HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 157

49th legislature - STATE OF NEW MEXICO - first session, 2009

AN ACT

RELATING TO UNFAIR PRACTICES; EXPANDING THE PRIVATE RIGHT OF ACTION UNDER THE UNFAIR PRACTICES ACT FOR ANY UNFAIR OR DECEPTIVE TRADE PRACTICE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 57-12-2 NMSA 1978 (being Laws 1967, Chapter 268, Section 2, as amended) is amended to read:

     "57-12-2. DEFINITIONS.--As used in the Unfair Practices Act:

          A. "person" means, where applicable, natural persons, corporations, trusts, partnerships, associations, cooperative associations, clubs, companies, firms, joint ventures or syndicates;

          B. "seller-initiated telephone sale" means a sale, lease or rental of goods or services in which the seller or [his] the seller's representative solicits the sale by telephoning the prospective purchaser and in which the sale is consummated entirely by telephone or mail, but does not include a transaction:

                (1) in which a person solicits a sale from a prospective purchaser who has previously made an authorized purchase from the seller's business; or

                (2) in which the purchaser is accorded the right of rescission by the provisions of the federal Consumer Credit Protection Act, 15 U.S.C. 1635 or regulations issued pursuant thereto;

          C. "trade" or "commerce" includes the advertising, offering for sale or distribution of any services and any property and any other article, commodity or thing of value, including any trade or commerce directly or indirectly affecting the people of this state;

          D. "unfair or deceptive trade practice" means an act specifically declared unlawful pursuant to the Unfair Practices Act, a false or misleading oral or written statement, visual description or other representation of any kind knowingly made in connection with the sale, lease, rental or loan of goods or services or in the extension of credit or in the collection of debts by a person in the regular course of [his] the person's trade or commerce, which may, tends to or does deceive or mislead any person and includes but is not limited to:

                (1) representing goods or services as those of another when the goods or services are not the goods or services of another;

                (2) causing confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services;

                (3) causing confusion or misunderstanding as to affiliation, connection or association with or certification by another;

                (4) using deceptive representations or designations of geographic origin in connection with goods or services;

                (5) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation or connection that [he] the person does not have;

                (6) representing that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used or secondhand;

                (7) representing that goods or services are of a particular standard, quality or grade or that goods are of a particular style or model if they are of another;

                (8) disparaging the goods, services or business of another by false or misleading representations;

                (9) offering goods or services with intent not to supply them in the quantity requested by the prospective buyer to the extent of the stock available, unless the purchaser is purchasing for resale;

                (10) offering goods or services with intent not to supply reasonable expectable public demand;

                (11) making false or misleading statements of fact concerning the price of goods or services, the prices of competitors or one's own price at a past or future time or the reasons for, existence of or amounts of price reduction;

                (12) making false or misleading statements of fact for the purpose of obtaining appointments for the demonstration, exhibition or other sales presentation of goods or services;

                (13) packaging goods for sale in a container that bears a trademark or trade name identified with goods formerly packaged in the container, without authorization, unless the container is labeled or marked to disclaim a connection between the contents and the trademark or trade name;

                (14) using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if doing so deceives or tends to deceive;

                (15) stating that a transaction involves rights, remedies or obligations that it does not involve;

                (16) stating that services, replacements or repairs are needed if they are not needed; or

                (17) [failure] failing to deliver the quality or quantity of goods or services contracted for; and

          E. "unconscionable trade practice" means an act or practice in connection with the sale, lease, rental or loan, or in connection with the offering for sale, lease, rental or loan, of any goods or services, including services provided by licensed professionals, or in the extension of credit or in the collection of debts [which] that to a person's detriment:

                (1) takes advantage of the lack of knowledge, ability, experience or capacity of a person to a grossly unfair degree; or

                (2) results in a gross disparity between the

value received by a person and the price paid."

     Section 2. Section 57-12-10 NMSA 1978 (being Laws 1967, Chapter 268, Section 8, as amended) is amended to read:

     "57-12-10. PRIVATE REMEDIES.--

          A. A person likely to be damaged by an unfair or deceptive trade practice or by an unconscionable trade practice of another may be granted an injunction against it under the principles of equity and on terms that the court considers reasonable. Proof of monetary damage, loss of profits or intent to deceive or take unfair advantage of [any] a person is not required. Relief granted for the copying of an article shall be limited as to the prevention of confusion or

misunderstanding as to source.

          B. Any person who suffers [any] loss of money or property, real or personal, as a result of [any] employment by another person of a method, act or practice [declared unlawful by the Unfair Practices Act] that is an unfair or deceptive trade practice may bring an action to recover actual damages or the sum of one hundred dollars ($100), whichever is greater. Where the trier of fact finds that the party charged with an unfair or deceptive trade practice or an unconscionable trade practice has willfully engaged in the trade practice, the court may award up to three times actual damages or three hundred dollars ($300), whichever is greater, to the party complaining of the practice.

          C. The court shall award attorney fees and costs to the party complaining of an unfair or deceptive trade practice or unconscionable trade practice if the party prevails. The court shall award attorney fees and costs to the party charged with an unfair or deceptive trade practice or an unconscionable trade practice if it finds that the party complaining of such trade practice brought an action that was groundless.

          D. The relief provided in this section is in addition to remedies otherwise available against the same conduct under the common law or other statutes of this state.

          E. In [any] a class action filed under this section, the court may award damages to the named plaintiffs as provided in Subsection B of this section and may award members of the class such actual damages as were suffered by each member of the class as a result of the unlawful method, act or practice.

          F. A party to a court action for a private remedy pursuant to this section may request in writing during the thirty-day period following service of the summons and complaint on all parties named in the action that the parties attempt to settle the claim in early mediation. If a request for mediation is made, the parties shall choose a mutually acceptable mediator and enter into mediation within sixty days of the appointment of an acceptable mediator unless otherwise agreed by the parties. A request for mediation may be rescinded at any time if agreed to by all parties.

          G. If the parties do not agree on a mutually acceptable mediator, the court shall appoint the mediator. If the early mediation pursuant to this section is entered into within sixty days following the appointment of the mediator, the parties suing on the basis of unfair, deceptive or unconscionable trade practices or acts under the Unfair Practices Act shall be required to pay no more than fifty dollars ($50.00) toward the cost of the mediation and the other party shall pay the remainder of such cost, unless otherwise agreed by the parties. If a person is seeking injunctive relief in accordance with Subsection A of this section, the person may pursue the claim for injunctive relief without following the mediation requirements of this subsection and Subsection F of this section."

     Section 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.

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