When it comes to construction disputes, a Florida Deceptive and Unfair Trade Practices Act (known by its acronym “ FDUTPA ”) claim is not commonly asserted. A FDUTPA claim is a statutory claim under Florida Statute s. 501.201 en seq. This claim is NOT easy to prove, particularly in the construction context. Sometimes, a party will assert a FDUTPA claim to create a basis for attorney’s fees; however, that basis cuts BOTH ways, i.e., you can be liable for fees if you fail to prove the FDUTPA claim. In a construction dispute, a FDUTPA claim is one that really should be pled with caution after a party understands and fully considers what it MUST prove including the all-important consideration of how actual damages are determined under FDUTPA, which requires an actual loss. Nevertheless, it is good to know what you need to prove to support a FDUTPA claim in case you believe you have facts that can support a FDUTPA claim and actual damages under FDUTPA (known as benefit-of-the-bargain damages).
A recent non-construction case out of the Eleventh Circuit Court of Appeals, Marrache v. Bacardi, U.S.A., Inc., 2021 WL 5175762 (11 th Cir. 2021), demonstrates what a party needs to allege and prove to support a FDUTPA claim:
The three elements of a consumer claim under FDUTPA are: “(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” Carriuolo v. Gen. Motors Co., 823 F.3d 977, 985–86 (11th Cir. 2016); accord City First Mortg. Corp. v. Barton, 988 So. 2d 82, 86 (Fla. Dist. Ct. App. 2008). An objective test is used to determine whether an act is deceptive under FDUTPA, and “the plaintiff must show that ‘the alleged practice was likely to deceive a consumer acting reasonably in the same circumstances.’ ” Carriuolo, 823 F.3d at 983–84 (quoting State, Office of the Att’y Gen. v. Com. Com. Leasing, LLC, 946 So. 2d 1253, 1258 (Fla. Dist. Ct. App. 2007)); accord Zlotnick v. Premier Sales Grp., Inc., 480 F.3d 1281, 1284 (11th Cir. 2007). To establish an unfair practice, the plaintiff must show that it is “one that ‘offends established public policy’ and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’ ” PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773, 777 (Fla. 2003) (quoting Samuels v. King Motor Co. of Fort Lauderdale, 782 So. 2d 489, 489 (Fla. Dist. Ct. App. 2001)). Actual damages under FDUTPA “are measured according to ‘the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties.’ ” Carriuolo, 823 F.3d at 986 (quoting Rollins, Inc. v. Heller, 454 So. 2d 580, 585 (Fla. Dist. Ct. App. 1984)). A plaintiff, however, cannot state a cause of action under FDUTPA if the consumer fails to plead that they suffered actual damages. See Macias v. HBC of Florida, Inc., 694 So. 2d 88, 90 (Fla. Dist. Ct. App. 1997) (holding that plaintiff failed to state a cause of action under FDUTPA as she suffered no actual damages and affirming dismissal of complaint with prejudice). Indeed, “[t]he members of [a] putative class who experienced no actual loss have no claim for damages under FDUTPA.” Rollins, Inc. v. Butland, 951 So. 2d 860, 873 (Fla. Dist. Ct. App. 2006)). FDUTPA “does not provide for the recovery of nominal damages, speculative losses, or compensation for subjective feelings of disappointment.” Barton, 988 So. 2d at 86 (quoting Rollins, 951 So. 2d at 873).
Marrache, 2021 WL at *8 (explaining FDUTPA “requires an aggrieved person to suffer actual damages”).
FDUTPA further includes a safe harbor provision that “ provides that FDUTPA does not apply to ‘[a]n act or practice required or specifically permitted by federal or state law. ’” Id. at *8 quoting Fla.Stat. s. 501.212(s).
Marrache involved the sale of Bombay Sapphire gin where the gin markets and labels that it contains botanical ingredients including “grains of paradise.” A class action was filed claiming this violated FDUTPA. The defendants moved to dismiss the lawsuit arguing that the plaintiff did not allege how grains of paradise violated FDUTPA or the actual damages suffered. The defendants also argued that regardless of the allegations the plaintiff’s FDUTPA claim is barred by the safe harbor provision since the Food and Drug Administration identified grains of paradise as a substance generally recognized as safe. The trial court agreed with the defendants and dismissed the complaint.
The Eleventh Circuit Court of Appeals agreed with the trial court. The defendant failed to demonstrate how the plaintiff’s compliance with federal law falls outside of FDUTPA’s safe harbor provision when grains of paradise is generally recognized as safe by the Food and Drug Administration. Marrache, 2021 WL at *8 (“ [A]n act specifically permitted by federal law cannot serve as the basis for a FDUTPA claim….Because grains of paradise is a substance specifically permitted under federal law to be included in alcohol, FDUTPA’s safe harbor applies and [the plaintiff’s] FDUTPA claims against Defendants are barred by the safe harbor provision of FDUTPA .”).
Moreover, as an aside, the Eleventh Circuit held that the plaintiff had NOT alleged facts to state a plausible claim for suffering actual damages under FDUTPA. Marrache, 2021 WL at *10 (“[ E]ven if the sale of Bombay containing grains of paradise is illegal under Florida law, Bombay certainly is not ‘worthless’ in other states, as it is permitted to be sold under federal law and is thus not valueless under the benefit-of-the-bargain theory for actual damages under FDUTPA….Indeed, FDUTPA does not provide for the recovery of nominal damages, speculative losses, or compensation for subjective feelings of disappointment. Because FDUTPA requires an aggrieved person to suffer actual damages, we conclude that [the plaintiff] has not pled a plausible claim for actual damages under FDUTPA .’’) (internal citations and quotation omitted).
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.
