Opinion ID: 6491398
Heading Depth: 4
Heading Rank: 1

Heading: pre-June 28, 2002 unfair methods of competition claims

Text: On July 15, 1999, this court decided Robert’s Hawai’i School Bus, Inc. v. Laupahoehoe Transportation Co., 91 Hawai'i 224, 982 P.2d 853 (1999), essentially holding that there was no private claim for relief under HRS § 480-13 for unfair methods of competition in violation of HRS § 480-2. 22 Id. at 252, 982 P.2d at 881. In so holding, this court examined both HRS §§ 480-2 and -13 and the legislative history, particularly the 1965 and 1987 amendments. The 1965 legislative history underlying HRS § 480-2 includes the following: H.B. No. 136 would amend the Hawai'i Antitrust Act by adding a new section declaring unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce unlawful. The purpose of the bill is to provide the Attorney General with much needed authority to bring proceedings to enjoin unfair and deceptive business practices by which consumers are defrauded and the economy of the State is harmed. There has been established in the Attorney General’s Office of a Fair Business Practices Division. That division has been assigned the responsibility for developing and administering an effective fair business program to protect both consumers and honest businessmen from fraudulent, unfair or deceptive business practices. The authority to stop and prevent practices of this nature, which H.B. No. 136 would provide, is essential to an effective fair business program. The Hawaii Antitrust Act now contains appropriate enforcement provisions, including authority to the Attorney General to bring proceedings to enjoin any violations of the provisions of the act. The amendment of the act, as provided by H.B. 136, ivould make all of its enforcement provisions, except the criminal provisions, applicable to the amendment. Primarily, as indicated above, it would empower the Attorney General to maintain suits to enjoin the continuation of 'unfair methods of competition and 'unfair or deceptive acts or practices in the conduct of trade and commerce. Id. at 250, 982 P.2d at 879 (emphases in original) (footnote, citation, and ellipses omitted) (quoting Hse. Stand. Comm. Rep. No. 55, in 1965 House Journal, at 538). With respect to the 1987 amendment, this court stated: The legislative history relating to the 1987 amendment also stated in relevant part: The purposes of this bill were to establish definitions of “class action” and “de facto class action” and to make several amendments to Chapter 480, [HRS], including the following: (1) Provided that the $1,000 minimum recovery provision is only applicable to consumer suits based upon unfair or deceptive practices brought under Section 480-2, unfair and deceptive practices; [[Image here]] (5) Provided that suits based upon unfair or deceptive acts or practices under Section 480-2 may be brought only by consumers, the Attorney General, or the Office of Consumer Protection, in effect precluding its application to private disputes between businessmen. Your Committee finds that current law is unclear and the procedure confusing. Upon further consideration, your Committee has made numerous amendments to the bill including the following: [[Image here]] 2. Amended Section 180-2, [HRS], by requiring that the court and Office of Consumer Protection shall be guided by rules, regulations, and decisions of the Federal Trade Commission and the federal courtfs] and by providing that it shall not be necessary to show that the proceeding or suit brought under this section would be in the public interest and that no other person other than a consumer, the Attorney General or the director of the Office of Consumer Protection may bring an action under this section. The amendment to Section 180-2 is intended to clarify actions of unfair and deceptive acts and is not intended to affect suits based upon unfair methods of competition[.] Id. at 250-51, 982 P.2d at 879-80 (ellipses, brackets, and emphases in original) (quoting Hse. Conf. Comm. Rep. No. 104, in 1987 House Journal, at 1053). Accordingly, this court “interpreted] the legislative history to the 1965 and 1987 amendments [as] not ... recognizing] or creating] a private claim for relief under HRS § 480-13 for unfair methods of competition in violation of HRS § 480-2.” Id. at 251, 982 P.2d at 880 (footnote omitted) (emphasis in original). Thereafter, in 2002, the legislature passed Senate Bill No. 1320 (S.B. 1320), which was signed into law as Act 229, amending HRS § 480-2 by adding subsection (e), which provides: “Any person may bring an action based on unfair methods of competition declared unlawful by this section.” See 2002 Haw. Sess. L. Act 229, § 2 at 916-17 (emphasis added). Section 6 of Act 229 stated that the Act “shall take effect upon approval.” Act 229 was approved on June 28, 2002. See 2002 Haw. Sess. L. Act 229, at 918. The plaintiffs maintain that the amendment effectively overruled only that portion of the decision in Robert’s Hawai'i that held that the legislature did not extend a private right of action for claims of unfair methods of competition. See Robert’s Hawai'i, 91 Hawai'i at 251, 982 P.2d at 880 (“[This court] ... interprets] the legislative history to the 1965 and 1987 amendments not to recognize or create a private claim for relief ... for unfair methods of competition in violation of HRS § 480-2. This interpretation in no way limits consumer claims of unfair or deceptive acts or practices under HRS § 480-2[.]” (Emphasis in original.)). Because, in the plaintiffs’ view, the amendment “provided the clarification this [c]ourt invited in [Robert’s Hawai'i],’’ the plaintiffs submit that their claims of violation of HRS § 480-2 are not limited to those acts committed after June 28, 2002. We do not believe the amendment “overruled” Robert’s Hawai‘i as the plaintiffs suggest, but instead simply provided a new right that did not previously exist. The House Committees on Consumer Protection and Commerce and Judiciary and Hawaiian Affairs stated: The purpose of [S.B. 1320] is to permit private actions for unfair methods of competition .... Your Committees find that only the Attorney General may bring an action to enforce the antitrust, or unfair methods of competition law.... This bill amends the latv to clearly give businesses and consumers the right to enforce the law if the Attorney General declines to commence an action based on the claim. Hse. Stand. Comm. Rep. No. 1118, in 2002 House Journal, at 1665 (emphases added); see also Sen. Stand. Comm. Rep. No. 448, in 2001 Senate Journal, at 1116-17 (“The purpose of [S.B. 1320] is to allotv a private citizen to bring an action based on unfair methods of competition. ... Current law does not allow private individual actions based on unfair methods of competition, although actions based on unfair or deceptive acts or practices are allowed. This measure corrects that inconsistency which has produced uncertainty in the courts.” (Emphasis added.)); Sen. Stand. Comm. Rep. No. 931, in 2001 Senate Journal, at 1295 (“Under current law, it is clear that consumers may bring a direct cause of action for unfair and deceptive practices, but unclear that consumers may bring a claim of unfair methods of competition. This measure would add that protective provision.” (Emphasis added.)). The 2002 amendment clearly created a private claim for relief for unfair methods of competition for claims arising after the June 28, 2002 effective date. Neither the language of the statute itself nor the legislative history of the amendment give any expressed indication that the amendment should be applied retroactively. See HRS § 1-3 (1993) (“No law has any retrospective operation, unless otherwise expressed or obviously intended.”); Clark v. Cassidy, 64 Haw. 74, 77 n. 6, 636 P.2d 1344, 1347 n. 6 (1981) (“It is a general rule in most jurisdictions that[ ] statutes or regulations which say nothing about retroactive application are not applied retroactively if such a construction will impair existing rights, create new obligations[,] or impose additional duties with respect to past transactions.” (Citation omitted.)). Thus, retrospective application of HRS § 480-2(e) is not permitted inasmuch as the legislature did not expressly or obviously indicate its intention that HRS § 480-2(e) apply retroactively. Accordingly, we hold that the circuit court correctly concluded that the plaintiffs’ claims of unfair methods of competition based upon HMSA’s alleged wrongful acts prior to June 28, 2002 are barred inasmuch as HRS § 480—2(e) does not apply retroactively.