Fourth DCA Affirms Summary Judgment Dismissing Corporate FDUTPA Claim

On March 6, 2019, the Fourth District Court of Appeal affirmed summary judgment in a suit between auto dealerships, in a case styled, Stewart Agency, Inc. v. Arrigo Enterprises, Inc., No. 4D18-813, __ So. 3d __.  There, the plaintiff, Stewart Agency, Inc., sued Arrigo Enterprises, Inc. and Arrigo Ft. Pierce, LLC,  alleging that Stewart, which refused to resell used Toyotas with unremediated Takata airbags, had been damaged by the alleged practice of its competitor, Arrigo, of reselling Toyotas with unremediated airbags.

The trial court found that Stewart had failed to show any of the requisite showings for a claim under Florida’s Deceptive and Unfair Trade Practices Act: there was no deceptive and unfair trade practice; no practice of Arrigo harmed Stewart; and Stewart had suffered no damages from anything that Arrigo allegedly did.

The Fourth DCA agreed.  As for the first element, an alleged unfair or deceptive trade practice must injure a consumer to be actionable.  Stewart, however, could not identify a single instance where Arrigo sold a vehicle to a consumer without disclosing that it was subject to an airbag recall notice.  Second, Stewart’s damages – having to hold Toyota vehicles until their airbags were remediated – was not caused by Arrigo.  It was a business decision that Stewart made independent of anything having to do with Arrigo.  

As for Stewart’s claims for declaratory judgment and injunctive relief, the Fourth DCA determined that FDUTPA permitted a broader group of plaintiffs to sue, so long as they were “aggrieved”, which, for individuals, included anyone who had been treated unfairly.  For corporations such as Stewart, however, such standing required a showing that its legal rights had been adversely affected or that it had been damaged financially by a legally infringing act.   In addition, a corporation seeking declaratory judgment or injunctive relief also must show that an unfair or deceptive practice was injurious to consumers.

Here, Stewart was not adversely affected.  Also, it would have been completely speculative for Stewart to have associated any losses of its own vehicle sales to Arrigo’s business practices.  And there was no evidence that any consumer was injured by Arrigo’s practices.

Accordingly, businesses must be wary of bringing FDUTPA claims against competitors unless their legal rights have been directly impaired by the competitor’s business practices and unless consumers have been damaged.Vague allegations of unfair market practices that do not meet this standard face dismissal.