Court Opinion

ID: 9537017
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:11:22.574702+00
Date Added: 2024-06-11T14:55:45.880430
License: Public Domain

HOWARD, Chief Judge,
dissenting.
As Oliver Hardy said to Stan Laurel, “This is a fine kettle of fish you’ve gotten us into.” This is what comes when the court implies a private right of action under a statute when the legislature never intend*345ed one to exist. As I expressed in my concurring opinion in Peery v. Hansen, 120 Ariz. 266, 585 P.2d 574 (App.1978) you can kiss common law fraud “goodbye” in this state. As a direct result of Sellinger v. Freeway Mobile Home Sales, Inc., 110 Ariz. 573, 521 P.2d 1119 (1974) and this case, in any action involving a sale of property, whether personal or real, in which fraud is alleged, the plaintiff need not show any reliance and need only prove his case by a preponderance of the evidence instead of the normal clear and convincing standard used in common law fraud cases. Do we really want to do this?
The fault lies with Sellinger, which put misplaced reliance on an Illinois case involving an Illinois statute, misconstrued the Illinois statute and the Illinois case, misconstrued A.R.S. § 44-1533, and failed to conduct the type of analysis in which the court should engage in deciding whether or not a private cause of action exists under a statute. The case of Transamerica Mortgage Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979) involved a derivative action on behalf of trust shareholders under the Investment Advisers Act of 1940 for breach of fiduciary duty and fraud. The Court stated:
“The question whether a statute creates a cause of action, either expressly or by implication, is basically a matter of statutory construction, [citations omitted.] While some opinions of the Court have placed considerable emphasis upon the desirability of implying private rights of action in order to provide remedies thought to effectuate the purposes of a given statute, ... what must ultimately be determined is whether Congress intended to create the private remedy asserted, as our recent decisions have made clear, [citations omitted.] We accept this as the appropriate inquiry to be made in resolving the issues presented by the case before us.” 444 U.S. at 15-16, 100 S.Ct. at 245.
The Court found that, since one section of the act provided that certain contracts “shall be void” but the act did not provide how they were to be voided, the section by its terms necessarily contemplates that the issue of voidness must be litigated somewhere and that obviously Congress must have meant that the common law legal incidence of voidness would follow, including the availability of a suit for rescission or for injunction against the continued operation of the contract and for restitution. It therefore concluded that private persons who entered into such contracts could maintain an action to void them. However, it held that the question of damages was quite different:
“... Yet is is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it. ‘When a statute limits a thing to be done in a particular mode, it includes the negative of any other mode.’ [citations omitted.] Congress expressly provided both judicial and administrative means for enforcing compliance with § 206. First, under § 217, 15 U.S.C. § 80b-17, willful violations of the Act are criminal offenses, punishable by fine or imprisonment, or both. Second, § 209 authorizes the Commission to bring civil actions in federal courts to enjoin compliance with the Act, including, of course, § 206. Third, the Commission is authorized by § 203 to impose various administrative sanctions on persons who violate the Act, including § 206. In view of these express provisions for enforcing the duties imposed by § 206, it is highly improbable that ‘Congress absentmindedly forgot to mention an intended private action.’ [citation omitted.]” 444 U.S. at 19-20, 100 S.Ct. at 246-247.
Our act states that the attorney general is to enforce its provisions. The rationale of Transamerica applies. It is improbable that the state legislature absentmindedly forgot to mention an intended private action. If it wanted to put one in, it could have done so in simple and express language. The dispositive question is whether the state legislature intended to create a private remedy. It did not.
*346It might be a good idea to read our own statute a little closer. A.R.S. § 44-1522(A) sets forth unlawful practices. Subsection B involves the intended interpretation of the provisions of subsection A. It states:
“It is the intent of the legislature that, in construing the provisions of subsection A of this section, that the courts may use as a guide interpretations given by the federal trade commission and the federal courts to §§ 45, 52 and 55(a)(1) Title 15, U.S.C.A. of the federal trade commission act....”
There is no private cause of action under the federal act. See Carlson v. Coca-Cola Company, 483 F.2d 279 (9th Cir.1973). A.R.S. § 44-1524 sets forth the elaborate powers of the attorney general under the consumer fraud act. There follow other sections dealing with confidentiality, the subpoena power, contempt powers, what can be done when there is assurance of a discontinuance of an unlawful practice and the establishment of a revolving consumer protection fraud fund. As was stated by the Court in Middlesex County Sewerage Authority v. National Sea Clammers, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981):
“In view of these elaborate enforcement provisions it cannot be assumed that Congress intended to authorize by implication additional judicial remedies for private citizens suing .... As we stated in Transamerica Mortgage Advisers, supra, ‘it is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.’ [citations omitted.] In the absence of strong indicia of a contrary congressional intent, we are compelled to conclude that Congress provided precisely the remedies it considered appropriate.” 453 U.S. at 14-15, 101 S.Ct. at 2623.
There is no strong indicia of contrary legislative intent here and we should be compelled to conclude that the legislature provided precisely what it considered appropriate, as was the Supreme Court of the United States.
Now to get to § 44-1533. It provides, inter alia, the following: “The provisions of this article shall not bar any claim against any person who has acquired any monies or property, real or personal, by means of any practice declared to be unlawful by this article.”
The court in Sellinger held that the inference from this provision was that there was a private cause of action under the act. In my opinion it says nothing of the kind. All it says is that if a person commits an act which would be fraudulent under the Consumer Fraud Act, he cannot, as a defense to a common law suit for fraud and deception, claim that the only one who can sue him is the attorney general. That is all that the statute says.
If the court insists in giving private individuals a right to bring a lawsuit under the act, it should limit these suits as was done by the Washington court in Lightfoot v. MacDonald, 86 Wash.2d 331, 544 P.2d 88 (1976). There the court held that private individuals could act as private attorneys general and bring a suit under the act but only in those cases where the act complained of affected a public interest. In those cases where there is merely a breach of a private contract affecting no one but the parties to the contract, there is no right to bring a private cause of action under the act. Thus, if we were to employ the Washington rationale, the appellees here would have had no right to bring a private action under the act since the matter was a private one and did not affect a public interest.
I believe that there was a jury question as to whether or not the appellant made an independent warranty concerning the trailer and that, the jury having resolved this, appellees should be entitled to the compensatory damages for breach of warranty. However, they are not entitled to punitive damages.