would hold that it does not. We therefore affirm the district court's dismissal of this cause of action.