Walls v. American Tobacco Co., 92,324.

• Decision Date: 19 September 2000
• Docket Number: No. 92,324.,92,324.
• Citation: 11 P.3d 626,2000 OK 66
• Parties: Brian WALLS, et al., Plaintiffs, v. The AMERICAN TOBACCO COMPANY, et al., Defendants.
• Court: Oklahoma Supreme Court

11 P.3d 626

2000 OK 66

Brian WALLS, et al., Plaintiffs, v. The AMERICAN TOBACCO COMPANY, et al., Defendants.

No. 92,324.

Supreme Court of Oklahoma.

September 19, 2000.

Derek S. Casey, Hutton & Hutton, Wichita, Kansas for plaintiffs.

Richard C. Ford, Leanne Burnett, Victor E. Morgan, Crowe & Dunlevy, Oklahoma City, Oklahoma for defendants.

WINCHESTER, J.

¶ 1 The United States District Court for the Northern District of Oklahoma has before it the question of whether it should certify a class of cigarette smokers in a case against six current or former manufacturers of cigarettes and the Council for Tobacco Research. The Federal Court has determined that there are certain unresolved questions of Oklahoma law that may be determinative. The Court has certified the following questions of law to this Court pursuant to 20 O.S.1991, 1601 et seq.:

"1. Assuming arguendo that a product was sold in violation of other provisions of the Oklahoma Consumer Protection Act ("OCPA"), may a party bring an action as an "aggrieved consumer" under 15 O.S. 761.1A solely as a result of his or her payment of the purchase price for that product?

"2. May an individual person bring a claim for liability under 15 O.S. 761.1C against an entity based on a violation of the OCPA?

"3. If an action is brought under either or both 15 O.S. 761.1A or 15 O.S. 761.1C, is that action limited to conduct that occurred since 1988?

"4. If the answer to question 1 is yes, if a class is certified under the OCPA consisting of all persons who have purchased such an OCPA violating product in Oklahoma solely on the basis of the purchase price, will the members of such class be precluded from bringing any separate actions sounding either in tort or contract by virtue of any Oklahoma law prohibiting split causes of action?"

¶ 2 For the reasons discussed below, our answer to questions 1 and 2 is no, and our answer to question 3 is yes. Because the answer to question 1 is no, we do not reach question 4.

I. THE PERTINENT AMENDMENTS TO THE OCPA.

¶ 3 The OCPA was first enacted in 1972. The title of the OCPA expressly vested authority in the Attorney General for enforcement of the OCPA. The Attorney General was authorized to bring actions to restrain the unlawful practices enumerated in the OCPA. 1972 Okla.Sess.Laws, ch. 227, § 5, codified in title 15, § 755. The OCPA also provided for civil penalties. Pursuant to the original civil penalty provision, 1972 Okla. Sess.Laws, ch. 227, § 11, codified at § 761 of title 15, the legislature authorized the Attorney General to recover a civil penalty of not more than $5,000.00 per violation from any person who violated the terms of a permanent injunction.

¶ 4 The first relevant amendment to the OCPA occurred in 1980. See 1980 Okla.Sess. Laws, ch. 192 § 4, codified at title 15, § 761.1. The 1980 amendment provided in pertinent part:

"A. The commission of any act or practice declared to be a violation of the Consumer Protection Act shall render the violator liable to the aggrieved consumer for the payment of actual damages sustained by the customer and costs of litigation including reasonable attorney's fees.

"B. The commission of any act or practice declared to be a violation of the Consumer Protection Act, if such act or practice is also found to be unconscionable, shall render the violator liable to the aggrieved customer for the payment of a civil penalty, recoverable in an individual action only, in a sum set by the court of not more than Two Thousand Dollars ($2,000) for each violation ....

"C. Any person who wilfully violates the terms of any injunction or court order issued pursuant to the Consumer Protection Act shall forfeit and pay a civil penalty of not more than Ten Thousand Dollars ($10,000.00) per violation, in addition to other penalties that may be imposed by the court, as the court shall deem necessary and proper. For the purposes of this section, the district court issuing an injunction shall retain jurisdiction, and in such cases, the Attorney General, acting in the name of the state, or a district attorney may petition for recovery of civil penalties.

"D. In administering and pursuing actions under this act, the Attorney General and a district attorney are authorized to sue for and collect reasonable expenses and investigation fees as determined by the court. Civil penalties or contempt penalties sued for and recovered by the Attorney General or a district attorney shall be used in furtherance of their duties and activities under the Consumer Protection Act."

¶ 5 The above quoted section is the one which was examined by this Court in Holbert v. Echeverria, 1987 OK 99, 744 P.2d 960. In Holbert, this Court held that a private individual was not authorized to prosecute a consumer protection claim, and that the power to seek redress for violations of the OCPA was expressly conferred upon the Attorney General or a district attorney. Holbert, 1987 OK 99, ¶ 15, 744 P.2d at 965.

¶ 6 After the Holbert decision, the legislature amended § 761.1(A) to expressly provide a private right of action to an aggrieved consumer. Section 761.1(C) was left undisturbed. 1988 Okla.Sess.Laws, ch.161, § 2. The 1988 amendment to § 761.1(A), with the additions underlined, provided:

"A. The commission of any act or practice declared to be a violation of the Consumer Protection Act shall render the violator liable to the aggrieved consumer for the payment of actual damages sustained by the customer and costs of litigation including reasonable attorney's fees, and the aggrieved consumer shall have a private right of action for damages, including but not limited to, costs and attorney's fees. In any private action for damages for a violation of the Consumer Protection Act the court shall, subsequent to adjudication on the merits and upon motion of the prevailing party, determine whether a claim or defense asserted in the action by a nonprevailing party was asserted in bad faith, was not well grounded in fact, or was unwarranted by existing law or a good faith argument for the extension, modification, or reversal of existing law. Upon so finding, the court shall enter a judgment ordering such nonprevailing party to reimburse the prevailing party an amount not to exceed Ten Thousand Dollars ($10,000) for reasonable costs, including attorney's fees, incurred with respect to such claim or defense."

¶ 7 The next pertinent amendment to § 761.1 occurred in 1994. 1994 Okla.Sess.Laws, ch.235, § 4. The 1994 amendment added a phrase, which is underlined, to § 761.1(C):

"C. Any person who is found to be in violation of the Oklahoma Consumer Protection Act in a civil action or who willfully violates the terms of any injunction or court order issued pursuant to the Consumer Protection Act shall forfeit and pay a civil penalty of not more than Ten Thousand Dollars ($10,000.00) per violation, in addition to other penalties that may be imposed by the court, as the court shall deem necessary and proper. For the purposes of this section, the district court issuing an injunction shall retain jurisdiction, and in such cases, the Attorney General, acting in the name of the state, or a district attorney may petition for recovery of civil penalties."

¶ 8 Section 761.1 has not changed, in the parts pertinent to the present inquiry, since the 1994 amendment (minor amendments to other subsections of § 761.1 occurred in 1997, 1998 and 1999). Thus § 761.1(A) is currently identical to the subsection as amended in 1988, and § 761.1(C) is identical to the subsection as amended in 1994.

II. ASSUMING ARGUENDO THAT A PRODUCT WAS SOLD IN VIOLATION OF OTHER PROVISIONS OF THE OCPA, A PARTY MAY NOT BRING AN ACTION AS AN "AGGRIEVED CONSUMER"UNDER § 761.1(A) SOLELY AS A RESULT OF HIS OR HER PAYMENT OF THE PURCHASE PRICE FOR THAT PRODUCT.

¶ 9 The first certified question asks if a party may sue as an aggrieved consumer pursuant to § 761.1(A) solely as a result of paying the purchase price for a product. The plaintiffs argue that the consumer need not prove actual damages. Subsection A specifically states that an act or practice declared to be a violation of the OCPA renders the violator liable to the aggrieved consumer for the payment of actual damages. The 1988 amendment in response to Holbert added that the aggrieved consumer shall have a private right of action for damages. Title 23 O.S.1991, 61 provides: "For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this chapter, is the amount which will compensate for all detriment proximately caused thereby, whether it could have been anticipated or not."

¶ 10 The plaintiffs' argue that being an aggrieved consumer merely requires proof that a plaintiff was the consumer in an unlawful transaction. But 761.1(A) plainly states otherwise. That subsection confers upon an "aggrieved consumer" a private right of action for damages. Actual damages are a necessary element of a claim under this subsection. In Whitlock v. Bob Moore Cadillac, Inc., 1997 OK 56, 938 P.2d 737, the plaintiff sued for damages based on fraud and violation of the OCPA. The trial court granted summary judgment to the defendant. In affirming, we observed that the record revealed that the plaintiffs had incurred no monetary damages and had received precisely what they had bargained for. Whitlock, 1997 OK 56, ¶ 3, 938 P.2d at 738.

¶ 11 Even the term "aggrieved consumer" implies that the consumer must have suffered some detriment caused by a violation of the OCPA. The consumer must have suffered some detriment to successfully pursue a private right of action under § 761.1(A). We have defined "aggrieved party," for the purpose of appellate standing, as one whose pecuniary interest in the subject matter is directly and injuriously affected, or one whose right in property is either established or divested by the decision from which the appeal is prosecuted. Cleary Petroleum Corp. v....