Court Opinion

ID: 9655271
Source: CourtListenerOpinion
Date Created: 2023-08-23 19:04:41.884408+00
Date Added: 2024-06-11T18:13:17.256080
License: Public Domain

WRIGHT, Judge
(dissenting).
Because application of the common law doctrine of justifiable reliance to Consumer Fraud Act cases eviscerates the legislature’s intent to provide broader consumer protection than that found in common law fraud cases, I respectfully dissent. The Consumer Fraud Act, Minn.Stat. § 325F.69 (2002), clearly reflects the legislature’s intent to “make it easier to sue for consumer iraud than it had been to sue for fraud at common law.” State by Humphrey v. Alpine Air Prods., Inc., 500 N.W.2d 788, 790 (Minn.1993). This intent is evinced by “the elimination of elements of common law fraud, such as proof of damages or reliance on misrepresentations.” Id. (emphasis in original). To fulfill this purpose, reliance has been eliminated as an element of the Consumer Fraud Act. Minn.Stat. § 825F.69 (creating cause of action for a false promise or misleading statement made in connection with a sale with the intent that others will rely on it, regardless of whether “any person has in fact been misled, deceived, or damaged” by the fraud); Alpine Air Prods., Inc., 500 N.W.2d at 790.
Allegations of misrepresentations made with the intent to induce the customer to rely on the misrepresentations are sufficient to plead a claim under the Consumer Fraud Act. See LeSage v. Norwest Bank Calhoun-Isles, N.A., 409 N.W.2d 536, 541 (Mnn.App.1987) (holding that, in suit for damages, genuine issues of material fact under the Consumer Fraud Act were presented in allegations that defendant made misrepresentations of fact known to him with an intent that the plaintiffs rely on the statements and invest their money). While reliance is an element of common law fraud, Flynn v. Am. Home Prods. Gorp., 627 N.W.2d 342, 349 (Minn.App.2001), allegations of reliance are not necessary to state a claim under the Consumer Fraud Act for damages resulting from a violation brought pursuant to Minn.Stat. § 8.31, subd. 3a (2002), the private attorney general statute. Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2, 12 (Minn.2001). Here, Wiegand need only allege (1) an intentional misrepresentation relating to the sale of merchandise and (2) damages caused by the misrepresentation. Id. A review of the complaint establishes that Wiegand has set forth a legally sufficient claim for relief.
The district court, however, dismissed this case for failure to state a claim, based on our ruling in Scott v. Forest Lake Chrysler-Plymouth-Dodge, 598 N.W.2d 713 (Minn.App.1999), rev’d on other grounds 611 N.W.2d 346 (Minn.2000), which imports common law reliance, the precise element that the legislature has intentionally eliminated, into Consumer *456Fraud Act cases. Group Health makes clear that reliance is a component of causation that must be proved in Consumer Fraud Act suits brought under Minn.Stat. § 8.31, subd. 3a. 621 N.W.2d at 12. But nothing in the Group Health decision can be read to require Wiegand to meet the heightened common law standard of justifiable reliance to prove causation, particularly in light of the Consumer Fraud Act’s abrogation of the common law to make it easier for consumers to sue for fraud than proceeding at common law. Id. (“Imposing a requirement to plead common law reliance in a statutory claim intended to alleviate the burdens of a common law fraud action would be contrary to the legislature’s intent.”) If, as the majority opinion concludes, the common law standard of justifiable reliance applies, the result ignores the legislature’s intent, removes the broader consumer protection against fraud available under the Consumer Fraud Act, and renders the Act indistinguishable from common law fraud.
“The legislature may, by statute, expand the necessary connection between conduct and injury necessary to permit suit.” State by Humphrey v. Philip Morris, Inc., 551 N.W.2d 490, 495 (Minn.1996). The legislature did not exclude suits for damages under Minn.Stat. § 8.31, subd. 3a, from its intent to provide broader consumer protection. Rather, section 8.31, subdivision 3a, expressly includes the Consumer Fraud Act among those statutes where private suits are authorized to encourage aggressive prosecution of statutory violations. Philip Morris, 551 N.W.2d at 495. Indeed, the Group Health court rejected the imposition of a reliance standard in Consumer Fraud Act cases that would effectively “reinstate the strict common law reliance standard that ... the legislature meant to lower for these statutory actions.” 621 N.W.2d at 15.
To prove the “causal nexus” enunciated in Group Health, Wiegand need only prove what he has pled — that the alleged oral misrepresentations caused him to suffer damages. See id. at 13-14. Whether the causal nexus exists is a disputed question of fact that, at this early stage in the proceedings, is not ripe for resolution. Accordingly, I would reverse the district court’s dismissal of the case for failure to state a claim and remand for further proceedings.