Court Opinion

ID: 4660732
Source: CourtListenerOpinion
Date Created: 2021-02-17 14:12:42.048468+00
Date Added: 2024-06-11T08:02:08.566788
License: Public Domain

[J-31-2020]
                   IN THE SUPREME COURT OF PENNSYLVANIA
                              WESTERN DISTRICT

   SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

 GARY L. GREGG AND MARY E. GREGG,               :   No. 29 WAP 2019
                                                :
                     Appellees                  :   Appeal from the Order of the
                                                :   Superior Court entered September
                                                :   12, 2018 at No. 1504 WDA 2017,
              v.                                :   affirming the Judgment of the Court
                                                :   of Common Pleas of Allegheny
                                                :   County entered September 27, 2017
 AMERIPRISE FINANCIAL, INC.,                    :   at No. GD 01-006611.
 AMERIPRISE FINANCIAL SERVICES,                 :
 INC., RIVERSOURCE LIFE INSURANCE               :   ARGUED: May 21, 2020
 COMPANY AND ROBERT A. KOVALCHIK,               :
                                                :
                     Appellants                 :

                                       OPINION

JUSTICE WECHT                                  DECIDED: FEBRUARY 17, 2021
      In 1999, Gary and Mary Gregg sought the expertise of Robert A. Kovalchik, a

financial advisor and insurance salesperson for Ameriprise Financial, Inc. Engaging in

what the trial court would later conclude to be deceptive sales practices, Kovalchik made

material misrepresentations to the Greggs to induce them to buy certain insurance

policies. The Greggs ultimately sued Ameriprise Financial, Inc., Ameriprise Financial

Services, Inc., Riversource Life Ins. Co., and Kovalchik (collectively, Ameriprise) under

Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“CPL”), 73 P.S. §
201-2(4)(xxi).1 The Greggs’ complaint also asserted, inter alia, common law claims for

negligent misrepresentation and fraudulent misrepresentation.

         The case proceeded to a jury trial on the common law claims, resulting in a defense

verdict. The CPL claim proceeded to a bench trial. After the trial court ruled in favor of

the Greggs on that CPL claim, Ameriprise filed a motion for post-trial relief arguing (among

other points) that the Greggs failed to establish that Kovalchik’s misrepresentations were,

at the very least, negligent, a finding that Ameriprise asserted was required to establish

deceptive conduct under the CPL.

         The trial court denied relief, and the Superior Court affirmed. Like the trial court,

the Superior Court concluded that the Greggs were not required to prevail on the common

law claims of fraudulent misrepresentation or negligent misrepresentation in order to

succeed on their CPL claim. Gregg v. Ameriprise Fin., 195 A.3d 930, 936 (Pa. Super.

2018).     Applying Commonwealth v. TAP Pharm. Products, Inc., 36 A.3d 1197 (Pa.

Cmwlth. 2011), rev’d on other grounds, 94 A.3d 350 (Pa. 2014), the Superior Court held

that the test for deceptive conduct under the CPL is whether the conduct has the tendency

or capacity to deceive, without regard to the actor’s state of mind. Gregg, 195 A.3d at

939.

         On appeal, this Court is tasked with determining whether, as the Superior Court

held, a strict liability standard applies to the Greggs’ CPL claim. A plain language analysis

of the relevant statutory provision leads inexorably to the conclusion that deceptive

conduct under the CPL is not dependent in any respect upon proof of the actor’s state of

mind. The Superior Court’s holding is consistent not only with the plain language of the

CPL, but also with our precedent holding that the CPL is a remedial statute that should

1       This section, known as the “catch-all” provision, prohibits anyone who advertises,
sells, or distributes good or services from “[e]ngaging in any . . . fraudulent or deceptive
conduct which creates a likelihood of confusion or misunderstanding” during a
transaction. 73 P.S. § 201-2(4)(xxi).

                                        [J-31-2020] - 2
be construed broadly in order to comport with the legislative will to eradicate unscrupulous

business practices. See Commonwealth by Creamer v. Monumental Props., Inc., 329

A.2d 812, 817 (Pa. 1974). Accordingly, we affirm.

       In 1999, Kovalchik held himself out as someone having skill, training, and expertise

in insurance and investment products and solicited the Greggs to become his customers.

Meeting with his new clients, Kovalchik offered a review of the Greggs’ financial worth,

investment goals, and insurance products. Kovalchik encouraged the Greggs to rely

upon his advice and counsel, and to trust him to achieve their financial goals. This

included delegating investment decisions to Kovalchik. In the course of consulting with

Kovalchik, the Greggs revealed that they owned seven Prudential Life Insurance policies

with a combined value of $121,000. Kovalchik advised the Greggs to liquidate these

policies and place the assets into IDS Life Insurance, a corporation that Riversource Life

Insurance later acquired.

       Kovalchik advised the Greggs to purchase a new Flexible Premium Variable Life

Insurance Policy (the “Policy”) for Mr. Gregg with a spousal rider for Mrs. Gregg. In

addition, Kovalchik persuaded the Greggs to surrender their existing IRA accounts and

use those funds to purchase new IRAs through IDS. Finally, Kovalchik advised the

Greggs that if they also gave him $300 every month, that money would increase the

savings portion of the Policy. Kovalchik’s sales pitch led the Greggs to believe that, if the

Greggs purchased the new Policy and made annual payments, the Policy would accrue

significant cash value that they could use to fund their retirement.

       The Greggs followed Kovalchik’s advice. The Greggs purchased the Policy; rolled

over their existing IRAs into new IRAs with IDS; surrendered the proceeds of their seven

Prudential Life Insurance policies; provided Kovalchik with a check for $300; and

authorized an automatic monthly withdrawal of $300 from their checking account to cover

                                      [J-31-2020] - 3
the savings portion of the Policy. Accordingly, Prudential sent several checks to IDS from

the liquidated insurance policies.

       Unbeknownst to the Greggs, Kovalchik divided their $300 payment between the

Policy and two IRAs. When Prudential sent a check for $11,601.34 to the Greggs,

Kovalchik promised to deposit approximately $9,500 from this check into the Policy.

Instead, Kovalchik put $1,700 into each of the new IRAs. Kovalchik put the balance of

these proceeds into a new AXP Growth Fund account that he opened for the Greggs.

Despite his assertions, Kovalchik did not place any of the $9,500 into the Policy. Each

IRA transaction increased Kovalchik’s commission via a surcharge of 5.75%. Further,

upon Kovalchik’s advice, the Greggs declined to enroll Mrs. Gregg in an Air Force benefits

plan that would have paid military benefits to Mrs. Gregg if Mr. Gregg died. The Greggs

also began sending Kovalchik an additional monthly check, which they believed was

going toward the Policy. Instead, Kovalchik placed these funds into the AXP Growth

Fund, again increasing Kovalchik’s commissions with a surcharge of 5.75%.

       In January 2001, the Greggs received a class-action notice that led them to believe

that the insurance companies had broken the law.           The Greggs sued Ameriprise,

Kovalchik, and IDS Life Insurance Company, asserting causes of action for negligent

misrepresentation, fraudulent misrepresentation, violation of the catch-all provision of the

CPL, breach of fiduciary duty, and negligent supervision. All claims related to the Greggs’

purchase of the Policy. The Greggs alleged that Kovalchik misrepresented that the initial

lump-sum payment and a one-time payment of $300 would fund the Policy for its term,

and that the Policy would accrue significant cash value based upon an initial payment

and annual payments thereafter.

       In response to Ameriprise’s motion for summary judgment, the trial court dismissed

the Greggs’ negligent supervision claim. On September 16, 2014, the case proceeded

                                      [J-31-2020] - 4
to a jury trial on the Greggs’ common law claims for breach of fiduciary duty, fraudulent

misrepresentation, and negligent misrepresentation. Following trial, the trial court granted

Ameriprise’s motion for directed verdict on the breach of fiduciary duty claim. The jury

returned a verdict in favor of Ameriprise on the claims for fraudulent and negligent

misrepresentation.

       The CPL count, as the sole remaining claim, was submitted to the trial court based

upon the evidence that had been introduced during the jury trial. Ameriprise argued that

the jury verdict in its favor on the common law negligent misrepresentation claim barred

a verdict in the Greggs’ favor on the statutory claim under principles of res judicata and

collateral estoppel. The trial court disagreed. On December 17, 2014, the trial court

entered a verdict in the Greggs’ favor for $52,431.29, which represented the premium the

Greggs had paid to the insurance companies plus interest, with a deduction for the

amount the insurance companies had already paid to the Greggs in September 2012. On

January 6, 2015, the Court granted the Greggs’ request for attorneys’ fees and costs

under the CPL.

       Ameriprise appealed, raising two issues, only one of which remains relevant at this

juncture.2 Ameriprise argued that the jury’s verdict on the common law misrepresentation

claims required the trial court to dismiss the Greggs’ CPL claim in accord with the

doctrines of res judicata and collateral estoppel.

       In an opinion filed pursuant to Pa.R.A.P. 1925(a), the trial court explained that

there was no state of mind required to sustain a private cause of action under the catch-

all provision of the CPL. The trial court distinguished the absence of a state of mind

requirement under the CPL from the common law claims of fraudulent or negligent

2     Ameriprise’s second issue concerned the amount of damages, and was premised
upon Ameriprise’s argument that the trial court had failed to account for the value of the
insurance coverage Ameriprise had provided to the Greggs from 1999-2012.

                                      [J-31-2020] - 5
misrepresentation, which required proof of intent to deceive or negligence, respectively.

See TAP Pharm. Products, Inc., 36 A.3d at 1255 (holding that a jury’s defense verdict on

common law claims for fraudulent and negligent misrepresentation did not bar a public

CPL enforcement action). Applying TAP, the trial court held that “the test for deceptive

conduct under the [CPL] is ‘essentially whether the conduct has the tendency or capacity

to deceive, which is a lesser, more relaxed standard than that for fraud or negligent

misrepresentation.’” Tr. Ct. Op. at 3 (quoting TAP, 36 A.3d at 1253).

       According to the trial court, the evidence demonstrated that Ameriprise’s conduct

created a likelihood of confusion or misunderstanding in the Greggs’ dealings with

Ameriprise. Even if Kovalchik did not directly misrepresent the cost of the Policy to the

Greggs, the trial court found, Kovalchik failed to explain clearly and fully the cost and

terms of the Policy. Kovalchik’s explanations left the Greggs with the reasonable belief

that they would not have to pay any additional money to fund the Policy once their existing

policies were transferred to Ameriprise. The trial court additionally noted that the Greggs

relied upon Ameriprise to their financial detriment when they elected to forego the

purchase of the survivor benefit option for Mr. Gregg’s military pension and instead

cashed in their whole life policies to purchase the variable life insurance policy

recommended by Kovalchik. Crediting the Greggs’ testimony, the trial court found that

they had proved all elements of a CPL claim by a preponderance of the evidence.

       On appeal to the Superior Court, Ameriprise again argued that the defense verdict

on the common law claims of fraudulent and negligent misrepresentation precluded

liability under the CPL by application of res judicata and collateral estoppel principles.

Gregg, 195 A.3d at 935. According to Ameriprise, the Greggs were required to establish,

at a minimum, negligent misrepresentation in order to establish liability under the catch-

all provision of the CPL.

                                     [J-31-2020] - 6
       Like the trial court, the Superior Court rejected this argument. The Superior Court

held that the Greggs could prevail on their CPL claim without proof of Ameriprise’s state

of mind. The Superior Court reasoned that, by “eliminating the common law state of mind

element (either negligence or intent to deceive),” id. at 940 (quoting TAP, 36 A.3d at

1253), the General Assembly “imposed strict liability on vendors who deceive consumers

by creating a likelihood of confusion or misunderstanding in private, as well as public,

causes of action.” Id. Neither carelessness nor intent, which is required for negligent or

fraudulent misrepresentation claims, respectively, are required for claims under the catch-

all provision of the CPL. Id. Rather, what the statute requires is, according to the Superior

Court, a likelihood of confusion or misunderstanding by the consumer. Id. at 939.

       Ameriprise sought allowance of appeal in this Court.         We granted review to

determine:

       Whether the Superior Court improperly held that a strict liability standard
       applies to a claim under the “catch-all” provision of the [CPL] as amended
       in 1996, even though the provision expressly requires proof of “fraudulent
       or deceptive conduct.”
Gregg v. Ameriprise Fin., Inc., 216 A.3d 222 (Pa. 2019). This question involves statutory

interpretation, and therefore presents a question of law. Meyer v. Comty. Coll. of Beaver

Co., 93 A.3d 806, 813 (Pa. 2014). Our scope of review is plenary, and our standard of

review is de novo. Id.

       Ameriprise argues that “deceptive conduct” as used in the catch-all provision is the

act of intentionally giving a false impression or recklessly making a false representation

with the intent that the other person should rely on it. Relying on various dictionary

definitions of “deceit” and “deception,” Ameriprise argues that the Court should construe

“deceptive” in the catch-all provision to depend upon the actor’s intent to mislead.

       Ameriprise further argues that the CPL was enacted as a fraud prevention statute.

Consistent with the legislature’s intent to eradicate fraud, Ameriprise urges a reading of

                                      [J-31-2020] - 7
the catch-all provision in which the terms “fraudulent” and “deceptive” are synonymous.

Consistent with this interpretation, Ameriprise argues that the Greggs were required to

prove more than mere confusion or misunderstanding. Examining the legislative history

of the CPL, Ameriprise asserts that the catch-all provision was amended in 1996 to

encompass “deceptive conduct” in order to combat telemarketing schemes, not to impose

strict liability on vendors of goods and services. Had the General Assembly intended to

create a strict liability offense, Ameriprise believes, it would have done so by including

language imposing strict liability.

         Finally, Ameriprise argues that the Superior Court should not have relied upon TAP

because TAP involved a public enforcement action under the CPL, and is therefore

inapplicable to private causes of action.        Ameriprise believes that this distinction is

important because, in a public action, the Attorney General is not required to prove that

the consumer relied upon the fraudulent or deceptive conduct or that the statements

caused actual harm. In a private action, however, this Court has held that reliance and

causation are required. See Toy v. Metropolitan Life Ins. Co., 928 A.2d 186, 202-03 (Pa.

2007).

         In support of Ameriprise, amici curiae Pennsylvania Coalition for Civil Justice

Reform, Pennsylvania Bankers Association, Pennsylvania Health Care Association,

Pennsylvania Manufacturers’ Association, UPMC, American Property Casualty Insurance

Association, American Tort Reform Association, Chamber of Commerce, and National

Federation of Independent Business argue that the Superior Court’s conclusion is wrong

as a matter of law. Amici question why, if the legislature intended to transform the catch-

all provision from one requiring proof of fraudulent intent to one of strict liability, it did not

do so expressly. Amici curiae Pennsylvania Association of Realtors and Pennsylvania

Builders Association advance the same argument, and assert that applying a strict liability

                                        [J-31-2020] - 8
standard under the catch-all provision will subject millions of consumer transactions to

new liability and will open the floodgates of litigation.

       In opposition, the Greggs argue that the term “deceptive” in the consumer

protection context has taken on a distinct meaning, and is a broader, more flexible

standard of actionable misconduct than the traditional tort of common law fraud. In

particular, the Greggs note that the CPL describes a wide range of “unfair” and “deceptive”

conduct, but references “fraudulent” acts only in the catch-all provision. The Greggs

believe that this reflects legislative intent to prohibit a wider range of conduct than what

the common law encompassed.

       According to the Greggs, federal courts have held that misrepresentation that has

the tendency or capacity to mislead consumers is a deceptive act. To consider whether

the representation is deceptive, courts will consider the impression created by the

representation. The Greggs see no requirement of intent under the catch-all provision.

Finally, the Greggs observe that this Court has recently endorsed a broad interpretation

of the catch-all provision, holding that “deceptive conduct” includes an act or practice that

“has the capacity or tendency to deceive,” without regard to the actor’s intent to deceive

or actual deception. Commonwealth by Shapiro v. Golden Gate National Senior Care

LLC, 194 A.3d 1010, 1023 (Pa. 2018).

       The Pennsylvania Association of Justice (“PAJ”), arguing as amicus curiae in

support of the Greggs, maintains that the assertions of Ameriprise’s amici curiae are not

consistent with legislative requirements for private causes of action under the CPL.

Specifically, PAJ notes that liability under the catch-all provision also requires that the

conduct created a likelihood of confusion or misunderstanding. A subjective assertion

will not suffice.   Also filing an amicus curiae brief in support of the Greggs, the

Commonwealth of Pennsylvania argues that, as previously determined by the Superior

                                        [J-31-2020] - 9
and Commonwealth Courts, the 1996 amendment establishes a strict liability standard

for fraudulent and deceptive conduct.3

       The National Consumer Law Center, National Association of Consumer

Advocates, Community Legal Services, and others have also filed an amicus curiae brief

in support of the Greggs. These amici note that, of the twenty enumerated provisions of

the CPL that precede the catch-all provision, some include an intent requirement, while

some do not. That the legislature premised liability in the catch-all provision on “any

other” such conduct indicates that the legislature did not intend to require intent.

Moreover, these amici argue, the history of the CPL indicates that it was intended to add

additional consumer protections beyond what the common law provided. Consumer

protections are understood as strict liability provisions under federal law, as well as under

the laws of many states. These states, as well as the federal government, understand

that where a transaction is deceptive, a business has no right to keep the consumer’s

money.

       Prior to the adoption of the CPL, individual consumers who had been victimized in

the marketplace by unscrupulous vendors could vindicate their rights only under the

common law theories of negligent and fraudulent misrepresentation. Fraudulent (or

intentional) misrepresentation requires the plaintiff to prove six elements: (1) a

representation; (2) that is material to the transaction at issue; (3) made falsely, with

knowledge of its falsity or reckless disregard as to whether it is true or false; (4) with the

intent to mislead another person into relying on it; (5) justifiable reliance; and (6) an injury

proximately caused by the reliance. Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999). The

four elements of a common law claim for negligent misrepresentation are: (1) a

3     See Brief for the Cmmw. of Pa. as Amicus Curiae Supporting Appellees (citing
Bennett v AT Masterpiece, 40 A.3d 145 (Pa. Super. 2012); and Commonwealth v.
Percudani, 825 A.2d 743 (Pa. Cmwlth. 2003)).

                                       [J-31-2020] - 10
misrepresentation of a material fact; (2) made under circumstances in which the actor

should have known of its falsity; (3) with an intent to induce another to act on it; (4) thereby

causing injury to a party who justifiably relied upon the misrepresentation. Id. at 561. In

contrast with intentional misrepresentation, a negligent “misrepresentation must concern

a material fact and the speaker need not know his or her words are untrue, but must have

failed to make a reasonable investigation of the truth of these words.” Id.

       Against this common law backdrop, and drawing upon the model of consumer

protection statutes drafted by the Uniform State Law Commissions and the Federal Trade

Commission, Pennsylvania’s General Assembly passed the CPL in 1968.4 The intent of

the General Assembly was “to benefit the public at large by eradicating, among other

things, ‘unfair or deceptive’ business practices.” Monumental, 329 A.2d at 815. To this

end, the CPL recognized “the unequal bargaining power of opposing forces in the

marketplace” and “attempt[ed] to place on more equal terms seller and consumer.” Id. at

816. This Court has stated emphatically that, as a remedial statute, the CPL “is to be

construed liberally to effect its object of preventing unfair or deceptive practices.” Id. at

817.

       Section 201-9.2 creates a causation element, which requires a private plaintiff to

demonstrate justifiable reliance. See Schwartz v. Rockey, 932 A.2d 885, 897 n.16 (Pa.

2007) (noting that “the justifiable reliance criterion derives from the causation

requirement” of Section 201-9.2). Regardless of which unfair method of competition a

plaintiff challenges in a private cause of action, therefore, Section 201-9.2 requires the

plaintiff to establish justifiable reliance. Creating both public and private causes of action,

4       See Stephen Buckingham, Distinguishing Deception and Fraud: Expanding the
Scope of Statutory Remedies Available in Pennsylvania for Violations of State Consumer
Protection Law, 78 TEMP. L. REV. 1025, 1028 (2005); Charlotte E. Thomas, The
Quicksand of Private Actions Under the Pennsylvania Unfair Trade Practices Act: Strict
Liability, Treble Damages, and Six Years to Sue, 102 DICK. L. REV. 1, 2 (1997).

                                       [J-31-2020] - 11
the legislature established a statutory claim for anyone who demonstrates that: (1) they

purchased or leased “goods or services primarily for a personal, family, or household

purpose”; (2) they suffered an “ascertainable loss of money or property”; (3) the loss

occurred “as a result of the use or employment by a vendor of a method, act, or practice

declared unlawful by” the CPL; and (4) the consumer justifiably relied upon the unfair or

deceptive business practice when making the purchasing decision. 73 P.S. § 201-9.2(a);

Id., § 201-8; see also Schwartz, 932 A.2d 897 n.16.

       While Section 201-2(4) enumerates twenty distinct unfair methods of competition

and unfair or deceptive acts and practices that are unlawful, the legislature also included

the catch-all provision in Section 201-2(4)(xxi). Prior to its amendment in 1996, the catch-

all provision made it unlawful to engage in “any other fraudulent conduct which creates a

likelihood of confusion or of misunderstanding.” Id § 201-2(4)(xvii) (1968) (amended

1996). Pennsylvania courts interpreted this provision as requiring proof of common law

fraud. See, e.g., Hammer v. Nikol, 659 A.2d 617, 619 (Pa. Cmwlth. 1995) (“To be

actionable under the catchall provision, however, the ‘confusion or misunderstanding’

created must be fraudulent.”); Prime Meats, Inc. v. Yochim, 619 A.2d 769, 773 (Pa. Super.

1993) (requiring the plaintiff to prove elements of common law fraud to recover under the

CPL’s catch-all provision because that section forbade only fraudulent conduct).

Common law fraud was dependent upon proof of the actor’s state of mind, requiring proof

that the actor acted intentionally. Bortz, 729 A.2d at 561.

       Apparently dissatisfied with this restrictive interpretation, in 1996, the General

Assembly expanded the unlawful conduct barred by the catch-all provision so as also to

prohibit deceptive conduct. The resulting iteration bars “engaging in any other fraudulent

or deceptive conduct which creates a likelihood of confusion or of misunderstanding.” 73

P.S. § 201-2(4)(xxi) (1996). While the pre-amendment language had been interpreted as

                                     [J-31-2020] - 12
barring only common law fraud, the amended language expanded liability by barring any

deceptive conduct that creates a likelihood of confusion or of misunderstanding. It is this

amended language that the Court is called upon to interpret today.

       With this background in mind, we confront the plain language of the catch-all

provision to determine whether, as the Superior Court held, a strict liability standard

applies to the Greggs’ CPL claim. When this Court interprets legislative enactments, we

are mindful that “[t]he object of all interpretation and construction of statutes is to ascertain

and effectuate the intention of the General Assembly.” 1 Pa.C.S. § 1921(a). “The best

indication of legislative intent is the plain language of the statute.”               Kistler v.

Commonwealth, State Ethics Comm’n, 22 A.3d 223, 227 (Pa. 2011). “When the words

of a statute are clear and free from all ambiguity, they are presumed to be the best

indication of legislative intent.”     Chanceford Aviation v. Chanceford Twp. Bd. of

Supervisors, 923 A.2d 1099, 1104 (Pa. 2007) (quotations omitted). “Words and phrases

shall be construed according to rules of grammar and according to their common and

approved usage; but technical words and phrases and such others as have acquired a

peculiar and appropriate meaning or are defined in this part, shall be construed according

to such peculiar and appropriate meaning or definition.” 1 Pa.C.S. § 1903(a). As the CPL

is a remedial statute, we must construe it liberally. Monumental, 329 A.2d at 815-16.

       The addition of “deceptive” to describe the type of conduct barred by the catch-all

provision of the CPL expanded that provision beyond fraudulent conduct. In particular, in

the context of consumer protection, “deceptive conduct” had acquired a peculiar and

appropriate meaning prior to the 1996 amendment. As we have explained, the CPL is

based upon the Federal Trade Commission Act (“FTCA”) and the Lanham Act. Id. at 818

(observing that parts of the CPL are identical to the FTCA and that the “Lanham Act’s

similarity to the [CPL] is likewise strong”). Under the FTCA, deception is a broader

                                       [J-31-2020] - 13
concept of misconduct than common law fraud, and requires no proof of the actor’s state

of mind. See, e.g., Montgomery Ward & Co. v. FTC, 379 F.2d 666, 670 (7th Cir. 1967)

(rejecting the argument that deceptive advertising required proof of intent: “whatever

Wards’ intentions were in the advertising, they are not controlling in the determination of

its deceptiveness”). Rather than being premised upon intent, misrepresentation that has

the tendency or capacity to deceive is a deceptive act under federal law. Id. (“Actual

deception, proved by deceived consumers, is not necessary: the likelihood of deception

or the capacity to deceive is the criterion by which the advertising is judged.”); see also

Removatron Int’l Corp. v. FTC, 884 F.2d 1489, 1496 (1st Cir. 1989) (explaining that a

deceptive representation depends upon the impression created by the representation,

rather than its truth or falsity).

       In FTC v. Algoma Lumber Co., 291 U.S. 67 (1934), the Supreme Court of the

United States defined deceptive conduct in the context of consumer protection as conduct

that has the “capacity to deceive.” Id. at 81. Our General Assembly assumedly was

aware of the High Court’s longstanding expansive definition when it chose the same

language in 1996. As prescribed in the 1996 amendment to the CPL, therefore, deceptive

conduct as it pertains to consumer protection plainly has the same meaning that the

Supreme Court embraced in Algoma Lumber. It is the capacity to deceive rather than the

actor’s state of mind that renders conduct actionable under the amended catch-all

provision of the CPL.

       Indeed, this Court recently applied this well-established definition of deceptive

conduct to the CPL’s catch-all provision without regard to the actor’s state of mind. In

Golden Gate, the Court recognized the remedial purposes of the CPL and held that “[a]n

act or a practice is deceptive or unfair if it has the capacity or tendency to deceive, and

neither the intention to deceive nor actual deception must be proved; rather, it need only

                                     [J-31-2020] - 14
be shown that the acts and practices are capable of being interpreted in a misleading

way.” 194 A.3d at 1023 (cleaned up).

       Golden Gate answers the question before us today. And its plain language

interpretation is consistent with cases from the intermediate appellate courts in the years

since the 1996 amendment. The Superior Court initially continued to interpret Section

201-2(4)(xxi) to require proof of common law fraud without regard to the effect of the 1996

amendment. See, e.g., Ross v. Foremost Ins. Co., 998 A.2d 648, 654 (Pa. Super. 2010)

(holding that the catch-all provision required proof of common law fraud); Skurnowicz v.

Lucci, 798 A.2d 788 (Pa. Super. 2002); Booze v. Allstate Ins. Co., 750 A.2d 877 (Pa.

Super. 2000); Fay v. Erie Ins. Group, 723 A.2d 712 (Pa. Super. 1999); Sewak v. Lockhart,

699 A.2d 755 (Pa. Super. 1997); DiLucido v. Terminix Int'l, Inc., 676 A.2d 1237 (Pa.

Super. 1996). The Superior Court in these cases did not discuss the 1996 amendment,

but continued to apply its pre-existing precedent without regard for the statutory change.

       At the same time, several decisions from the federal courts in the Eastern District

of Pennsylvania rejected the Superior Court’s disregard for the statutory change. See

Flores v. Shapiro & Kreisman, 246 F.Supp.2d 427 (E.D. Pa. 2002) (noting that

maintaining the pre-1996 pleading requirements would render the words “or deceptive

conduct” redundant and superfluous); Patterson v. Chrysler Fin. Co., 263 B.R. 82, 92 n.

17 (Bankr. E.D. Pa. 2001) (discussing how another court’s failure to analyze the impact

of the 1996 amendment to the CPL on the requirement that a plaintiff show all of the

elements of common law fraud to prevail in a CPL action); Rodriguez v. Mellon Bank,

N.A., 218 B.R. 764, 784 (Bankr. E.D. Pa.1998) (noting that the addition of “or deceptive

conduct” signals an approval of a less restrictive interpretation of the CPL).

       The Commonwealth Court addressed the 1996 amendment in Commonwealth v.

Percudani, 825 A.2d 743 (Pa. Cmwlth. 2003), and diverged from the Superior Court.

                                     [J-31-2020] - 15
Based upon the language of the 1996 amendment, this Court’s instruction to construe the

CPL liberally, and the Superior Court’s failure to provide any rational basis for its

continuing restrictive view of the catch-all provision, the Commonwealth Court adopted

the position of the Bankruptcy Court. Id. at 747.

      The Superior Court eventually became aware that its precedent did not account

for the amended language. In Bennet v. A.T. Masterpiece, 40 A.3d 145, 154 (Pa. Super.

2012), the Superior Court aligned itself with the Commonwealth Court in recognizing that

“the legislature's inclusion of ‘deceptive’ in 1996 signaled that either fraudulent or

deceptive conduct would constitute a catchall violation.” Id. at 154.

      In TAP, the Commonwealth Court found no inconsistency between a jury’s defense

verdict on claims of negligent or fraudulent misrepresentation and a trial court’s decision

that the defendant violated the catch-all provision of the CPL.         36 A.3d at 1253.

Interpreting the catch-all provision, the Commonwealth Court held that the test for

deceptive conduct is “whether the conduct has the tendency or capacity to deceive.” Id.

We agree. This test is, as the Commonwealth Court has recognized, a lesser, more

relaxed standard than that for fraudulent or negligent misrepresentation. See id. As the

Commonwealth Court concluded, all that the statute requires the plaintiff to prove is that

“the acts or practices are capable of being interpreted in a misleading way.” Id.

      Courts in states that employ language similar to that of our CPL have also held

that proof of intent is not necessary in order to establish deceptive conduct. See, e.g.,

State of Alaska v. O’Neill Investigations, Inc., 609 P.2d 520, 535 (Alaska 1980); Regency

Nissan, Inc. v. Taylor, 391 S.E.2d 467, 470 (Ga. Ct. App. 1990); State ex rel. Kidwell v.

Master Distribs, Inc., 615 P.2d 116, 122 (Idaho 1980); Kowalski v. Cedars of Portsmouth

Condo. Ass’n, 769 A.2d 344, 349 (N.H. 2001); see also Buckingham, supra note 2, at

1034 n.103.

                                     [J-31-2020] - 16
       It is noteworthy as well that Black’s Law Dictionary defines “deceptive act” as

follows: “As defined by the Federal Trade Commission and most state statutes, conduct

that is likely to deceive a consumer acting reasonably under similar circumstances. —

Also termed deceptive practice; deceptive sales practice.” Deceptive Act, Black’s Law

Dictionary (11th ed. 2019).

       Mindful of our task liberally to construe the CPL in accord with the General

Assembly’s intent to eradicate unfairness and deception in consumer transactions,

Monumental, 329 A.2d at 817, we are bound to conclude again that the plain language of

the amended provision eliminates the state of mind element that was required prior to the

amendment. The plain language of the current statute imposes liability on commercial

vendors who engage in conduct that has the potential to deceive and which creates a

likelihood of confusion or misunderstanding. That is all that is required. The legislature

required neither carelessness nor intent when a cause of action is premised upon

deceptive conduct.

       Had the General Assembly intended to limit the catch-all provision to cover only

common law misrepresentation claims, it would have done so directly by, for example,

barring only fraudulent or negligent conduct. By choosing instead to bar “deceptive

conduct,” the General Assembly signaled its intent to dispense with consideration of the

actor’s mental state.

       Accordingly, under the plain meaning of the statute, deceptive conduct during a

consumer transaction that creates a likelihood of confusion or misunderstanding and

upon which the consumer relies to his or her financial detriment does not depend upon

the actor’s state of mind.    Liberally construing the CPL as we must, the amended

language places the duty of compliance with the CPL on commercial vendors, without

regard to their intent. Without a state of mind requirement, the amended catch-all

                                    [J-31-2020] - 17
provision fairly may be characterized as a strict liability offense. As the Superior Court in

this case held:

       [A]ny deceptive conduct, “which creates a likelihood of confusion or of
       misunderstanding,” is actionable under 73 P.S. § 201-2(4)(xxi), whether
       committed intentionally (as in a fraudulent misrepresentation), carelessly
       (as in a negligent misrepresentation), or with the utmost care (as in strict
       liability). Whether a vendor's “conduct has the tendency or capacity to
       deceive . . . is a lesser, more relaxed standard than that for fraud or
       negligent misrepresentation.” TAP, 36 A.3d at 1253. The only thing more
       relaxed than negligence––regarding a consumer's burden of proof––is strict
       liability.
Gregg, 195 A.3d at 939.

       Like other strict liability offenses, liability for deceptive conduct under the CPL

cannot be excused if consumers rely upon that conduct to their financial detriment.

Representations made in the consumer context are within the exclusive control of the

vendor:

       [A commercial transaction] occurs in a designed setting entirely of the
       vendor’s own creation via preplanned marketing schemes. Thus, vendors
       place themselves, by choosing where, when, and how they enter the
       market, in a much stronger position to comply fully with the [CPL] before
       soliciting or interacting with consumers. Vendors not only elect whether to
       enter a market, but, because “the market” is a fictional place, they have full
       volitional control over their conduct when in it.

       The [CPL] is for consumer protection. It undoes the ills of sharp business
       dealings by vendors, who, as here, may be counseling consumers in very
       private, highly technical concerns. Like the Greggs, those consumers may
       be especially reliant upon a vendor’s specialized skill, training, and
       experience in matters with which consumers have little or no expertise.
       Therefore, the legislature has placed the duty of [CPL] compliance squarely
       and solely on vendors; they are not to engage in deceitful conduct and have
       no legally cognizable excuse, if they do.
Id. at 939-40. It is the vendor—not the consumer—that is charged with complying with

the CPL, as the vendor is in a better position to determine whether the representation

might be deceptive. Strict liability for such violations is consistent with the legislative

                                      [J-31-2020] - 18
mandate to eradicate the use of unfair and deceptive conduct in consumer transactions.

Monumental, at 815-16.

       The General Assembly knows well how to add a state of mind requirement to a

statute. Within the CPL itself, numerous provisions require intent or knowledge before a

violation will be found. See, e.g., 73 P.S. § 201-2(4)(ix) (requiring proof of intent not to

sell goods and services as advertised); id. § 201-2(4)(x) (requiring proof of intent not to

supply public demand); id. § 201-2(4)(xv) (requiring proof that the vendor made knowing

misrepresentations). The absence of any reference to the actor’s state of mind in the

catch-all provision demonstrates that the legislature did not intend to require proof of the

actor’s state of mind. “[W]here a section of a statute contains a given provision, the

omission of such a provision from a similar section is significant to show a different

legislative intent.” Fletcher v. Pa. Prop. & Cas. Ins. Guar. Ass’n, 985 A.2d 678, 684 (Pa.

2009). It is not for the courts to add a state of mind requirement to the statute where the

legislature did not choose to do so. See Commonwealth v. Rieck Inv. Corp., 213 A.2d

277, 282 (Pa. 1965) (courts should not add to a statute a requirement that the legislature

chose not to include).

       Strict liability is not a foreign concept in consumer protection. For example, the

Fair Debt Collection Practices Act is generally characterized as “a strict liability statute to

the extent it imposes liability without proof of an intentional violation.” Allen ex rel. Martin

v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d. Cir. 2011); see also In re Porter, 961 F.2d

1066, 1078 (3d Cir. 1992) (recognizing that the Truth in Lending Act “achieves its remedial

goals by a system of strict liability in favor of the consumers when mandated disclosures

have not been made.” (quotations omitted)). The Superior Court’s characterization of the

catch-all provision as creating strict liability makes perfect sense in this context. Under

the catch-all provision of the CPL, the actor’s state of mind as to either the truth or falsity

                                       [J-31-2020] - 19
of the representation or the effect that the misrepresentation will have on the consumer

is irrelevant.

       We reject Ameriprise’s argument that the catch-all provision means something

different depending upon whether it is brought in a public enforcement action or a private

action. Toy does not support Ameriprise’s argument. There, a private purchaser of

insurance brought a CPL claim against an insurer under the catch-all provision as it stood

prior to its 1996 amendment. Interpreting the pre-1996 version of the catch-all provision,

the Court required the plaintiff to demonstrate the common law requirements of justifiable

reliance and causation of harm. In doing so, the Court suggested that these requirements

derived solely from the common law. As the Court subsequently clarified, however, these

elements were statutory, deriving from the CPL itself. Schwartz, 932 A.2d at 897, n.16.

There is no basis upon which we can glean different requirements from the statute

depending upon whether the action is public or private, and Toy does not support such

an interpretation.

       While the learned Dissent recognizes that neither an intention to deceive nor actual

deception must be proven, see Golden Gate, 194 A.3d at 1023, it nevertheless discerns

an open question concerning the state of mind that must be established under Section

201-2(4)(xxi).   Dissenting Op. at 7.      The Dissent attempts to establish that a

demonstration of deceptive conduct under the catch-all provision does not depend upon

the vendor’s knowledge of the truth or falsity of the statement, but instead upon the

“vendor’s state of mind with respect to the misleading or confusing effect his statements

or actions are likely to have on a consumer.” Id. at 8. For the Dissent, this means that a

vendor can act without regard to the truthfulness of the statement, but can be liable only

if the vendor is or should be aware that the statement is capable of misleading the

consumer. The Dissent considers this to be a negligence standard. Id. at 9.

                                     [J-31-2020] - 20
       Although the Dissent perceives the absence of an explicit strict liability designation

to signal an intent requirement, it is the absence of an intent requirement that imposes a

strict liability standard. As explained above, if the General Assembly intended to add a

state of mind requirement, it would have done so. The Dissent’s vexation with the “strict

liability” label notwithstanding, such a label is an apt description of the state of mind, or

lack thereof, encompassed within “deceptive conduct.” A statute that requires no proof

of the actor’s state of mind imposes liability without regard to state of mind. Under the

catch-all provision of the CPL, the actor’s state of mind as to either the truth or falsity of

the representation or the effect that the misrepresentation will have on the consumer is

irrelevant.

       The Dissent also finds it “incongruous” that the legislature would prohibit fraudulent

conduct, which requires an intentional state of mind, and then lower the bar to include

deceptive acts without regard to the actor’s state of mind. Dissenting Op. at 5. We

perceive nothing incongruous in the establishment of multiple ways to demonstrate a

violation of the catch-all provision, or in a lowering of the bar in order to capture conduct

based upon strict liability. Where the statute is silent as to the requisite state of mind, the

statute requires neither intent to deceive nor negligence with regard to the effect of the

misrepresentation.5 Further, even if the legislature’s policy choice were to strike us as

5      The Dissent faults our plain language analysis of the catch-all provision as failing
to give effect to the meaning of fraud, rendering that term surplusage. Dissenting. Op. at
9. But fraud and deceptive conduct are distinct concepts, with their own requirements of
proof. And they are alternative ways to establish a violation of the catch-all provision.
When the General Assembly chose the amendatory language, it borrowed a term that
was well-established in the field of consumer protection, a term that is not dependent in
any respect upon intent. See Commonwealth v. Percudani, 825 A.2d 743, 747 (Pa.
Cmwlth. 2003) (holding that maintaining the pre-1996 pleading requirements would
render the words “or deceptive conduct” redundant and superfluous, contrary to the rules
of statutory construction).

                                      [J-31-2020] - 21
“incongruous,” that would be no concern of ours. Finding the language to be plain, our

task is complete.

       In ruling in the Greggs’ favor, the trial court found that Ameriprise’s representations

to the Greggs “created a likelihood of confusion or misunderstanding” because Kovalchik

“failed to clearly and fully explain the cost and terms of the [life insurance] policy.” Tr. Ct.

Op., 12/5/2017, at 4. As a result, the Greggs “reasonably believed” that they would not

pay any additional money for the new life insurance policy. Id. The trial court’s finding of

liability under the catch-all provision did not depend upon Ameriprise’s state of mind.

Because the Superior Court was correct in its characterization of the catch-all provision

as a strict liability provision, we affirm.

       Justices Donohue, Dougherty and Mundy join the opinion.

       Justice Todd files a dissenting opinion in which Chief Justice Saylor and

Justice Baer join.

       The Dissent’s intent requirement would read into the statute words that are not
there. Rieck Inv. Corp., 213 A.2d at 282; Danganan v. Guardian Protection Services, 179
A.3d 9, 17 (Pa. 2018) (“the Court may not supply additional terms to, or alter, the language
that the Legislature has chosen”). There is simply no indication in the plain language of
the catch-all provision that deceptive conduct depends upon intent.

                                         [J-31-2020] - 22