Skip to main content

Search

Unfair and Deceptive Acts and Practices: 2.5.8.4 Medical Devices

The Medical Device Act (MDA), an amendment to the Food, Drug, and Cosmetic Act, explicitly preempts certain state law “requirements” with respect to devices intended for human use.2644 State law requirements are preempted if they relate to the safety or effectiveness of the device or to some other matter included in a requirement applicable to the device under federal law and are different from or in addition to federal requirements.2645 The Supreme Court has held that the term “requirements

Unfair and Deceptive Acts and Practices: 2.5.8.5.1 Non-prescription medications

The Food, Drug, and Cosmetic Act (FDCA) includes an express preemption provision regarding non-prescription medications.2652 A court applied this provision to preempt a claim that a sunscreen manufacturer violated the UDAP statute by using terms such as “waterproof” that the FDA did not formally ban until later.2653 However, another court held that FDA regulations that set labeling requirements for sunscreen and prohibit certain misleading claims do not preempt a claim that a seller violated

Unfair and Deceptive Acts and Practices: 2.5.8.5.3 Cosmetics

The FDCA also includes an express preemption provision regarding labeling and packaging of cosmetics.2660 This provision did not preempt a UDAP claim alleging that a cosmetic’s brand name, “Active Naturals,” was deceptive when the product had synthetic ingredients, as this claim did not relate to the ingredient list mandated by the FDA.2661 On the other hand, the Second Circuit held that the Food and Drug Administration’s rules about volume and weight labels preempt

Unfair and Deceptive Acts and Practices: 2.5.9.1.3 UDAP claims based on violation of FDA requirements; the FDA’s exclusive enforcement authority and POM Wonderful

Courts have generally agreed that there is no express or implied preemption of a claim that violation of an FDA labeling requirement is a violation of a state UDAP statute or other law.2713 Such a claim does not seek to impose a requirement that is not identical to the federal requirements, and it would be hard to argue that enforcement of the FDA requirements through a state law claim creates a conflict with the federal requirements.

Unfair and Deceptive Acts and Practices: 2.5.9.1.4 Referral to FDA’s primary jurisdiction

Courts have also rejected manufacturers’ arguments that state law claims based on violation of FDA food labeling requirements should be referred to the FDA under the primary jurisdiction doctrine.2730 For example, deferral to the FDA was inappropriate where the issue was the deceptiveness of a label—an issue well within the competence of courts—and the FDA had already issued guidance on the use of the specific term involved.2731 However, where the FDA was actively considering the substantive

Unfair and Deceptive Acts and Practices: 2.5.10.1 General

The Employee Retirement Income Security Act of 1974 (ERISA) contains an express preemption provision which preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.”2753 This broad preemption provision has been held to preclude many UDAP and similar claims.2754

Unfair and Deceptive Acts and Practices: 8.8.3 Tobacco

The Massachusetts Supreme Judicial Court held that a UDAP violation would be established by proof that a manufacturer labeled its cigarettes “Lights” with “lowered tar and nicotine” while knowing that most smokers would not experience the advertised reduction.731 The District of Columbia Circuit upheld an injunction preventing a manufacturer from advertising its cigarettes as “light” on the same grounds.732 However, the Illinois Supreme Court held that consent orders obtained by the FTC, which s

Unfair and Deceptive Acts and Practices: 2.5.10.2 Does State Insurance Regulation Trump ERISA Preemption?

ERISA has a savings clause that provides that “nothing in this title shall be construed to exempt or relieve any person from any law of any state which regulates insurance.”2762 According to revised criteria announced by the Supreme Court in 2003, a law “regulates insurance” for purposes of ERISA if it (1) is specifically directed toward entities engaged in insurance, and (2) substantially affects the risk-pooling arrangement between the insurer and the insured.2763 The Supreme Court has bro

Unfair and Deceptive Acts and Practices: 2.5.12 Bankruptcy Code

Unless a UDAP claim creates an actual conflict with a specific provision of the Bankruptcy Code, the federal law should not preempt the UDAP claim. Courts applying the appropriate “direct conflict” standard have rejected preemption arguments when UDAP claims were based on violations of the automatic stay, the discharge order, or other acts that harmed consumers’ rights in bankruptcy.2786

Unfair and Deceptive Acts and Practices: 2.1.1 Determining a UDAP Statute’s Scope

A preliminary issue that must be considered in each UDAP case is whether the challenged practice is within the statute’s scope. While a UDAP statute’s greatest utility is its general applicability, in a surprising number of cases the statute may not apply. UDAP scope varies from state to state, but in some states the UDAP statute will not apply to credit, debt collection, landlord-tenant matters, realty, securities or business opportunities. Some statutes also exempt from coverage insurance companies, utilities, banks, or other regulated industries.

Unfair and Deceptive Acts and Practices: 2.1.3 Liberal Construction of UDAP Scope Sections

The rule that UDAP statutes are remedial and must be liberally construed39 applies to the scope sections of the statute just as much as to its substantive provisions.40 Definitions in the UDAP statute are to be construed in light of the statute’s remedial purpose to protect the public.41 Thus, even though the consumer has the burden of proving that the UDAP statute applies, the court should adopt a liberal interpretation of the statute’s scope and should

Unfair and Deceptive Acts and Practices: 2.1.9 Treatment of Litigation Activities

Some courts have held that acts in judicial proceedings do not involve trade or commerce.287 For example, one case, open to criticism, has held that once a lawsuit has been filed against a seller, the matter is subject to the control of the courts, and no longer in “trade or commerce.”288 But a later decision from the same court cuts back significantly on this decision, holding that a collection agency’s violations of the Collection Agency Act after filing suit are actionable under the UDAP stat

Unfair and Deceptive Acts and Practices: 2.1.6 Interpretations of “Merchandise”

Several states, including Arizona, Delaware, Illinois, Missouri, New Jersey, North Dakota, South Dakota, and Wyoming, use the term “merchandise” in the scope sections of their UDAP statutes. Minnesota also uses the term in one of its UDAP statutes.104 Each of these statutes defines “merchandise” as including various types of property such as goods, services, realty, commodities, and intangibles.

Unfair and Deceptive Acts and Practices: 2.1.7 Interpretations of “Services”

The definition of the term “service” is very important in determining the scope of a UDAP statute. Many transactions can be brought within a UDAP statute’s scope if “services” is defined broadly. One definition of service is as “action or use that furthers some end or purpose: conduct or performance that assists or benefits someone or something; deeds useful or instrumental toward some object.”128