What behavior is covered by the Consumer Protection Act?

The New Hampshire Supreme Court answered this question in part in State v. James Moran d/b/a Exterior Solutions, The Supreme Court considered the appeal of Mr. Moran, who had been convicted criminally under the Consumer Protection Act (CPA) for taking payment for a vinyl siding job and never performing the work, despite repeated requests. The question posed was to determine what behavior offended the Consumer Protection Act if it did not fall into one of the enumerated categories set forth in RSA 358-A:2.


Mr. Moran argued that the case was not one that violated the Consumer Protection Act, but rather, a simple matter of breach of contract. He further argued that for his conduct to fall under the Consumer Protection Act’s general prohibition of unfair and deceptive acts, it would have to satisfy the three-pronged test the Supreme Court had set forth in Hughes v. DiSalvo, 143 NH 576 (1999): “To determine whether the Consumer Protection Act applies to a particular transaction, we analyze the activity involved, the nature of the transaction, and the parties to determine whether a transaction is a personal or business transaction.”


The Supreme Court rejected this argument, however; holding that the three factors set forth in Hughes v. DiSalvo were only intended to determine whether a transaction was business or personal. To determine if conduct is unfair or deceptive the court reinforced the amorphous and ill-defined “rascality test”; that is, whether the conduct would raise the eyebrow of one inured to the rough and tumble in the world of commerce. The Court pointed to its decision in Milford Lumber v. RCB Realty, 147 N.H. 15 (2001) for the factors it considers applicable to the rascality test:


1)  Whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise – whether, in other words, it is within at least the penumbra of some common-law, statutory or other established concept of unfairness;


2)  Whether it is immoral, unethical, oppressive, or unscrupulous;


3)  Whether it causes substantial injury to consumers (or competitors or other businessmen).


Thus, in order for a breach of contract claim to also fall under the Consumer Protection Act it must include “conduct in disregard of known contractual arrangements and intended to secure benefits for the breaching party…or fraudulent representations in knowing disregard of the truth.” While the rascality test still appears to be comprehensive in its scope, the Court has provided some guidance with respect to the difference between a garden variety breach of contract claim and the more formidable CPA claim. Many breach of contract claims are filed in tandem with a claim for a violation of the CPA, mainly because attorneys are seeking the double or treble damages and attorney fees that the CPA provides. Moran will make success in those cases less likely, but leave truly rascalous business conduct still subject to the CPA.


In 1993, Ken Bouchard and Paul Kleinman prosecuted on behalf of their client one of the largest CPA cases ever in New Hampshire resulting in a $2.2 million dollar verdict. If you feel that you or your business has been damaged by rascalous business conduct, Bouchard, Kleinman & Wright can provide expertise you need. Call 603-623-7222 for a free consultation to learn about your legal rights as a consumer.


This article has been prepared by Bouchard, Kleinman & Wright, P.A. for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

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