WPI 310.08 Definition—Unfair or Deceptive Act or Practice

Use this instruction in combination with WPI 310.01 (Elements of a Violation of the Consumer Protection Act) when the “unfair or deceptive” requirement is not met by a statutory violation.

The instruction defines deceptive acts or practices. For guidance in drafting an instruction that defines unfair acts or practices, see the Comment below.

The term “unfair or deceptive” is not defined in the Consumer Protection Act. RCW 19.86.020. Whether an alleged act constitutes an unfair or deceptive act or practice covered by the CPA is generally a question of law that appellate courts review under the de novo standard. Columbia Physical Therapy, Inc. v. Benton Franklin Orthopedic Assocs., P.L.L.C., 168 Wn.2d 421, 442, 228 P.3d 1260 (2010); Svendsen v. Stock, 143 Wn.2d 546, 553, 23 P.3d 455 (2001). It is a question of fact whether the defendant committed a specific action or practice. Leingang v. Pierce Cty. Med. Bureau, 131 Wn.2d 133, 149–50, 930 P.2d 288 (1997).

Deceptive acts or practices. Whether an act has the capacity to deceive a substantial portion of the public is a question of fact. Behnke v. Ahrens, 172 Wn.App. 281, 294 P.3d 729 (2012). When the underlying facts are undisputed, the question whether the acts are likely to mislead - an objective inquiry - is a question of law. State v. Mandatory Poster Agency, Inc., 199 Wn.App. 506, 512, 398 P.3d 1271 (2017). However, whether such a deception has the capacity to reach a substantial portion of the public is a question of fact precluding summary judgment, unless the undisputed facts establish that capacity. Mandatory Poster Agency, 199 Wn.App. at 512.

If the facts about a party's act or practice are not in dispute, the trial court may decide whether that act or practice was deceptive as a matter of law. Smale v. Cellco P'ship, 547 F. Supp.2d 1181, 1188 (W.D. Wash. 2008); Leingang, 131 Wn.2d at 149–50.

Characterizing an insurance subrogation claim as a liquidated obligation that must be immediately paid, when in fact the claim and alleged debt had not yet been adjudicated, is an act that has a tendency to deceive a substantial portion of the public. Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 47–56, 204 P.3d 885 (2009). Listing a piece of real property and showing the property to potential buyers without disclosing that the property was previously used as a place for manufacturing methamphetamine is an act that has a tendency to deceive a substantial portion of the public. Bloor v. Fritz, 143 Wn.App. 718, 735–37, 180 P.3d 805 (2006) (the court also held that leaving this information out of the seller's disclosure statement could not serve as the basis of a claim under the CPA); see also Svendsen, 143 Wn.2d at 553 (fraudulent concealment by real estate agent constituted a CPA violation).

The definition of “deceptive” involves an objective inquiry—would the practice be likely to mislead a reasonable or ordinary consumer. Behnke, 172 Wn.App. at 292–93 (citing Panag, 166 Wn.2d at 50).

No intentional deception need be proved, only a tendency or capacity to deceive. Sing v. John L. Scott, Inc., 134 Wn.2d 24, 30, 948 P.2d 816 (1997); Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 785, 719 P.2d 531 (1986). Similarly, a communication may contain accurate information and still be unfair or deceptive, if there is a representation, omission, or practice that is likely to mislead a reasonable consumer. In this way, a defendant's use of accurate information may fall within the CPA as being deceptive or unfair. Panag, 166 Wn.2d at 49–50; Columbia Physical Therapy, 168 Wn.2d at 442; see also Deegan v. Windermere Real Est./Center-Isle Inc., 197 Wn.App. 875, 890, 391 P.3d 532 (2017) (even accurate information may be deceptive if there is a representation, omission or practice that is likely to mislead).

Unfair acts or practices. Although most consumer cases under the CPA focus on “deceptive” acts or practices, RCW 19.86.020 also prohibits acts or practices that are “unfair.” The statute does not define “unfair,” and Washington law has not yet defined the term. The WPI Committee sets out the following discussion to assist practitioners in developing their own instructional language in consumer cases.

In Klem v. Washington Mutual Bank, 176 Wn.2d 771, 295 P.3d 1179 (2013), the Supreme Court held that “an act or practice can be unfair without being deceptive.” Klem, 176 Wn.2d at 787. The court held that the “or” between “unfair” and “deceptive” in RCW 19.86.020 is “disjunctive,” and consequently, that unfair acts or practices alone may satisfy the unfair or deceptive requirement. Klem, 176 Wn.2d at 787. The court did not define an “unfair” act or practice, however, noting:

Klem, 176 Wn.2d. at 786 (citations omitted).

The unfair practice in Klem that the court held sufficient to meet the “unfair” prong was a foreclosure trustee's practice of deferring to the lender on whether to postpone a foreclosure sale, and failing to exercise the independence required of an impartial trustee. Klem, 176 Wn.2d at 792.

The court in Klem offered some guidance on how unfair acts under the CPA might be analyzed. After observing that the CPA is modeled on the Federal Trade Commission (FTC) Act and was intended to complement federal consumer protection law, the court in Klem stated that Washington courts may be guided by federal laws in this area, citing RCW 19.86.920. The court suggested that FTC law may be persuasive as a starting point for defining “unfair” acts or practices under the CPA. Klem, 176 Wn.2d at 787–88. The court noted that under current FTC law a practice is “unfair” if it “causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and is not outweighed by countervailing benefits.” Klem, 176 Wn.2d at 787–88. (quoting 15 U.S.C.A. § 45(n)); see also Mellon v. Regional Trustee Servs. Corp., 182 Wn.App. 476, 487–491, 334 P.3d 1120 (2014).

The court in Klem also cited with approval Magney v. Lincoln Mutual Savings Bank, 34 Wn.App. 45, 57, 659 P.2d 537 (1983), which held that an act is unfair under the CPA if it offends public policy as established “by statutes [or] the common law,” or is “unethical, oppressive, or unscrupulous,” among other things. Klem, 176 Wn.2d at 786 (citing Magney); see also Mellon, 182 Wn.App. at 490.

The Mellon court also stated that “advancing a substantively or procedurally unconscionable contract term is likely an ‘unfair’ act or practice.” Mellon, 182 Wn.App. at 490 (citing State v. Kaiser, 161 Wn.App. at 705, 722, 254 P.3d 850 (2011), and State v. Ralph Williams' NW Chrysler Plymouth, Inc., 87 Wn.2d 298, 309, 553 P.2d 423 (1976)). Based on these definitions of “unfairness,” the court held that the loan servicer's alleged conduct, if proven, was “unfair” and would justify relief under the CPA. Mellon, 182 Wn.App. at 491; see also Blake v. Federal Way Cycle Ctr., 40 Wn.App. 302, 310–11, 698 P.2d 578 (1985) (citing FTC v. Sperry & Hutchison Co., 405 U.S. 233, 244 n.5, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972)) (discussing “unfairness” standard under CPA in light of FTC standards).

Statutory violations. When the defendant's act or practice is alleged to be “unfair or deceptive” because of a statutory violation, see WPI 310.03 (Per Se Violation of Consumer Protection Act).