Opinion ID: 2600418
Heading Depth: 4
Heading Rank: 1

Heading: What is required to establish causation?

Text: ¶ 44 This court has yet to clearly define the proof required to establish causation in a CPA claim. Pickett II, 145 Wash.2d at 196-97, 35 P.3d 351. ¶ 45 After the legislature authorized a private right of action under chapter 19.86 RCW, this court initially required a plaintiff to establish only three elements. [T]he conduct complained of must: (1) be unfair or deceptive; (2) be within the sphere of trade or commerce; and (3) impact the public interest. Anhold v. Daniels, 94 Wash.2d 40, 45, 614 P.2d 184 (1980). A plaintiff could establish the public interest element per se by showing that the defendant violated a statute containing a specific legislative declaration of public interest impact. Id. at 43, 614 P.2d 184. Alternatively, a plaintiff could show that: (1) [T]he defendant by unfair or deceptive acts or practices in the conduct of trade or commerce has induced the plaintiff to act or refrain from acting; (2) the plaintiff suffers damage brought about by such action or failure to act; and (3) the defendant's deceptive acts or practices have the potential for repetition. Id. at 46, 614 P.2d 184 (emphasis added). ¶ 46 In a subsequent case involving a private dispute, Division Two of the Court of Appeals held that the Anhold public interest test required the plaintiff to establish a causal link between the defendant's unfair or deceptive act or practice and the plaintiff's injury. Nuttall v. Dowell, 31 Wash.App. 98, 111, 639 P.2d 832 (1982). Nuttall described the Anhold test as an inducement offered by the defendant, which has the effect of either producing action or inaction on the part of plaintiff resulting in injury and damage. Id. In Nuttall, a purchaser of real estate brought a private CPA action against a real estate broker for misrepresenting the property boundary. Id. at 103-04, 639 P.2d 832. The court concluded that the purchaser did not rely on the broker's word that the boundary was correct because the purchaser conducted his own independent investigation of the boundary. Id. at 111, 639 P.2d 832. It held that a plaintiff does not establish a causal relationship between the plaintiff's injury and a misrepresentation of fact where the plaintiff does not convince the trier of fact that he or she relied upon that misrepresentation. Id. ¶ 47 Hangman Ridge sought to clarify the Anhold public interest element of a CPA claim. 105 Wash.2d at 789-90, 719 P.2d 581. It noted, [w]here the transaction [is] essentially a private dispute, it may be more difficult to show that the public has an interest in the subject matter. Id. at 790, 719 P.2d 531 (citations omitted). It concluded Anhold's `inducement-damage-repetition' test is not the best vehicle for showing that the public was or will be affected by the act in question. Id. at 789, 719 P.2d 531. It stated, it is the likelihood that additional plaintiffs have been or will be injured in exactly the same fashion that changes a factual pattern from a private dispute to one that affects the public interest. Id. at 790, 719 P.2d 531 (citing McRae v. Bolstad, 101 Wash.2d 161, 166, 676 P.2d 496 (1984)). Instead of the three pronged public interest test set out in Anhold, Hangman Ridge established a five factor test for private CPA claims. Id. ¶ 48 In clarifying the public interest element, Hangman Ridge announced two new elements of a CPA claim. Id. at 792-93, 719 P.2d 531. The fourth element required a showing that plaintiff was injured in his or her `business or property'. Id. at 792, 719 P.2d 531 (quoting former RCW 19.86.090 (1987)). The fifth element required the plaintiff to show causation. Id. at 792-93, 719 P.2d 531. With regard to causation, the court noted: A causal link is required between the unfair or deceptive acts and the injury suffered by plaintiff. This causation element, like the injury element, has been foreshadowed by our previous opinions. The Anhold inducement prong hints at a causation requirement. Moreover, the need to find a causal link between the alleged acts and the plaintiff's injury has been the focus of a number of prior decisions of both this court and the Court of Appeals. Id. at 793, 719 P.2d 531 (emphasis added). In announcing the new causation element, Hangman Ridge did not expressly disavow the inducement or reliance requirements applied in Anhold and Nuttall. However, Hangman Ridge did not apply the new causation element because it held that there had been no unfair or deceptive act or practice. Id. at 794-95, 719 P.2d 531. It left open the question of what is required to establish a causal link. ¶ 49 Indoor Billboard argues that Hangman Ridge established that a plaintiff need only show that it lost money to show causation, relying again on Pickett I. However, as we have already noted, this court subsequently reversed Pickett I on other grounds, finding Pickett I 's analysis of causation suspect. See Pickett II, 145 Wash.2d at 191, 35 P.3d 351. Pickett I held that [c]ausation inheres in the fact that the plaintiffs purchased cruise tickets. Pickett I, 101 Wash.App. at 920, 6 P.3d 63. It reasoned that because the CPA was to be liberally construed and the cruise ship line had imposed fees that were clearly not what it said they were, [a]ny other interpretation would effectively undermine class actions based on the Washington CPA. Id. Pickett II called Pickett I's conclusion that causation is established if the plaintiff shows that he or she loses money debatable and commented that the cases Pickett I cited did not support the appellate court's conclusion. Pickett II, 145 Wash.2d at 197, 35 P.3d 351. It concluded that [u]nder the posture of [the] case, . . . this is a debatable question without clear answer under Washington law at the time of the parties' settlement and presented a risk to the Plaintiffs class favoring settlement.  Id. (emphasis added). Although we agree the CPA is to be liberally construed, Pickett I carries this construction too far. Therefore, we reject Indoor Billboard's argument that causation may be established merely by a showing that money was lost. ¶ 50 Integra argues that proof that the reliance requirement survives Hangman Ridge is found in Robinson. However, Robinson involved a failure to disclose, not an affirmative misrepresentation, so it does not support Integra's argument. 106 Wash.App. at 119, 22 P.3d 818. ¶ 51 WSTLA and the AG suggest that Hangman Ridge replaced the reliance/inducement requirement with a proximate cause standard. Br. of Amicus Curiae WSTLA at 8-9 (citing 6A Washington Practice: Washington Pattern Jury Instructions: Civil 310.07, at 274 (5th ed. 2005) (WPI); Wash. State Physicians Ins. Exch. & Ass'n v. Fisons Corp., 122 Wash.2d 299, 314, 858 P.2d 1054 (1993); Schmidt v. Cornerstone Invs., Inc., 115 Wash.2d 148, 167-68, 795 P.2d 1143 (1990)); Br. of Amicus Curiae AG at 12-13 (citing Fisons, 122 Wash.2d at 314, 858 P.2d 1054; WPI 310.07, at 274-75). ¶ 52 `Proximate cause' is defined in WPI 310.07 as a cause which in direct sequence [unbroken by any new independent cause] produces the injury complained of and without which such injury would not have happened. [There may be one or more proximate causes of an injury.]. In the comments, WPI 310.07 cites this court's holding in Pickett II in which we stated, [w]hether individual reliance is required for causation under the CPA is a `debatable question without a clear answer under Washington law.' WPI 310.07, at 274 cmt. (quoting Pickett II, 145 Wash.2d at 197, 35 P.3d 351). The comments also cite to WPI 15.01 for the traditional definition of `proximate cause.' WPI 310.07, at 274 cmt. The comments under WPI 15.01 indicate that this court favors the `direct sequence' and `but for' definitions of `proximate cause.' 6 WPI 15.01, at 182 cmt. (5th ed.2005) (citing Alger v. Mukilteo, 107 Wash.2d 541, 730 P.2d 1333 (1987)) (`direct sequence'); Tyner v. Dep't of Soc. & Health Servs., 141 Wash.2d 68, 82, 1 P.3d 1148 (2000) (`but for') (internal quotation marks omitted) (quoting Schooley v. Pinch's Deli Mkt., Inc., 134 Wash.2d 468, 478, 951 P.2d 749 (1998)). Applying WPI 15.01 to the causation analysis for a CPA claim, a plaintiff would have to establish that but for the defendant's unfair or deceptive act or practice the plaintiff's injury would not have occurred. ¶ 53 Two cases, Schmidt and Fisons, that postdate Hangman Ridge applied the proximate cause standard articulated in WPI 15.01. ¶ 54 Schmidt involved a defendant who attempted to sell property that was in disrepair based on an inflated appraisal. 115 Wash.2d at 167, 795 P.2d 1143. We held that causation was established because the [p]laintiffs testified at various stages throughout the litigation that had they not been shown the inflated appraisal, they never would have made the investment which led to the injury now complained of. Id. at 168, 795 P.2d 1143. Integra argues Schmidt did not eliminate the reliance test because the concept of reliance was implicit in the court's ruling. But Schmidt's description is compatible with the definition of `proximate cause' in WPI 15.01 because it effectively concluded that, but for the defendant's inflated appraisal, the plaintiffs would not have made the investment. ¶ 55 Fisons involved a physician who brought a claim against a drug company alleging that the drug company had engaged in unfair or deceptive act or practices by failing to warn the physician of the dangers related to a drug he prescribed to his patients. 122 Wash.2d at 311, 858 P.2d 1054. The issue was whether the jury was properly instructed that it had to find that the defendant's unfair or deceptive act or practice was a proximate cause of the injury to the plaintiff, not whether reliance on the unfair or deceptive act or practice was part of the causation element of a CPA claim. Id. at 314, 858 P.2d 1054. Integra argues Fisons is not analogous because it involved a failure to warn rather than a claim of affirmative misrepresentation and a failure to warn does not implicate the reliance standard because a party cannot rely on something it was never aware of in the first place. However, Fisons clearly acknowledged that a proximate cause jury instruction was appropriate with respect to the causation element of a CPA claim. Id. ¶ 56 We conclude where a defendant has engaged in an unfair or deceptive act or practice, and there has been an affirmative misrepresentation of fact, our case law establishes that there must be some demonstration of a causal link between the misrepresentation and the plaintiff's injury. Indoor Billboard urges us to adopt a per se rule and hold that payment of Integra's invoice is per se sufficient to establish the proximate cause of plaintiff's damages. We reject Indoor Billboard's per se rule because mere payment of an invoice may not establish a causal connection between the unfair or deceptive act or practice and plaintiff's damages. Proximate cause is a factual question to be decided by the trier of fact. Payment of an invoice may or may not be sufficient to establish a causal connection between the misrepresentation of fact and damages, but payment of the invoice may be considered with all other relevant evidence on the issue of proximate cause. ¶ 57 We hold that the proximate cause standard embodied in WPI 15.01 is required to establish the causation element in a CPA claim. A plaintiff must establish that, but for the defendant's unfair or deceptive practice, the plaintiff would not have suffered an injury.