Opinion ID: 3015757
Heading Depth: 2
Heading Rank: 2

Heading: Justifiable Reliance and the UTPCPL

Text: Tran alleged that MetLife violated the following provisions of Pennsylvania’s UTPCPL, all of which deal with various forms of “unfair methods of competition” and “unfair or deceptive acts or practices”: (1) § 201-2(4)(v)—“[r]epresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have”; (2) § 201-2(4)(vii)—“[r]epresenting that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model, if they are of another”; (3) § 201-2(4)(ix)—“[a]dvertising goods or services with the intent not to sell them as advertised”; (4) § 201- 2(4)(xiv)—“[f]ailing to comply with the terms of any written guarantee or warranty given to the buyer at, prior to or after a contract for the purchase of goods or services is made”; and (5) 21 § 201-2(4)(xv)—“[k]nowingly misrepresenting that services, replacements or repairs are needed if they are not needed.” In his brief Tran contended that because these alleged violations of the UTPCPL are based on MetLife’s unfair business practices and deceptive conduct, and not on allegations of fraud, the District Court should have required him to establish only ordinary reliance, rather than justifiable reliance, with respect to these claims. Tran retreated from this position at oral argument. This was wise as recent Pennsylvania decisions substantially weaken his argument. The “underlying foundation” of the UTPCPL “is fraud prevention.” Weinberg v. Sun Co., Inc., 777 A.2d 442, 446 (Pa. 2001) (internal quotation omitted). The Pennsylvania Supreme Court has noted that “[n]othing in the legislative history [of the UTPCPL] suggests that the legislature ever intended statutory language directed against consumer fraud to do away with the traditional common law elements of reliance and causation.” Id. Recently, that Court also held that, “[t]o bring a private cause of action under the UTPCPL, a plaintiff must show that he justifiably relied on the defendant’s wrongful conduct or representation and that he suffered harm as a result of that reliance.” Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 438 (Pa. 2004) (emphasis added) (citing, inter alia, Weinberg, 777 A.2d at 446). In addition, the Pennsylvania Superior Court, which had previously agreed with Tran’s position that plaintiffs were not 22 required to prove the elements of common law fraud with regard to certain sections of the UTPCPL, see DiLucido v. Terminix Int’l, Inc., 676 A.2d 1237, 1241 (Pa. Super. Ct. 1996), changed its position on this issue in its 2004 decision in Toy. In that case, the Court reasoned that Weinberg and Yocca, taken together, dictate that a distinction between fraud and non-fraud claims under the UTPCPL cannot be made and that its earlier holding in DiLucido was thus incorrect. Toy, 863 A.2d at 10–11. In particular, Toy stated: Upon our review of the [Pennsylvania] Supreme Court’s decision in Weinberg, we must conclude that every plaintiff asserting a private cause of action under the UTPCPL must demonstrate his/her justifiable reliance on the misrepresentation or wrongful conduct. As the decision in Weinberg emphasized that the UTPCPL was designed to prevent fraud and that the legislature did not intend to remove the common law elements of reliance and causation that attend a fraud action, plaintiffs must demonstrate the level of reliance that accompanies a common law fraud claim. Id. at 11 (emphasis added). We are not bound by Toy’s holding (as it is not a Pennsylvania Supreme Court decision), but we are persuaded by 23 its reasoning, which we are obliged to consider. Gruber v. Owens-Illinois Inc., 899 F.2d 1366, 1369 (3d Cir. 1990). Because Toy thoroughly surveys the relevant Pennsylvania Supreme Court case law and because the Yocca holding regarding justifiable reliance in UTPCPL claims is so broad, we believe Toy accurately predicts how the Pennsylvania Supreme Court would rule on this issue. We therefore reject Tran’s argument that he is freed from proving justifiable reliance in connection with his UTPCPL claims and affirm the District Court’s contrary ruling on this issue.12 For the reasons stated in Section III(A), supra, however, we also remand Tran’s UTPCPL claims.