KLEMM. BLAIR. STERLING 6 JOHNSON. 21-18 part...LAW OFFICES KLEMM. BLAIR. STERLING 6 JOHNSON A...

LAW O F F I C E S

K L E M M . B L A I R . STERLING 6 J O H N S O N A PROFESSIONAL COAPORCTIOH

J BRADLEY KLEMM SUITE 1008 PACIFIC NEWS ~ U I L D I N C WILLIAM J BLAIR THOMAS C S T E R L I N G

2 3 8 A R C H e l S H O P F C FLORES S T R E E T

R I C H A R D L J O H N S O N AGANA. GUAM 96910 T H O M A S P KEELER

G ANTHONY L O N G

ELIZABETH MELANCON

TELEX 6413 KLtAS?

TCLECOPlER t6711 4 7 2 - 4 2 9 0

March 30, 1988

HAND DELIVERY

Senator Pilar C. Lujan Chairperson, Committee on Justice, Judiciary, and Criminal Justice

Nineteenth Guam Legislature Agana, Guam

Re: Bill 129

Dear Senator Luj an:

This can be considered written testimony on Bill 129. I apologize for not appearing at the public hearing on the bill, but it had been my understanding that my comments, or ones similar to them, would be incorporated into testimony to be presented by the Guam Chamber of Commerce. After having arrived late at the public hearing on March 28, 1988, I learned that the Chamber of Commerce had not submitted testimony, as I had understood it would. I would, therefore, respectfully request the Committee to consider these belated comments.

First of all, I would note that Bill 129 is identical to Bill 682 which was introduced by Senator Nelson in the Eighteenth Guam Le islature. I would also note that provisions of Bill 1 4 9 are similar to certain provisions of contained in Bill 620, which was introduced in the Eigh- teenth Guam Legislature by now Governor Ada. Bill 620 was drafted by, I believe, former Chief Prosecutor Tom Lannen. In correspondence back in 1986, former Chief Prosecutor Lannen advised me that the bill drafted by him was based in large part on the Model State Antitrust Act drafted by the National Conference of Commissioners on Uniform State Laws.

Because of these facts, I believe it is very important that any committee report on Bill 129 provide a thorough history of its evolution, so that persons who in the future

t . 4 ~ O ~ I C . S 01 KLEMM. BLAIR STERLING & JOHNSON, 4 P r o F E s s t o w I C c o e ~ o ~ ) * r a o H

TO Senator Pilar C. L~jan Date March 30, 1988

may be called upon to interpret the provisions of the bill or give advice upon it would have adequate legislative history to guide them. If the pedigree of this bill can in fact be traced back to the Model State Antitrust Act, this should be spelled out in the legislative history. More importantly, if the Model State Antitrust Act provided the initial framework upon which the legislation was based, then the legislative history should clearly state why certain provisions of the Model Act were not adopted or were modified.

I believe that a thorough legislative history is essential because the provisions of this bill, including the to,rminology and phraseology used, differ in some instances from the provisions, terms, and phrases of the jurisprudence of antitrust law which has evolved in the 100 years since the Sherman and Clayton Acts were enacted by the United States Congress. The 100 years of decisional law provides persons studying antitrust problems guidelines to help them conform their conduct to the requirements of the law. In certain respects, Bill 129 would be an "0.0.G." statute. As a consequence, unless there was a comprehensive legislative history, persons doing business in Guam could not confidently rely on existing antitrust principles and jurisprudence. The persons who would, as a result, benefit the most from its enactment of Bill 129 would be attorneys, as we would be paid to establish judicial guidelines through litigation.

Having offered that general comment, I would like to express certain reservations I have about the need for a local antitrust bill. I say reservations because it is my feeling that there is a substantial question as to the need for such a bill, I believe the impetus for the various antitrust bills which have been introduced in the Legis- lature has its source in comments which have been made from time to time by the Attorney General's office in testimony before the Legislature. For example, when called by the Legislature to testify in hearings as to alleged gasoline price fixing on the part of Mobil and Exxon, representatives of the Attorney General ' s office have invariably explained or rationalized their "lack of action" on, among other things, the lack of local antitrust legislation. The true reason, I suspect, for the Attorney General office's "lack of action" is that it lacks the resources and expertise

L a r 0tttc.s ot KLEMM, BLAIR STERLING & JOHNSON, A raorcsr lok*c coaroarrlow

Senator Pilar C. Lujan Oate March 30, 1988

necessary to mount a major antitrust effort. Moreover, it is my personal feeling that the Attorney General has never had a factual basis for bringing any such action in the first place.

Be all that as it may, it is my belief that the Attorney General's office presently has all of the legal tools necessary to bring an antitrust action pursuant to the federal antitrust laws, and that an "O.O.G.' antitrust law is neither necessary nor advisable. I would, therefore, like to address what I believe is a fundamental misappre- hension of the sponsors of Bill 129.

Under the United States Constitution, Congress is limited in its powers to regulate intra-state comerce. Thus, for the purposes of the S h e r m a n i Clayton Acts, a plaintiff must generally show some substantial effect on interstate commerce. In the case of Guam, on the other hand, as with the other territories of the United States, Congress' power to regulate commerce is not so limited, As a consequence, under Section 3 of the Sherman Act (15 USC $ 3 ) , Congress has prohibited restraints of trade which have purely intra-territorial effects -- i.e., restraints which only af fecttrade within Guam.

State antitrust laws are meant to cover the gap left by the federal antitrust laws -- i.e., intra-state activities. Bill 129, as I stated before, is appa-y based in part at least upon the Model State Antitrust Act. That act was intended to reach those activities which fall without the proscription of the Sherman Act. As noted, however, it is doubtful whether there is any activity in Guam which is outside the reach of the Sherman Act and other federal antitrust laws.

Furthermore, contrary to representations which have been made from time to time over the years, there is no question as to the power of the Attorney General's office to bring actions to enforce claims under the federal antitrust laws. To the contrary, Section 4 C of the Clayton Act (15 USC QlSc(a)) provides that an Attorney General of a "State" may bring a civil action in the name of the State, as arens patriae on behalf of natural persons residing in such k to secure monetary relief for injuries sustained by such natural persons to their property by reason of any violation

L a w O n t ~ . l oc KLEMM. BLAIR STERLING & JOHNSON, A r aorcs s lo++A~ comroarr ,o~

TO Senator Pilar C, Lujan Oate March 30, 1988 Pace 4

of the Sherman Act. (I have enclosed copies of various sections of the Sherman and Clayton Acts for your easy reference.) For the purposes of Section 4C of the Clayton Act, the term "State Attorney General" means the chief legal officer of a State, or any other person authorized by State law to bring actions under Section 4C. Moreover, the term "State" includes Guam. (See §4G of the Clayton Act (15 USC - 915g) . I

Thus, the Attorney General's office would be free to bring any action on behalf of the people of the Territory of Guam (at least the natural persons) based on an alleged conspiracy between the oil companies to fix the price of gasoline, or any other unlawful restraint of trade affecting the citizens of Guam. Assuming the Attorney General could prove such a conspiracy or unlawful restraint, it could establish damages pursuant to Secticn 4D of the Clayton Act (15 USC S15d) by various methods. Such damages could be distributed in the manner prescribed by the District Court or could be deemed a civil penalty to be deposited into the Guam general fund, (See Section 4E of the Clayton Act (15 USC j15e),)

In view of the sections of the Clayton Act referred to above, it is clear that the purported reason for the legislation -- the lack of any local enforcement power -- is bogus. Moreover, given the extent of Congress' power to regulate intra-territorial commerce, there is simply no need for a loc-ntitrust law. The Sherman Act would appear to cover all intra-territorial activities. To the extent that - Bill 129 trles to create a new cause of action, it is merely duplicative of federal law.

In my view, it would be unwise for Guam to enact such an untested new law, the construction and interpretation of which would, in any event, probably be dependent upon the construction of the similar federal laws, If Bill 129 were enacted, we might, for practical purposes, wind up with a local antitrust law which would simply "mirror" the Sherman Act, but which would not reach any conduct not covered by the Sherman Act. As previously stated, if the Legislature intends to create something different from a mirrored Sherman Act, it should clearly spell out that intention in the legislative history.

L a w OWIC.S of KLEMM, BLAIR STERLING h JOHNSON, A r a o r c s s , o * k ~ c o a r o a r r i o N

TO Senator Pilar C. Lujan Date March30,1988 P a g e 5

My last general reservation about the bill concerns the possible adverse impact on the general legal environment in Guam. Over the vears the Government of Guam and the private sector have atfernpeed to develop Guam's reputation as a stable political and legal environment where U.S. based companies could comfortably locate themselves. One of the advantages that Guam has in this regard is that such companies can rely upon the law, as it has been developed in the federal courts, with respect to antitrust concerns. Companies familiar with these laws and their interpretation in the federal courts can plan their activities and actions accordingly so as to not run afoul of the laws. If, on the other hand, Guam were to enact an O.O.G. antitrust act, exposing such companies to uncertain liability or, at the least, costly litigation, I feel there would be a serious detraction from the image Guam has attempted at great expense to portray.

One way to address this concern would be, as I initially stated, to clearly set forth the legislative history of Bill 129. If it in fact has been largely borrowed from a uniform act or from some particular state's law, that should be very carefully spelled out, In addition, if the Legislature intends that the courts of Guam should follow the interpretations of state courts in other jurisdictions which have interpreted the model law or other borrowed law, that should be clearly stated. This would at least give companies seeking to comply with the law jurisdictions to look to for decisions interpreting the law in order that they can confidently shape their conduct to conform to that law. If, on the other hand, Bill 129 contains unique provisions, I believe it is absolutely imperative that the Legislature give us lawyers, who are in the business of interpreting the laws you pass, adequate guidance as to what it is that you intend those provisions to mean. If you intend for the law to mean that the same types of activities which have been found to be illegal under the Sherman Act (or legal for that matter), are to be illegal (or legal) under Guam's local law (as the case may be), then you should so state. If you intend for the law to mean something different than the federal law, then you should state that.

Otherwise, you will be simply sentencing the Guam business community to years of uncertainty as the questions

L A - ~ l f t c . ~ 01 KLEMM. BLAIR, STERLING 61 JOHNSON, A . - a o r c r s , o N A ~ coaPomrr ,oM

T o Senator Pilar C. Lujan Oate March 30, 1988

are worked out through costly judicial proceedings. This will have negative implications for companies doing business in Guam or which might be considering locating here.

Thank you for providing the opportunity to offer these comments on Bill 129.

Very truly yours,

Enclosures G22/ WD0096(CC/l)

MONOPOLIES; RESTRAIHTS OF TRADE I S USCS 0 3

§ 3. Trusts in Territorks or District of Columbia illegal; combinn- I don r felony I I Every contract, combination in fonn of trust or otherwise, or conspiracy,

in restraint of trade or commerce in any Temtory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and mother, or between any such Territory or Tenit* ries and any State or States or the District of Columbia, or with foragn nations, or between the District of Columbia and any State or States or foreign nations, is declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed @ty of a felony, and, on conviction thereof, shall be punished by tine not excttding one million dollan if a corporation, or, if any other penon, one hundred thousand dollars, or by imprisonment not e x d i n g three years, or by both said punishments, in the discretion of the court. (July 2, 1890, ch 647, 3, 26 Stat. 209; July 7, 1955, ch 281, 69 Stat. 282; DCC. 21, 1974, P. L. 93-528, Q 3, 88 Stat. 1708.)

HISORY; ANCILLARY LAWS AM) DIFWXWES Amendmen* 1955. Act July 7, 1955, substituted "shall be punished by b e not exud ing M y thousand doUrn, or by imprisonment not exceeding one yea? for "shall be punisbed by fine not exceeding 6ve thousand dollan, or by imprisonment not e x d i n g one year". 1M4. Act Dec. 21, 1974, substituted "felony" for "misdemeanor", "one million dollars if r corporation, or, if m y otber pemn, one hundred thousmd dollan" for "bAy thousand d o b " , and "three yean" for "one year".

CROSS REFERENCES Combination in restraint of import trade, 15 USCS Q 8. Discrimination in price, sc r v i a or facilitia 15 USCS Q 13. Antitrust laws inapplicable to kbor or~aniLations, 15 USCS Q 17. Felony, offense punishable by deatb or imprisonment for r term exceeding one year as, 18 USCS Q 1. Conspiracy to commit offense or to defraud United States, 18 USCS Q 371. C m e n relieved from operation of 15 USCS ## 1 ct xq., 49 USCS Q 11 34 1.

RESEARCH GUIDE Am Jw. 8 Am Jur 2d, Aviation Q 48. 32 Am Jur 2 4 Fair Trade Lws Q 1. 48 Am Jur Zd, L b o r m d Labor Relations QQ 1342, 1364. 54 Am Jur 26 Monopolies, Ra tminu of Trrde, and Unfair Trade Practices $9 3-5, 9, 10, 20, 21, SO, 81, 83. Am Jut 'I'd& Defending Antitrust Lawsuits, 24 Am Jur Trials, p. 1.

15 USCS 5 lSb, n 22 COMMERCE AND TRADE

infringement vtiom agurut other in- duced pliultfi to rdrrin from bringmg r n t ~ v w t $rut rmf thereby t o w 15 USCS ) I Sb sututc d bmiu~OfU wh- h f ~ g e m a l t UXlOiU WC?Z hled in tood faith to protect defendant's l q ~ t i m ~ t e inkrut in itc patmt Willmu Poultry Co. v Morton-Nomcb Produca. Inc. (1975, CAI Minn) 520 F2d 289. 1975-2 CCH Tnde Cua (604lQ 20 FR Sav Zd 930, ert den 424 US 915,47 L E d U 3 2 0 , W S C t 1116.

Wberc lalitnut oouoraclrim alleged that plainti4 W and p m t e d its p m t infringement suit rc pm of r b c w to unLwfulfy extend ropc d its p t m t for ol Limiting or excluding canpairon fnnn rdevrnt mrtlret. tolling d sututc d limiuticfu on couarerdrim w u nu wurrntal. where underlying evidencc whKb mi& k & to support counterclaim would

mun patent infringement .aton; mtitnut w- t e n h Ned ylmct p l i n t d wbo brought p- t a t infringement suit a p ~ ~ ddendult w u burd by 15 USCS 4 !5b, where m t t a alleged UI councrrchm took p b more t h ~ 4 y~ pnor to flling of counterclim; rutute oC h u - t~ w u not tolled by order u r y ~ w funber prabcding on uaue d infringement until rfta tnrl on iuue of vrlid~ty, nor w u runmas d rututc of lim~utions dccted by one ddad.nt ' s repudiation of itc indemnity apecment n t h 0 t h defendant. National Dmq PProducu Corp. v Borden Co. (1973. ED Wu) 363 F Supp 981, 180 USPQ 134. 1973-2 CCH T n h Cues 1 747 18, I8 FR Sav Zd 28. Pendency of patent intafemce p w x d n g

doa not ruuh in equitable tolling d mt~cnut cLim w h a t patent validity is not matter n t h pnmrry juridic~on of adrninistraove agency, b not public iuue of regulatory c o n m and wbar factual adjudi~xtioru of patent 06- arc not neceuuily conclusive. Bnuunck Corp. v R i q d Text& Corp. (1983. ND Ill) 578 F Supp 893. 19% 1 CCH Trade cszs B 65876.

1Sc. Actions by State Attorneys General (a) Parens patriae; monetary relief; damages; prejudgment interest. (1) Any

attorney general of a State may bring a civil action in the name of such State, as parens patriae on behalf of natural persons residing in such State, in any district court of the United States having jurisdiction of the defendant, to secure monetary relief as provided in this section for injury sustained by such natural persons to their property by reason of any violation of the Sherman Act (15 USCS $9 1 et seq.]. The court shall exclude from the amount of monetary relief awarded in such action any amount of monetary relief (A) which duplicates amounts which have been awarded for the same injury, or (B) which is properly allocable to (i) natural persons who have excluded their claims pursuant to subsection (bX2) of this section, and (ii) any business entity. (2) The court shall award the State as monetary relief threefold the total damage sustained as described in paragraph (1) c f this subsection, and the cost of suit, including a reasonable attorney's fee. The court may award under this paragraph, pursuant to a rn3tion by such State promptly made, simple interest on the total damage for the period beginning on the date of service of such State's pleading setting forth a claim under the antitrust laws and ending on the date of judgment, or for any shorter p e r i ~ d therein, if the court finds that the award of such interest for such period is just in the circumstances. In determining whether an award of interest under this paragraph for any period is just in the circumstances, the court shall consider only-

(A) whether such State or the opposing party, or either party's representative, made motions or asserted claims or defenses so lacking

MONOPOLIES; RWRAINTS OF TRADE 15 USCS Q 1%

in merit as to show that such party or representative acted intention- ally for delay or ot&erwise acted in bad faith; (B) whether, in the course of the action involved, such State or the opposing party, or either party's representative, violated any applicable rule, statute, or court order providing for sanctions for dilatory behavior or otherwise providing for exptditious proceedings; and (C) whether such State or the opposing party, or either party's representative, engaged in conduct p r i m d y for the purpose of delaying the litigation or increasing the cost thereof.

(b) Notice; exclusion election; Ann1 judgment. ( 1 ) In any action brought under subsection (aX1) of this section, the State attorney general shall, at such times, in such manner, and with such content as the court may direct, cause notice thereof to be given by publication. If the court finds that notice given solely by publication would deny due process of law to any person or persons, the court may direct further notice to such person or persons according to the circumstances of the case. (2) Any person on whose behalf an action is brought under subsection (axl) may elect to exclude from adjudication the portion of the State claim for monetary relief attributable to him by filing notice of such election with the coun within such time as specified in the notice given pursuant to paragraph (1) of this subsection. (3) The final judgment in an action under subsection (aX1) shall tK res judicata as to any claim under saction 4 of this Act [I5 USCS § 151 by any person on behalf of whom such action was brought'and who fails to give such notice within the period specified in the notice given pursuant to paragraph (1) of this subsection.

(c) DtPmISOILi or compromise of action. An action under subsection (aX1) shall not be dismissed or compromised without the approval of the court, and notice of any proposed dismissal or compromise shall be given in such manner as the coun directs.

(dl Attorney's fees. In any action under subsection (a)- \ (1) the amount of the plaintiffs' attorney's fee, if any, shall be dcter- ! mined by the court; and

(2) the court may, in its discretion, award a reasonable attorney's fa to a prevailing defendant upon a finding that the State attorney general has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.

(Oct. 15, 1914, ch 323, 8 4C, as added Sept. 30, 1976, P. L. 94-435, Title 111, 5 301, 90 Stat. 1394; Sept. 12, 1980, P. L. 96-349, $4(a)(3), 94 Stat. 1 157.)

HISTORY; ANCILLARY LAWS AND D1REC;TTYES

1 References ta text: "The antitrust laws", referred to in this section, are enumerated at 15 uscs 8 12.

1s uses 8 1!k COMMERCE AND TRADE

Amendmen* 1980. Act Sept. 12. 1980, in s u b . (a), pan. (2). inserted ' m e coun m y award under this paragraph, pursuant to r motion by such State promptly made, simple interest on the total damage for the periixi belp~lng on the date of &ce of such State's pleading setting forth a claim undu the antitrust laws and ending on the date of judgment, or for any shorter perid therein, if the court tin& that the award of such interat for such period is just in the circumstances. In determining whether an award of interest under this paragraph for any period is just in the circumstances, the court shall consider only-", and added subparas. (AHC). For application of these amendments, set Other provisions note to this section.

Other provisions: Application of section. Act Scpt. 30, 1976, P. L. 94-435, Title 111, $ 3 0 4 , 90 Stat. 1396, provided: "The amendments to the Clayton Act made by s t i o n 301 of this Act [15 USCS $5 1%-15hj shall not apply to any injury sustained prior to the date of enactment of this Act (enacted Sept. 30, 19761."

Appuation of 1980 amendment. Act Sept. 12, 1980, P. L. 96-349, 4 4(b). 94 Stat. 1157, provides: "The amendments made by this section [amending this section, among other things; for full classification, consult USCS Tables volumes] shall apply only with respect to actions commenced after the date of the enactment of this Act [enacted Sept. 12, 19801.".

CROSS REFERENCES This section is referred to in 15 USCS $8 1%. 1 5d, I5e. I Sg, 1 5h, 16; 28 USCS 4 1407.

RESEARCH GUIDE Federsl Procedure L Ed: Class Actions, Fed Proc, L Ed $ 12161. Courts m d Judicial System, Fed Proc, L Ed 20:434. Evidence, Fed Proc, L Ed $ 33:367.

Forms: I5 Federal Procedural Forms L Ed, Statutes of Limitation, and Other Time Limits 5 61:32.

L a w Review Articles: Berger, Court Awarded Attorney's Fees: What Is "Reasonable"? 126 U Pa L Rev 28 1.

INTERPREnVE NOTES A N D DECISIONS

2. P u p Anomeyr General of vanour r u t s m d corpo- 3. Conultutlolulity n t l m oouhtcl d D u m t of COlumbu have nght 4. Injury to penom on w h w khdf suit u under 15 USCS $4 l k-I Sh to m u t u n puem

brought pat- dunrge ruom m nuna of thar rap=. 5. b u u d or cornprormsc tive j u n d ~ t m on behalf of thar naturd-per-

15 USCS 8 lSc, n 5 son ra rdenu m j w d by d l e g d pnct-ll*cng con- s p m y In viohtion d ) 1, w h a t rppliablc ~ n r t ~ t u t r o n , m d L n of jundiction, rllout.C to such of ia r l s power m d rutbority to rrpracnt juridiction d i u interat in l i u p t i o h linoe uw of r t i o a uuu in favor d j u n d i a x m r involved and punuing it d v r n c a or v i n d i a t s public intaxst. P m ~ u y l v u u v Mid-Atkatic Toy* Diruibutom IIK- (1983, C44 Md) 704 F2d 125. 1983-1 CCH Trade CASU 1 65291.

S u t e attorney g e n d hu authority to iruti- tute puau pvLt action u n d a federal m t i v w t Lw; I5 USCS j l k d o a not limit rttonrcy general to raioa, to rscova damage for injury to s u t c in its proprietary u p r o t y . Texas v Sooct & Feua Co. (1983. CAS T u ) 709 EZd 1024, 1983-2 CCH T n d e C.ur (1 65503.

C o n q a t eructed pumr p a w pronuonr d Hut-Scoct-Rcdw A n t ~ v w t Improvanents Act, I5 USCSQ) I k - 1 Sh. to prowde marungfd ran- d y for w r u u m m ~ n j u d by rnutmsf nolrt~ons. Re G n n d Jury l n v a u p t l o n of CW- n u t s Inc (1981. CA2 Conn) 665 M 24, 1981- 2 CCH T n d c Crvr $64377, M den 160 US 1M. 75 L Ed 2d 945, 103 S Ct 1520.

Pumr p t n r c amendment to mti trwt L n a intended to provide u n ~ v d venue m pamu p t n u surtr, prrcnr patnrr rcuon u merdy arv procedud d m c e to enforce eurtmg ngbo d recovery t b t m d ~ n d u r l r tuve unda I5 US3 p IS; Congrew hu leflthted "sund-ra" to mm. age I ~ t r g a t m ~ for m&wd& who unnof dord to punue ewtrng remedy. Re Mjd-ALknuc Toy- om Antjtnuc L t l p t ~ o n (1981, DC Md) 52s F Supp 1265. 1982-1 CCH T n d c Crca 164493. mod on other grounds @C Md) S4I F Supp 62. Irta p r o d m g (DC Md) 560 F Supp 760, 1983-1 CCH T n d e Crsa 16530). L t a praxsd- Ing (DC Md) 56) F Supp 1379, 1983-1 CCH T n d e CLKI 11 65409. Lter p r o c d m g (DC Md) 583 F Supp 940, 19Ml CCH T n d c Cr+a 7 66040 m d later pmucdtng (DC Md) 58s F Supp 1553 m d rdd (CAI Md) 704 FZd 125. 1983.1 CCH T n d e Crra 1 65291.

4. IsJwy to prrroar on rbow kbdf d t b brouoht

I n p u m r p r t ~ o c t i o n u a d a I 5 U X S ) I k . it u not n w s u y for state to LUqe injury u, i o q u u i - w v t r a p l n t a a t h g e n e d m y . and d c g s t i o n d injury to a t e ' $ c o r u m atucnr raulting from rllw rntivurt viob.nu wu su5cirnt. Re Montgomay Couaty R&l Lute Antitrust Lit iphon (1978, DC Md) 452 F Supp 9, 1978-1 CCH T n d c Cuer 1 62070.

Elemcnu d standhg conuiacd in ) 4 d my. ton Act (IS USCS j I J ) . r r a h p r o m t in 44C of Act (IS USCS 4 Ik); plunaU Attarvy Gee- d must sbow, in addition to rutbority to sue u pueru p a w thrt ru tud p u Y a a a in sure sustained injury to their prop- by mma of viohtion of S b a m r a Act (15 USCS 4) 1 u uq.). Re Coordinated Prarirl P n r a d t n g erc. (1960. CD Cd) 497 F Supp 218. 1 9 S 2 CCH T n d c ~ 1 ~ 4 n 6 ~ 9 2 .

N o actionable coruuma tnjury for wtuch re- c o v a y m y be b d unda IS USCS 4415 ud I k uosc from rgreement bctweca distributor, disctibutor's corponfe r l6 l i . t~ ud rutocnobrle d a l e r r to dmxunt entire s u ~ a t c d list price for "protective" p r c b g e Ftom surring price of rutcF mobiles, since it a tcnlul ly p v e coa tuma sane- thing for n a b & . Re Mid-Atbr ic Toyou h t i - t n u t L i t i p t i m (1983, DC Md) 560 F Supp 760, 1983-1 CCH Tndc Crca 16S30). Lta proceeding (DC Md) 564 F Supp 1379. 1983-1 CCH T n d e Cru, 16U09, lrla p m m d m g @C Md) 583 F Supp 940, 19841 CCH T n d e Cuu 1660CO md lrla p m e c d h g (DC Md) 58s F Supp 1553.

S u t e attorney g e n m l brinpg mtiuust -on lplau w b o k v l m s u d s m rboa dcoosuwn on w h o v W he s u e cons- who b v e purchusd rmllr f m taular M d are t b a d o r indire3 purchrvn of milk frm whokrrlen Lck standing to nicr antitrust claims ad t b a d o r e attonrey pal m y WI tlUC c h u m qmnsl w h o l d c n n t b o u t pining uptive mdcn u ax~nrpurtom. New Yo& v Duryla Coopar- u v ~ Lnc. (1983. SD NY) 570 F Supp 1213. 1983-2 CCH Trade Crca 1 65606.

5 .DLml tu lo r~promlw Proposed s c t t k w n t rgrscmart unda IS

USCS ) 1 % ~ ) will not k r p p m v d by cow w h a e scttkment indudo p*idaa w b a w de fmd.nt d k D ~ O ~ U W u to diruibue moob

3. ~mtlhtloadlty coupons rcdakbk f a dircounu ca p d d r Action under 15 uscs 4 did net viohte ~'!C~st~O~~de,u~~$

USCS G n u t i t u t m , ELn~le 111, j I. rcquuing hture dvrnw rithout uu or conuovcny ktwm p b t l l h since Coo-

iq prt by pnz V a Power to rPPant d v o a t e fa d-'s d q e d l y wronfl c d u c l Ne* Y& v WronP ~ ~ W n t e d upon cit-. Re Mmt- D u r y l a Cooprrtivc I s (1982, SD NY) S47 F gorncry County R e d Esute Antitnut Litiprrorr Supp 306, 1912.83 CCH T d &SS 165I48, (1978. DC Md) 452 F Supp 54. 1978-1 CCH r p p dismd ( C N NY) 698 FZd 567, 1982-83 T n d e CIvr 1 62070. CCH T n d e Chsa 1 65 149.

$ 1% Measurement of damages In any action under section 4C(aXl) [l5 USCS $ 15c(aXl)], in which there has been a determination that a defendant agreed to fix p r i m in violation of the Sherman Act [15 USCS $5 1 et scq.], damages may be proved and assessed in the aggregate by statistical or sampling methods, by the computation of illegal overcharges, or by such other reasonable system of estimating aggregate damages as the court in its discretion may pennit without the necessity of separately proving the individual claim of, or amount of damage to, persons on whose behalf the suit was brought. (Oct. 15, 1914, ch 323, § 4D, as added Sept. 30, 1976, P. L. 94-435, Title 111, 5 301, 90 Stat. 1395.)

HISTORY; ANCILLARY LAWS AND DIRECTIVES Other prorlsfona: Applfatioa of d o e . Act Sept. 30, 1976, P. L. 94-435, Title 111, Q 304, 90 Stat 1396, which appean as IS USCS Q I k note, provides that injuries sustained prior to Sept. 30, 1976, are not covered by this section.

CROSS REFERENCES This section is refened to in 15 USCS $5 1 Sg, 1 Sh.

RESEARCH GUIDE Feded Procedure L Ed: Evidence, Fed Proc, L Ed Q 33367.

5 1%. Distribution of damages Monetary relief recovered in an action under section 4C(aXl) [ I 5 USCS

15c(aXl)] shall- (1) be distributed in such manner as the district court in its discretion may authorize; or (2) be deemed a civil penalty by the court and deposited with the State as general revenues;

Subject in either case to the requirement that any distribution procedure adopted afford each penon a reasonable opportunity to secure his appropriate portion of the net monetary relief. (Oct. 15, 1914, ch 323, 5 4E, as added Sept. 30, 1976, P. L. 94435, Title 111, 5 301, 90 Stat. 1395.)

HISTORY; ANCILLARY JAWS AND DIRECI'MS Other provtsioas: AppUatioa of setion. Act Sept. 30, 1976, P. L. 94-435, Title 111. 8 304, 90 Stat 1396, which appears as 15 USCS 8 15c note, provides that injuries sustained prior to Sept. 30, 1976, are not covered by this section.

CROSS REFERENCES

This section is referred to in 15 USCS Q 15g. 15h.

RESEARCH GUIDE

Federrl Procedure L Ed: Evidence, Fed Proc, L Ed 33367.

$15f. Actions by Attorney General (a) Notification to State attorney general. Whenever the Attorney General of the United States has brought an action under the antitrust laws, and he has reason to believe that any State attorney general would be entitled to bring an action under this Act based substantially on the same alleged violation of the antitrust laws, he shall promptly give written notification thereof to such State attorney general.

(b) Availabuty of tiles and other materials. To assist a State attorney general in evaluating the notice or in bringing any action under this Act, the Attorney General of the United States shall, upon request by such State attorney general, make available to him, to the extent permitted by law, any investigative files or other materials which are or may tx relevant or material to the actual or potential cause of action under this Act. (Oct. 15, 1914, ch 323, 9 4F, as added Sept. 30, 1976, P. L. 94-435, Title 111, § 301, 90 Stat. 1395.)

HISTORY; ANCILLARY LAWS AND DIRECrrVES References in text: "The antitrust laws", referred to in this section, are enumerated at I5 usa g 12. "This Act", referred to in this section, is Act Oct. 15, 1914, ch 323, 38 Stat. 730, popularly known as the Clayton Act, which is generally classified as I5 USCS $8 12 et scq. For full classification of such Act, consult the USCS Tabla volumes.

Other provisions: Applicatioa of sectioa. Act Sept. 30, 1976. P. L. 94435, Title 111, 4 304, 90 Stat 1396, which appears as I5 USCS Q 15c note, provides that injuries sustained prior to Sept. 30, 1976, are not covered by this section.

CROSS REFERENCES This section is referred to in 15 USCS $9 1 5g, 1%.

RESEARCH GUIDE Federal Procedure L Ed: Evidence. Fed Proc, L Ed 33:367.

39 1

1s u s a 5 l s f COMMERCE AND TRADE

INTERPREllVE NOTES AND DECISIONS 15 USC5 1 l 5 n ) d c u not authorize Attorney other grounds 460 US 557. 75 L Ed 2d 281. 103

G d d Untted S u t a to turn over enttre S Ct 1356, 1983.1 CCH Tnde CL14 (1 65290 rnvanpuve r a d d f e d 4 mo-tnut ~d Shonng of compclhng md puttculanrcd need jury to surc attorney g e n d wbo hu not corn- 13 ncosmy for dcvlosurc of g r ~ d jury maten- phed n t b judtdydCVelopcd st.utd.rds unple- ah to sute attorney g a d unda I5 USCS rnennng Ruk He) of F e d 4 Rula of C n m d $15f(bh Conqus. nthout thoroughly deh tmg Procsdure nna (1) me =kmg ducksun u n d a tuue m d wtthout m u g spcctlk pronuon for Rule He) u n o r d y r equed to nuke shoring tt, &d aot mtmd g m d tcnntnolgy such u oT prcrml.rued need m o r d a to obmn accua "tnvanpuve bkr or 0th- mtcrds" to em- to p n d jury mvnrlr utd unda Rulc s a t e b n a y r n d jury mt&. Re G m d Jury In- a t u ~ a e y g m d unnot oblun rcceu to f e d 4 vattgabon of C u ~ w n u u Inc. (1981. C.42 Conn) gnrtd jury procedngs nthout federal coun 665 F2d 24. 1981-2 CCH Tnde Crvs 164317, approval, wtuch m o t be o b m e d merely by ccn den 460 US 1068. 75 L Ed 2d 945, 103 S 0 d e p n g Lhrt m a t h u e relevmt to mwl or 1520. p a t d a d m u - w t .ctlon. (2) 4 I5l(b)'s Req~uraen t that Untted S u t a Attorney l@bve k t o r y supporn conclulon that a n - Gentid provlde Junce Dcprnment ~nvattgrtlve pus rn@ed SCCQOU to of %- f i l s to sute Attorney G e n e d under 15 USCS cmcy &d not mtcnt to chmce apphable 8 I 5 n ) tncluda gnnd jury m a t d stncc du- bw u ~ a m r n g plnd Jury matends (3) clorure of ~nvat~gauve b la u requtred to k Clam Act's g d g d of d m n g f e d e d - made to extent pcrmttted by hw m d there w u sute cwpmtlm rad e n ~ u ~ g ~ c more sure no provuton spcc~fiully prohtbttmg d t r lo sun of lanurts a p m t pncr I x m u e not suficlent to gnnd jury matends to sute Re Montgomery show Lhrt Con- mtended 10 c h g e uu t lng County R a l t o t e Ant~tnut Lltrgat~on (1978. nrkr d law. a h t Congress' rllirmauvely ex- DC Md) 452 F Supp 54, 1978-1 CCH T d e prcmng lu mtent to do so. I h o u v Abboft & CIsa 11 62070. Asocutu. Inc. (1983) 460 US) 557, 75 L Ed 2d "Invattpttve fils or o tha matends" with111 281, 103 S CI 1356, 1983-1 CCH T n d e m a ~ g of 15 UU=S 1 I5f(b) doa not tnclude T, 652W. grand jury mrt rnak m d I5 U X S 1 1 Sf w u not

"Lnvanpuvc b l a md other materuls" under intended to repal Rule we) of F e d e d R u l a of I5 USC5 8 1 5 0 ) d a a not tnclude gnnd jury C n m ~ n d Procedure or time-honored poltcy of maends Re IU~nou P a i t ~ m to lnspcct & Copy grand jury Iccrccy Re G m d Jury etc (1978. G d Jury Mataulr (1981, CA7 111) 659 FZd MD Pa) 469 F Supp 666. 19W1 CCH T n d e (U30. 1981-2 CCH Tnde Crsa U 64284. abd on Crvs 163088

$ 1Sg. Definitions For the purposes of sections 4C, 4D, 4E, and 4F of this Act [15 USCS $5 1%. 15d, 15e, ISfl:

(I) 'The tern "State attorney general" means the chief legal officer of a State, or any other person authorized by State law to bring actions under section 4C of this Act [I5 USCS 8 15~1, and includes the Corporation Counsel of the District of Columbia, except that such t e rn does not include any person employed or retained on-

(A) a contingency fee based on a percentage of the monetary relief awarded under this section; or (B) any other contingency fee basis, unless the amount of the award of a reasonable attorney's fee to a prevailing plaintiff is determined by the court under section 4C(d)(l) [IS USCS $ 15c(d)(l)].

(2) The term "State" means a State, the District of Columbia, the Commonwealth of Pueno Rico, and any other territory or possession of the United States.

392

MONOPOLIES; RESTRAINTS OF TRADE IS USCS 8 16

(3) The term "natural persons" does not include proprietorships or partnerships.

(Oct. 15, 1914, ch 323, § 4G, as added Sept. 30, 1976, P. L. 94-435, Title 111, 8 301, 90 Stat. 1396.)

HISTORY; ANCILLARY LAWS AND DIRECnvES

Other prorisiow AppUudom of section. Act Sept. 30, 1976, P. L. 94-435, Title 111, Q 304, 90 Stat 1396, which appears as 15 USCS Q 1Sc note, provides that injuries sustained prior to Sept. 30, 1976, are not covered by this section.

CROSS REFERENCES This section is referred to in 15 USCS Q 15h.

RESEARCH GUIDE Federal Procedure L Ed. Evidence, Fed Proc, L Ed Q 33:367.

$ 1%. Applicability of parens patriae actions Sections 4C, 4D, 4 E 4F, and 4G [I5 USCS $$ 15c, l5d, 15e, l5f, l5gJ shall apply in any State, unless such State provides by law for its nonapplicability in such State. (Oct. 15, 1914, ch 323, 4H, as added Sept. 30, 1976, P. L. 94-435, Title 111, $ 301, 90 Stat. 1396.)'

HISTORY; ANCILLARY WWS AND DIRECTIVES Other provisions: Application of section. Act Sept. 30, 1976, P. L. 94-435, Title 111, 9 304, 90 Stat 1396, which appears as 15 USCS Q 15c note, provides that injuries sustained prior to Sept. 30, 1976, are not covered by this section.

RESEARCH GUIDE Fderd Procedure L Ed: Evidence, Fed Proc, L Ed Q 33:367.

1 Judgments (a) Prima facie evidence; collateral estoppel. A final judgment or decree heretofore or hereaher rendered in any civil or criminal proceeding brought by or on behalf of the United States under the antitrust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defendant in any action or proceeding brought by any other party against such defendant under said laws as to all matters respecting which said judgment or decree would be an estoppel as between

393

Elizabeth Barrett-Anderson Attomty General

Donald L Paillette Chief Deputy Attorney Central

Office of the Attorney General Territory of Guam

Honorable Don Parkinson Cha i rman Comnittee on Energy, Utilities and Consumer Protection

Twenty-First Guam Legislature P.O. Box CD-1 Agana, Guam 96910

March 27, 1991 Phone: (671) 472-68414 Telefax: (671) 472-2493

Telex: (650) 697-5352

Re: Testimony on Bill 272

Dear Senator Parkinson:

Good morning Mr. Chairman, and members of the Committee:

We appear here before you this morning to provide rather lengthy and detailed conments and amendments to Bill No. 272 which are herein enclosed as an addendum to my main testimony. I ask that my staff be allowed to sit down in greater depth with the Comnittee to iron out our detailed provision by provision concerns. I am here today to present my support for legislation that is needed on behalf of the consumers.

Bill No. 272, though not a precise nor perfect document in its present form, represents a noble attempt by this Legislature to thrust greater power into the hands of the Consumer, as we1 1 as the Attorney General's office on behalf of Guam consumers generally. It would provide for enhanced civil remedies to include injunction, temporary restraining orders, civil penalties, and monetary damages for violation of the Act. I t expands tremendously the definition of unfair and deceptive trade practices by businesses. The present bill in some respects travels a bit further than our office would suggest with respect to defined violations (please see appendix comments), i t nonethe- less encompasses so many unfair practices currently unregulated that need to be looked into by our office.

Perhaps the greatest, and yet weakest portion of the consumer chapter of Bill 272 is in the grant of consumer remedies. While we strongly support provisions allowing consumers to bring individual suits to enjoin certain acts, and to seek damages and restitution, we feel equally as strong that the Office of the Attorney General should not be empowered to represent individual -------

COMMONWEALTH NOW!

238 Archbishop F.C. Rores Stred, Suite 701 Agana, Guam USA 96910

- Testimony to Bil hlarch 27, 1991 Page 2

persons seeking redress. Bill 272 presently as drafted would provide for this. The Attorney General should not represent individual consumers and bring damage actions. This should be left to the private members of the bar. I f a private right of action is allowed under this chapter, i t should be set out in a separate sect ion. The present sect ion confuses pub1 ic act ion by the Attorney General and private actions. Those cases in which a right of private action is allowed should be specifically stated as is done in the Texas law. The Texas law allows consumers themselves to bring an action for injunctive relief, damages and attorney fees only after an offer of settlement fails. The consumer then has a cause of action for false, misleading or deceptive acts or practices that are specifically declared by the chapter to be unlawful, for breach of an express or implied warranty or for any unconscionable action or course of action.

The role of the Attorney General should be clearly defined as one which seeks broader consumer redress, beyond an individual claim. The resources of the office should not be made to compete with private representation, but should be implemented to enforce broad scale violations which must necessarily be enjoin and penalties imposed for public policy reasons. I cannot emphasize enough my firm stance concerning separation of the private right of action from the general right of action of the Attorney General. Without this clear separation I do not believe I can fully support the bill as drafted.

An equally important Chapter of Bill 272 is its anti-trust component. This version was adopted from a comprehensive criminal reform bill proposed by our office about six years ago. We support the provisions as prepared and introduced. Bill 272 would make the establishment of a monopoly a violation of the Chapter. I t would allow the Attorney General to investigate any claims of monopoly in any trade or relevant market that would tend to cause price fixing or cause there to be a lack of free competition. Any agreement to engage in a violation of the Chapter would subject the violation to treble damages. This statute would most definitely a1 low for greater monitoring and direct investigation by our office on behalf of the people of Guam,

With the above caveats, I would like to continue to work with the Corrmittee in the ,,next few days to iron out some of our differences, and to arrive at a mutually beneficial statute for Guam.

Sincerely,

L M - 6 ELIZ ETH BARRE -ANDERSON

Attorney General

1. Page 5 , lines 8 through 13. The second sentence which defines goods to include intangible goods such as stocks, bonds, securities, annuities, retirement plans and insurance policies should be omitted. Much more study should be given to the regulation of these items. A thorough study should be made of current federal regulation and other Guam laws and regulations.

Page 5 , lines 25 through 29. This section should be omitted. I t conflicts with the definitions of goods and services p.5, line 8.

2. bec con

Page 6, lines 4 through 6. This definition is not necessary, ause a "Business Consumerl1 is defined, and a llnon-business" .sumer would be anyone who does not come within the definition

of llBusiness Consumer". The effect of this definition in the act is to deny Business Consumers remedies originally intended for all consumers.

3 . Page 8, line 26, through page 9 , line 8, this section conflicts with Title 10, GCA 5540121 and 40120. Title 10 enumerates unlawful health claims about products and deems them to be false under title 10. Products cannot make claims concerning cures of certain diseases unless the product has been approved by FDA. Section 8 makes claims illegal i f they are in fact false, putting the burden of proof on the consumer and Attorney General. Also section 8 may conflict with FDA regulations and laws. This section should be amended to say "violations of the Title 10 GCA 540121 and 540120 is an unfair trade practice".

4 . Page 9, lines 22 through 31 are redundant.

On page 9, lines 32 page 10 line 2. This section is unclear. The term sale should not be used if prices are not truly reduced. I t does not matter what type of sale i t is. This section should be amended page 5 lines 11-12 Exhibit should be substitute.

5 . On page 10, lines 24 through 27. This section may conflict with tax laws. In addition, all taxes are passed on to the consumer in higher prices as a cost of doing business. This section may have an adverse affect on business on Guam. This section should be omitted.

6. Page 11, line 15 through page 12, line 23. These section may conflict with the current Insurance laws. Our office feels that

Appendix to Testimony on Bill 272 March 27, 1991 Page 2

this type of law should be a part of a separate bill which provides cornprehensive revision of insurance laws on Guam all at one time rather than a piece meal basis. This law may have an adverse effect on' insurance rates. Subsection 27, 28 and 29 should be omitted.

7, Page 14, lines 5 through 30. These sections may in part conflict with sales of goods under UCC Title 13 of the Guam Code Annotated. In addition our office feels that there should be a separate "lemon lawn for the sale of vehicles. These sections are unclear as to the effect of non-dealer sales of vehicles. Indivi- duals who sell their car should not be held to the same warranty and disclosure requirements as dealers. Subsections 34 and 35 should be omitted.

8. Page 15, lines 1 through 14. Although our office suggested these sections be included in the consumer bill, we now feel that they would more appropriately be a part of the Anti-trust sect ions.

Page 15, lines 19 through 27 may conflict with the UCC Title 13 and Bulk Sales Act. Further research is needed before Section 40 is included in the Act.

9. Page 16, lines 21 through 28, These sections should specify that the Legislature is adopting the Federal regulations currently in effect and not all future regulations or amendments. I t is an unconstitutional delegation of the Legislature's authority to adopt a1 1 future regulations promulgated by federal agencies.

Page 16, lines 29 through page 17, line 5, should be moved to the section dealing with construction of statutes 432100 p.1, line 39.

10. Page 17, lines 6 through 10. Our office feels that this section, in conjunction with other sections, extends the private cause of action too far. The power of individuals should be limited. Our office proposed a different statutory scheme for outlining the Attorney General's power and the individual powers, Sections 32107, 32109 pages 7 and 10 on the attached exhibit should be substituted for this section.

On pages 17 through page 20 (section 32109). This section should be omitted. A separate lemon law should be enacted for used vehicles, with close study being given to that particular subject. More study should be given to the warranties parts of this section in conjunction with the UCC and the comnon law on warranties. Section 32201 of the bill already makes misrepresen- tations and deceptive acts or practices illegal and this applies to warranties and the sale of vehicles, Sect ion 32201(b)(6) already makes i t i 1 legal to represent that goods are now i f they are deteriorated or used.

Appendix to Testim ny on Bill 272 March 27, 1991 6 Page 3

11. Pages 21 through 23 (section 32203). This section should be amended to allow the Attorney General, on behalf of the government of Guam, to bring an action for injunctive relief, restitution and penalties for any violations of this chapter. The Attorney General should not represent individual consumers and bring damages actions. This should be left to the private members of the bar. I f a private right of action is allowed under this chapter, i t should be set out in a separate section. The present section mixes public action by the Attorney General and private actions. In subsection (dl "the Attorney General or any erson may bring an action in the name of the government - o T -b uam Allowing a private person to bring an action on behalf of the government is undoubtedly an oversight, however the private actions and actions by the Attorney General should be in separate sections of the bill.

Those cases in which a right of private action is allowed should be specifically stated as is done in the Texas law. The Texas law allows consumers themselves to bring an action for injunctive relief, damages and attorney fees only after an offer of settlement fails. the consumer then has a cause of action for false, misleading or deceptive acts or practices that are specifically declared by the chapter to be unlawful, for breach of an express or implied warranty or for any unconscionable action or course of action. Sections 32107, 32109 pages 7 and 10 on the attached exhibit should be substituted for this section.

11. Page 25, lines 5 through 20. These sections a1 low the Attorney General to represent private parties. These sections should be omitted. As mentioned previously, the Attorney General should bring actions on behalf of the government, not private parties. I f the consumer wants damages, beyond restitution, he should bring his or her own action. The Attorney General does not want to be in the position of representing individual consumers as clients. Our office would rather represent the Territory of Guam and have the power to obtain restitution without naming individual plaintiffs. This procedure would be similar to that used by the Federal Trade Comnission, California and Texas. Restitution ,in those states is based upon evidence. Sections 32107 and 32109 pages 7 and 10 on the attached exhibit should be substituted for this section.

12. Page 26, lines 11 through 25. The last line should read "the court shall not award the two times actual damages instead of dismissing the action.

13. Page 34 lines 19 through 35, line 15. This penalty section should be incorporated into a separate section for actions by the Attorney General as discussed above. Note that subsection (a) refers to subsection (el. However there is no subsection (e).

Appendix to Testiwony on Bill 2 7 2 March 2 7 , 1991 (B Page 4

14. Page 3 8 , lines 19 through page 39, lines 1 through 9. This section does not pertain to registration procedures and should be renumbered under a separate section of Article 3.

1 5 . Page 3 9 , lines 10 through 2 2 . this section does not pertain to registration procedures and should be moved to a separate section. In addition, this section may conflict with federal securities laws and regulations as well as FTC laws and regulation. Stocks are normally sold over the phone without written contract. Usually a confirmation is made after purchase or sale. Since i t is in the consumer's best interest to sell or purchase stock quickly when the price is right, i t would be unwise to require all purchases to be in writing before they are final. This sect ion needs further research before i t is included in the bill.

On page 39, lines 2 3 through 2 8 . This section like the previous two sections does not pertain to registration and should be moved. this section conflicts with federal law on credit car purchases, specifically the regulations by FTC spell out how the consumer goes about disputing a credit card charge and when such charges can be charged back through the banking system. This section would seem to allow the consumer to refuse to pay the bank without using the procedures and time limits set forth in Federal regulations. This section is redundant because this act adopts the FTC regulations on page 16 and 2 5 . This section should be omitted.

4 0 . Pages 47 through 49 (Chapter V). This section relates to the construction of homes. I t should be put out in a separate bill. The relationship with building codes and other existing laws should be looked at carefully and specific input should be received from the construction industry as well as the Department of Public Works.

41. There are two section 3 2 5 0 2 (page 49, lines 4 through 5 and lines 3 2 through 3 5 ) . These need to be renumbered if retrieved. The first prevents waiver of warranties. This would seem to prevent a consumer from voluntarily purchasing a home in as is condition. Private individuals under this section who sell their homes would have to warrant them for the period specified. How old is a new home? It is not defined by the Act. I f you own a new home for two years and sell i t , do you have to warrant it?

The second 3 2 5 0 2 may conflict with provisions in the Civil code pertaining to warranties. This section puts the Attorney General in the position of having to police private settlements. Our office does not feel this is an appropriate duty of an Attorney General and would be an over expansion of the role of the Attorney General to police private settlements.

TWESTY - FIRST GUAV LEGISLATURE 1991 (FIRST) Regular Session

Bili No.

Introduced by:

AN ACT TO REPEAL AND REENACT TITLE 5, GUAM CODE ANNOTATED, CHAPTER 32, FOR THE PURPOSE OF STRENGTHENING THE REMEDIES AVAILABLE USDER THE CONSUMER PROTECTION LAW.

BE IT ENACTED BY THE PEOPLE OF THE TERRITORY O F GUAJI:

Section 1. Title 5, Guam Code Annotated, Chapter 32 is hereby

repealed and reenacted:

"CHAPTER 32

Subchapter I . Consumer Protection General Regulations.

Section 32100. Liberal Construction. This chapter shall be

liberally construed so that its beneficial purposes may be accomplished.

Section 32101. Short Title. This Cchapter may be cited as the

Deceptive Trade Practices-Consumer Protection A c t .

Section 32102. Waivers: Public Policy.

(a ) Any waiver by a consumer of the provisions of this

subchapter is contrary to public policy and is unenforceable and void;

provided, however, that a waiver is valid and enforceable if a

defendant in an action o r claim under this chapter pleads and proves:

(1) the consumer is not in a significantly disparate

bargaining position;

(2) the consumer is represented by legal counsel in seeking

or acquiring goods or services, other than the purchase or lease

of a family residence occupied or to be occupied as the

consumer's residence, by a purchase o r a lease for a

consideration paid or to be paid that exceeds $500,000; and

(3) the consumer waives all or par t of this subchapter,

other than Section 32113, by an express provision in a written

contract signed by both the consumer and the consumer's legal

counsel; and provided, however, that a business consumer with

assets of $5 million o r more according to the most recent financial

statement of the business consumer prepared in r .<ordance with

generally accepted accounting principles that has knowledge and

experience in financial and business matters that enable it to

evaluate the merits a n d r i sks of a transaction and that it is not

in a significantly disparate bargaining position may by written

contract waive the provisions of this subchapter, other than

Section 32113.

(b) The existence o r absence of a disparate bargaining position

may not be established a s a matter of law solely by evidence of the

financial position relative to other parties to the contract or

by matters contained in a writ ten contract relating to the relative

bargaining position of the par t ies .

Section 32103. Cumulative Remedies. The provision of this

subchapter are not exclusive. The remedies provided in this

subchapter are in addition to any other procedures o r remedies

provided for in any other law; provided, however, that no recovery

shall be permitted under both this subchapter and another law of both

actual damages and penalties for the same act or practice. A violation

of a provision of law other than this subchapter is not in and of itself

a violation of this subchapter. An act or practice that is a violation

of a provision of law other than this subchapter may be made the basis

of an action under this subchapter if the act or practice is proscribed

by a provision of this subchapter o r Is declared by such other law to

be actionable under this subchapter .

Section 32104. Construction and Application. This subchapter

shall be Liberally construed and applied to promote i ts underlying

purposes, which are to protect consumers against false, misleading,

and deceptive business practices, unconscionable actions, and breaches

of warranty and to provide efficient and economical procedures to

secure such protection.

Section 32105. Definitions.

AS used in this subchapter:

(1) "Goodsn means tangible chattels or real property

purchased or 1~ Lsed for use .

(2 ) 'Servicesn means work, labor, or service purchased o r

leased for use, including services furnished in connection with

the sale or repair of goods.

(3) "Personn means an individual, partnership, corporation,

association, or other group, however organized.

(4) "Consumern means an individual, partnership,

association, corporation, o r the government of Guam who seeks o r

acquires by purchase o r lease, any goods o r services, except

that the term does not include a business consumer that has

assets of $25 million o r more, or that is owned or controlled by a

corporation o r entity with assets of $25 million or more.

( 5 ) "Unconscionable action or course of actionn means an

act or practice which, to a person's detriment:

( A ) takes advantage of the lack of knowledge, ability,

experience, or capacity of a person to a grossly unfair

degree; or

(B) results in a gross disparity between the value

received and consideration paid, in a transaction involving

transfer of consideration.

(6) "Trade" and "commercen means the advertising, offering

for sale, sale, lease, o r distribution of any good or service, of

any property, tangible or intangible, real, personal, or mixed,

and any other article, commodity, o r thing of value, wherever

situated, and shall include any trade o r commerce directly or

indirectly affecting the people of the Territory of Guam.

(7) "Documentary materialn includes the original or a copy

of any book, record, report , memorandum, paper, communication,

tabulation, map, chart , photograph, mechanical transcription, o r

other tangible document o r recording, wherever situated.

(8) "~nowingly" means actual awareness of the falsity,

deception, or unfairness of the act or practice giving rise to the

consumer's claim or , in an action brought under Subdivision ( 2 )

of Subsection (a) of Section 32109, actual awareness of the act or

practice constituting the breach of warranty, bu t actual

awareness may be inferred where objective manifestations indicate

that a person acted with actual awareness.

(9) "Business consumern means an individual, partnership

or corporation who seeks o r acquires by purchase or lease, any

goods or services for commercial o r business use. The term does

not include the government of Guam.

Section 32106. Deceptive Trade Practices Unlawful.

(a) False, misleading, o r deceptive acts o r practices in the

of any trade or commerce are hereby declared unlawful and

are subject to action by the Attorney General under Sections 32107,

32115, 32117 and 32118.

(b) Except as provided in Subsection (d) of this section, the

term "false, misleading, or deceptive acts o r practices" includes, but

is not Limited to, the follow acts:

(1) passing off gmds or services as those of another;

(2) causing confusion or misunderstanding a s to the source,

sponsorship, approval, o r certification of goods o r services;

(3) causing confusion or misunderstanding a s to affiliation,

connection, or association with, or certification by , another;

(4) using deceptive representations o r designations of

geographic origin Ln connection with goods o r services;

(5) representing that goods o r services have sponsorship,

approval, characteristics, ingredients, uses, benefits, or

quantities which they do not have or that a person has a

sponsorship, approval, s ta tus , affiliation, o r connection which he

does not;

(6) representing that goods are original o r new if they are

deteriorated, reconditioned, reclaimed, used, or secondhand ;

(7) representing that goods or services are of a particular

standard, quality, or grade, o r that goods are of a particular

style or mode, if they are of another;

(8) disparaging the goods, services, or business of another

by false o r misleading representation of facts;

(9) advertising goods or services with intent not to sell

them as advertised;

(10) advertising goods or services with intent not to supply

a reasonable expectable public demand, unless the advertisements

disclosed a limitation of quantity;

(11) making false or misleading statements of fact concerning

the reasons for , existence of, or amount of price reductions;

(12) representing that an agreement confers o r involves

rights, remedies, o r obligations which it does not have o r

involve, or which are prohibited by law;

(13) knowingly making false or misleading statements of fact

concerning the need for par ts , replacement, or repair service;

(14) misrepresenting the authority of salesman,

representative or agent to negotiate the final terms of a consumer

transaction;

(15) basing a charge for the repair of any item in whole or

in part on a guaranty or warranty instead of on the value of the

actual repairs made or work to be performed on the item without

stating separately the charges for the work and the charge for

the warranty o r guaranty, if any;

(16) disconnecting, turning back, or resetting the odometer

of any motor vehicle so as to reduce the number of miles

indicated on the odometer gauge;

(17) advertising of any sale by fraudulently representing

that a person is golng out oE business;

(18) using o r employing a chain referral sales plan in

connection with the sale or offer to sell of goods, merchandise, or

anything of value, which uses the sales technique, plan,

arrangement, or agreement in which the buyer o r prospective

buyer is offered the opportunity to purchase merchandise o r

goods and in connection with the purchase receives the seller's

promise or representation tha t the buyer shall have the right to

receive compensation o r consideration in .,ty form for furnishing

to the seller the names of other prospective buyers if receipt of

the compensation or consideration is contingent upon the

occurrence of an event subsequent to the time the buyer

purchases the merchandise o r goods;

(19) representing tha t a guarantee or warranty confers or

involves rights o r remedies which it does not have or involve

provided, however, that nothing in this subchapter shall be

construed to expand the implied warranty of merchantability a s

defined in Sections 2314 through 2318 of Title 13 of the Guam

Code Annotated to involve obligations in excess of those which

are appropriate to the goods;

(20) selling or offering to sell, either directly or associated

with the sale of goods o r services, a right of participation in a

multi-level distr ibutorship. As used herein, "multi-level

distributorshipn means a sales plan for the distribution of goods

or services in which promises of rebate or payment are made to

individuals, conditioned upon those individuals recommending or

securing additional individuals to assume positions in the sales

operation, and where the rebate or payment is not exclusively

conditioned on o r in relation to proceeds from the retail sales of

goods ; (21) representing tha t work or services have been performed

on, or parts replaced in, goods when the work or services were

not performed o r the par t s replaced;

(22) the failure to disclose information concerning goods or

services which was known a t the time of the transaction if such

failure to disclose such information was intended to induce the

consumer into a transaction into which the consumer would not

have entered had the information been disclosed; or

(23) using the term "corporation, " "incorporated, " or an

abbreviation of either of those terms in the name of a business

enti ty that is not incorporated unde r the laws of the territory of

Guam c . another jurisdiction.

(24 ) Selling any article o r product at less than the cost

thereof, to a Business Consumer o r t o give away any article or

product, for the purpose of injuring competitors or destroying

competition.

(25) Secretly paying o r allowing rebates, refunds,

commissions, or unearned discounts, whether in the form of

money or otherwise, or secretly extending to certain Business

Consumers special services o r privilege not extended to all

Business Consumers purchasing upon Like terms and conditions,

to the injury of a competitor and where such payment or

allowance tends to destroy competition, is unlawful.

( c ) ( l ) It is the intent of the legislature that in

construing Subsection (a) of this section in suits brought under

Section 32107 of this subchapter the courts to the egtent possible cr" wil l be guided by Subsection (b) of th i s section the 1\

1/ interpretations given by the Federal Trade Commission and federal

courts to Section 5 (a ) ( l ) of the Federal Trade Commission Act [15

U . S . C . A . 45(a) ( l ) ] .

( 2 ) In construing this subchapter the court shall not be

prohibited from considering relevant and pertinent decisions of

courts in other jurisdictions.

(d) For the purposes of the rel3ef authorized in Subdivision (1)

of Subsection (a) of Section 32109 of this subchapter, the term "false,

misleading, or deceptive acts o r practicesn i s M t e d to the acts

enumerated in specific subdivisions of Subsection (b) of this section.

Section 32107. Restraining Orders.

(a) Whenever the Attorney General has reason to belleve that

any person is engaging in, has engaged in, or I s about to engage in

any act or practice declared to be unlawful by this subchapter, and

that proceedings would be in the public interest , the Attorney General

may bring an action in the name of the government of Guam against

the person, to res t ra in by temporary restraining o rde r , temporary

kjunction, or permanent injunction the use of such method, act, or

practice.

Nothing herein shall require the Attorney General to notify such

person that court action is or may be under consideration. Provided,

however, the Attorney General shall, at least seven d a y s prior to

hstj tuting such c o u r t action, contact such person to inform him in

general of the alleged unlawful conduct. Cessation of unlawful conduct

after such prior contact shall not render such court action moot under

any circumstances, a n d such injunctive relief shall lie even if such

person has ceased such unlawful conduct after such prior contact.

such prior contact shall not be required i f , in the opinion of the

Attorney General, t he re is good cause to believe that such person

would evade services of process if prior contact were made or that

such person would destroy relevant records if prior contact were

made, or that such a n emergency exists that immediate and irreparable

injury, loss, or damage would occur as a result of such delay in

obtaining a temporary restraining order.

(b) The cour t may issue temporary restraining orders , temporary

or permanent injunctions to restrain and prevent violations of this

subchapter and such injunctive relief shall be issued without bond.

(c) in addition t o the request for a temporary restraining order,

or permanent injunction in a proceeding brought under Subsection (a)

of this section, t he Attorney General may request a <civil penalty of

not more than $5,000 p e r violation.

(d) The cour t may make such additional orders o r judgments as

are necessary to canpensate identif fable persons for actual damages o r

to restore money or proper ty , real or personal, which may have been

acquired b y means of any unlawful act or practice. Damages may not

include any damages incurred beyond a point two years prior to the

institution of the action by the Attorney General. Orders of the court

may also include the appointment of a receiver o r a sequestration of

assets if a person who has been ordered by a court to make restitution

under this section has failed to do so within three months after the

order to pake restitution has become final and nonappealable.

(e) Any person who violates the terms of an lnfunction under

this section shall forfeit and pay to the government of Guam a civ .

penalty of not more than $10,000 per violation. In determining

whether or not an injunction has been violated the court shall take

into consideration the maintenance of procedures reasonably adapted to

insure compliance with the injunction. For the purposes of this

section, the court issuing the injunction shall retain jurisdiction, and

the cause shall be continued, a n d in these cases, the Attorney

General, acting in the name of the territory of Guam, may petition for

recovery of civil penalties unde r this section.

( f ) An order of the cour t awarding civil penalties under

(e) of this section applies only to violations of the

injunction incurred prior t o the awarding of the penalty order.

Second or subsequent violations of an injunction issued under this

section are subject to the same penalties set out in Subsection (e) of

this section.

(g) All actions brought b y the Attorney General under this Act

shall be tried by the court without a jury.

Section 32108. Exemptions.

(a) Nothing in this subchapter shall apply to the owner or

employees of a regularly published newspaper, magazine, or telephone

directory, or broadcast stat ion, o r billboard, wherein in any

advertisement in violation of th i s subchapter is published or

disseminated, unless it is established that the owner o r employees of

the advertising medium have knowledge of the false, deceptive, o r

misleading acts or practices declared to be unlawful by this

subchapter, or had a direct o r substantial financial interest in the sale

or distribution of the unlawfully advertised good o r service. Financial

interest as used in this section relates to an expectation which would

be the direct result of such advertisement.

(b) Nothing in this subchapter shall apply to acts or practices

authorized under specific rules o r regulations promulgated by the

F,?deral Trade Commission under Section 5(a) (1) of the Federal Trade

Commission Act (15 U .S . C.A. 45(a) (1) 1 . The provisions of this

subchapter do apply to any act or practice prohibited or not

authorized by a rule oL regulation of the Federal Trade

Commjssion. An act or practice is not specifically authorized if no

rule o r regulation has been issued on the act o r practice.

Sectfon 32109. Relief for Consumers.

(a) A consumer may maintain an action where any of the

following constitute a producing cause of actual damages:

(1) the use or employment b y any person of a false,

misleading, or deceptive act or practice that is specifically

enumerated in a subdivision of Subsection (b ) of Section 32106 of

this subchapter;

(2) b each of an express o r implied warranty; or

any unconscionable action o r course of action by any / person;

(b) In a suit filed under this section, each consumer who

prevails may obtain:

(1) the amount of actual damages found by the tr ier of

fact . In addition the court shall award two times that portion of

the actual damages that does not exceed $1,000. If the tr ier of

fact finds that the conduct of the defendant was committed

knowingly, the tr ier of fact may award not more than three times

the amount of actual damages in excess of $1,000, provided that:

(A) the provisions of Civil Code shall govern the

determination of the consumer's right under this subchapter

to recover actual and other damages, including exemplary

damages, and the amount of those damages that may be

recovered by the consumer under this subchapter, in an

action seeking damages for (i) death; (ii) personal injury;

or (iii) damage to property other than the goods acquired by

the purchase o r lease that is involved in the consumer's

action or claim if that damage arises out of an occurrence

that involves death or bodily injury; and

( B ) only in a n action under this subchapter that is

subject to Paragraph ( A ) of this subdlvision, the consumer's

right to recover damages shall be subject to any defense o r

defensive matter tha t could be considered by the tr ier of

fact in an action subject t o Sections 1714 and 1714.1 of the

Civil Code, in determining the percentage of responsibility

attributable to the consumer claimant under that Chapter;

( 2 ) an order enjoining such acts or failure to act;

(3) orders necessary to restore to any par ty to the suit

any money or property, real o r personal, which may have been

acquired in violation of this subchapter; and

( 4 ) any other relief which the court deems proper,

including the appointment of a receiver or the revocating of a

license or certificate authorizing a person to engage in business

in the Territory of Guam if the judgment has not been satisfied

within three months of the date of the final judgment. The court

may not revoke or suspend a license to do business in the

territory of Guam o r appoint a receiver to take over the affairs of

a person who has failed to satisfy a judgment if the person is a

licensee of or regulated by an agency or board o r other entity of

the government of Guam which has statutory authority to revoke

or suspend a license o r to appoint a receiver or trustee. Costs

and fees of such receivership o r other relief shall be assessed

against the defendant.

(c) On a finding b y the court that an action under this section

was groundless and brought in bad faith, or brought for the purpose

of harassment, the court shall award to the defendant reasonable and

necessary attorneys' fees and court costs.

(d) Each consumer who prevails shall be awarded court costs and

reasonable and necessary attorneys' fees.

Sectfon 32110. Notice: Offer of Settlement.

(a) As a prerequisite t o filing a suit seeking damages under

Subdivision (1) of Subsection (b) of Section 32109 of this subchapter

against any person, a consumer shall give written notice to the person

at least 60 days before filing the suit advising the person, in

reasonable detail, of the consumer's specific complaint and the amount

of actual damages and expenses, including attorneys' fees, if any ,

reasonably incurred by the consumer in assert ing the claim against the

defendant. During the 60-day period a written request to inspect, in

a reasonable manner and a t a reasonable time and place, the goods

that are the subject of the consumer's action o r claim may be

presented to the consumer. If the consumer unreasonably refuses to

permit the inspection, the court shall not award the two times actual

damages not exceeding $1,000, as provided in Subsection (b) of

Section 32109 of this subchapter.

(b) If the giving of 60 days' written notice is rendered

impracticable by reason of the necessity of filing suit in order to

prevent the expiration of the statute of limitations or if the consumer's

claim is asserted by way of counterclaim, the notice provided f o r in

Subsection (a) of this section is not required, but the tender provided

for by Subsection (c) of this section and by Subsection ( d ) , Section

32111 of this subchapter may be made within 60 days after the filing of

the suit or counterclaim.

(c) Any person who receives the written notice provided b y

Subsection (a) of this section may, within 60 days after the receipt of

the notice, tender to the consumer a k-ritten offer of settlement,

including an agreement to reimburse the consumer for the attorneys'

fees, if any reasonably incurred by the consumer in asserting his

claim up to the date of the written notice. A person who does not

receive such a written notice due to the consumer's suit o r counter

claim being filed as provided for by Subsection (b) of this section

may, within 60 days a f te r the filing of such suit o r counterclaim,

tender to the consumer a written offer of settlement, including an

agreement to reimburse the consumer for the attorneys' fees, if any ,

reasonably incurred by the consumer in assert ing his c l a h up to the

date the sult o r counterclahn was filed. Any offer of settlement not

accepted within 30 days of receipt by the consumer shall be deemed to

have been rejected by the consumer.

( d ) A settlement of fe r made in compliance with Subsection (c) of

this section, if rejected by the consumer, may be filed with the court

together with an affidavit certifying its rejection. If the amount

tendered in the settlement offer is the same as o r more thz ., or if the

court finds that amount to be substantially the same a s , the actual

damages found by the t r ier of fac t , the consumer may not recover an

amount in excess of the amount tendered in the settlement offer or the

amount of actual damages found by the tr ier of fact , whichever is

less. Such settlement of fe r shall not be admissible as evidence before

a jury.

(e) The tender of an offer of settlement is not an admission of

engaging in an unlawful act or practice or of Liability under this Act.

Evidence of a settlement offer may be introduced only to determine the

of the settlement offer as provided for by Subsection

(d ) of this section.

Section 32111. Damages: Defenses.

(a) In an action brought under Section 32109 of this subchapter,

it is a defense to the award of any damages or attorneys' fees if the

defendant proves that before consummation of the transaction he gave

reasonable and timely written notice to the plaintiff of the defendant's

reliance on:

(1) written information relating to the particular goods or

service in question obtained from official government records if

the written information was false o r inaccurate and the defendant

did not know and could not reasonably have known of the falsity

or inaccuracy of the Information;

(2) written information relating to the particular goods or

service in question obtained from another source if the

information was false or inaccurate and the defendant did not

know and could not reasonably have known of the falsity or

inaccuracy of the information; or

(3) written information concerning a tes t required or

prescribed by a government agency if the information from the

test was false or inaccurate and the defendant did not know and

could not reasonably have known of the falsity or inaccuracy of

the information.

(b) In asserting a defense under Subdivision ( I ) , (2) , or (3) of

Subsection (a) of Section 32111 above, the defendant shall prove the

written information was a producing cause of the alleged damage. A

finding of one producing cause does not bar recovery if other conduct

of the defendant not the subject of a defensive finding under

Subdivision ( I ) , (2), o r (3) of Subsection (a) of Section 32111 above

was a producing cause of damages of the plaintiff.

(c) In a suit where a defense is asserted under Subdivision (2 )

of Subsection (a) of Section 32111 above, suit may be asserted against

the third par ty supplying the written information without regard to

privity where the third par ty knew or should have reasonably foreseen

that the information would be provided to a consumer; provided no

double recovery may resul t .

( d ) In an action brought under Section 32109 of this subchapter,

it is a defense to a cause of action if the defendant proves that he

received notice from the consumer advising the defendant of the nature

of the consumer's specific complaint and of the amount of actual

damages and expenses, including attorneys' fees, if any , reasonably

incurred by the consumer in asserting the claim against the defendant,

and that within 30 days a f t e r the day on which the defendant received

the notice the defendant tendered to the consumer:

(1) the amount of actual damages claimed; and

( 2 ) the expenses, including attorneys' fees, if any,

reasonably incurred by the consumer in assert ing the claim

against the defendant.

Section 32112. Promotional Material.

If damages or civil penalties are assessed against t he seller of

goods or services for advertisements or promotional material in a suit

filed under Sections 32107 and 32109 of this subchapter, the seller of

the goods o r services has a cause of action against a third party for

the amount of damages o r civil penalties assessed against the seller

plus attorneys' fees on a showing that:

(1) the seller received the advertisements or promotional

material from the third p a r t y ;

( 2 ) the seller's only action with regard to the

advertisements or promotional materials was to .sseminate the

material; and

(3) the seller has ceased disseminating the material,

Section 32113. Indemnity.

A person against whom a n action has been brought under this

subchapter may seek contribution o r indemnity from one who, under

the statute law or at common law, may have liability for the damaging

event of which the consumer complains. A person seeking indemnity

as by this section may recover all sums that he is required

to pay as a result of the action, his attorney's fees reasonable in

relation to the amount of work performed in maintaining his action fo r

indemnity, and his costs.

Section 32114. Limitation.

All actions brought unde r this subchapter must be commenced

within two years after the da te on which the false, misleading, o r

deceptive act o r practice occurred o r within two years after the

consumer discovered or in t he exercise of reasonable diligence should

'have discovered the occurrence of the false, misleading, or deceptive

act or practice.

The period of limitation provided in this section may be extended

for a period of 180 days if the plaintiff proves that failure timely to

commence the action was caused b y the defendant's knowingly engaging

in conduct solely calculated t o induce the plaintiff to refrain from o r

postpone the commencement of the action.

Section 32115. Voluntary Compliance.

(a) In the administration of this subchapter the Attorney General

may accept assurance of voluntary compliance with respect to any act

or practice which violates this subchapter from any person who is

engaging in, has engaged in, o r i s about to engage in the act o r

practice. The assurance shall be in writing and shall be filed with

and subject to the approval of the court .

( b ) The acceptance of an assurance of voluntary compliance may

be condi t i~ned on the stipulation that the person in violation of this

=ubchapter restore to any person in interest any money or property,

real or personal, w. lch may have been acquired by means of acts or

practices which violate this subchapter.

(c) A n assurance of voluntary compliance shall not be considered

an admission of prior violation of this subchapter . However, unless an

assurance has been rescinded by agreement of the parties or voided

by a court for good cause, subsequent failure to comply with the

terms of an assurance is prima facie evidence of a violation of this

subchapter.

( d ) Matters closed by the filing of an assurance of voluntary

compliance may be reopened a t any t h e . Assurances of voluntary

compliance shall in no way affect individual r ights of action under this

subchapter, except that the rights of individuals with regard to money

o r property received pursuant to a stipulation in the voluntary

compliance under Subsection (b) of this section a re governed by the

terms of the voluntary compliance.

Section 32116. Post Judgment Relief.

(a) If a money judgement entered under this subchapter is

unsatisfied 30 days af ter it becomes final and if the prevailing party

has made a good faith attempt to obtain satisfaction of the judgment,

the following presumptions exist with respect to the party against

whom the judgment was entered:

(1) that the defendant is insolvent o r in danger of

becoming insolvent; and

(2) that the defendant's property is h danger of being

lost, removed, o r otherwise exempted form collection on the

judgement; and

(3) that the prevailing par ty will be materially injured

unless a receiver is appointed over the defendant's business; and

(4) that there is no adequate remedy other than

receivership available to the prevailing par ty .

(b) Subject to the pl*ovisions of Subsection (a ) of this section, a

prevailing par ty may move that the defendant should show cause why a

receiver should not be appointed. Upon adequate notice and hearing,

the court shall appoint a receiver over the defendant's business unless

the defendant proves that all of the presumptions set forth in

Subsection (a) of this section a re not applicable.

(c) The order appointing a receiver must clearly state whether

the receiver will have general power to manage and operate the

defendant's business or have power to manage only a defendant's

finances. The order shall limit the duration of the receivership to

such time as the judgment or judgments awarded under this subchapter

are paid in full. Where there a re judgments against a defendant which

have been awarded to more than one plaintiff, the court shall have

discretion to take any action necessary to efficiently operate a

in order to accomplish the purpose of collecting the

judgments.

Section 32117. Reports and Examinations.

Whenever the Attorney General has reason to believe that a

person is engaging in, has engaged in, or is about to engage in any

act or practice declared to be unlawful by this subchapter, or when

the Attorney General reasonably believes it to be in the public interest

to conduct an investigation to ascertain whether any person is

engaging in, has engaged in, o r is about to engage in any such act or

practice, an authorized member of the Attorney General's Office may:

(1) require the person to file on the prescribed forms s

statement o r report in writing, under oath or otherwise, as to all

the facts and circumstances concernhg the alleged violation and

such other data and information as the Attorney General deems

necessary ;

(2) examine under oath any person in connection with this

alleged violation ;

(3 ) examine any merchandise or sample of merchandise

deemed necessary and proper; and

(4 ) pursuant to a n order of the appropriate court, impound

any sample of merchandise that is produced in accordance with

this subchapter and retain it in the possession of the Attorney

General until the completion of all proceedings in connection with

which the merchandise is produced.

Section 32118. Civil Investigative Demand.

(a) Whenever the Attorney General believes that any person may

be in possession, custody, o r control of the original copy of any

documentary material relevant to the subject matter of an investigation

of a possible violation of this subchapter, an authorized agent of the

Attorney General may esecute in writing and serve on the person a

civil investigative demand requiring the person to produce the

documentary material and permit inspection and copying.

(b) Each demand shall:

(1) state the s ta tute and section under which the alleged

violation is being investigated, and the general subject matter of

the investigation;

( 2 ) describe the class o r classes of documentary material to

be produced with reasonable specificity so as to fairly indicate

the material demanded ;

(3) prescribe a r e tu rn date within which the documentary

material is to be produced; and

( 4 ) identify the authorized agent or agents of the Attorney

General's Office to whom the documentary material is to be made

available for inspection and copying.

(c) A civil investigative demand may contain a requirement or

djsclosure of documentary material which would be discoverable under

the Rules of Civil Procedure.

(d) Service of any demand may be made by:

(1) delivering a duly executed copy of the demand to the

person to be served o r t o a partner or to any officer or agent

authorized by appointment o r by law to receive service of process

on behalf of that person;

(2 ) delivering a duly executed copy of the demand to the

principal place of business of the person to be served;

(3) mailing by registered mail or certified mail a duly

executed copy of the demand addressed to the r: ,.son to be

served at the principal place of business or if the person has no

place of business, to his principal office or place of business.

(e) Documentary material demanded pursuant to this section shall

be produce for inspection and copying during normal business hours a t

the principal office or place of business of the person served, o r a t

other times and places as may be agreed on by the person served and

the Attorney General.

( f ) No documentary material produced pursuant to a demand

under this section, unless otherwise ordered by a court for a good

cause shown, shall be produced for inspection or copying by, nor

shall its contents be disclosed to any person other than the authorized

employee of the Attorney General's Office without the consent of the

person who produced the material. The Attorney General shall

prescribe reasonable terms and conditions allowing the documentary

material to be available for inspection and copying by the person who

produced the material or any duly authorized representative of that

person. The Attorney General may use the documentary material or

copies of it a s it determines necessary in the enforcement of this

subchapter, including presentation before any court. Any material

which contains trade secrets shall not be presented except with the

approval of the court in which the action is pending after adequate

notice to the person furnishing the material.

(g) A t any time before the r e tu rn date specified in the demand,

o r within 20 days af ter the demand has been served, whichever period

is shorter, a petition to extend the re turn date for, or to modify o r

set aside the demand, stating good cause, may be filed in court.

(h) A person on whom a demand is served under this section

shall comply with the terms of the demand unless otherwise provided

by a court order.

(i) Service of a similar investigative demand under this section

may be made on any person outside the Territory of Guam if the

person has engaged in conduct in violation of this subchapter. Such

persons shall be deemed to have submitted themselves to the

jurisdiction of the Terri tory of Guam within the meaning of this

section.

Section 321 19. Penalties.

(a) Any person who, with intent to avoid, evade or prevent

compliance, in whole o r in part , with Section 32117 o r 32118 of this

subchapter, removes from any place, conceals, withholds, or destroys,

mutilates, al ters, or by any other means falsifies any documentary

material or merchandise or sample of merchandise is guilty of a

misdemeanor and on conviction is punishable by a fine of not more

than $5,000 o r by confinement in the county jail for not more than one

year, or both.

(b) If a person fails to comply with a directive of the Attorney

General under Section 32117 of this subchapter o r with a civil

investigative demand for documentary material served on him under

Section 32118 of this subchapter, or if satisfactory copying or

reproduction of the material cannot be done and the person refuses to

surrender the material, the Attorney General may file in a petition for

an order of the court for enforcement of Sections 32117 and 32118 of

this subchapter.

(c) When a petition is filed, the court shall have jurisdiction to

hear and determine the matter presented and to en te r any order

requked to carry into effect the provisions of Sections 32117 and 32118

of this subchapter. Failure to comply with any final order entered

under this section is punishable by contempt.

Sectlon 32120. Application.

The provisions of this subchapter apply only to acts or practices

occurring af ter the effective date of this subchapter.

Sectlon 32121. Severability . If any of the provisions of this Act or the application thereof to

any person o r circumstance, is held invalid, such invalidity shall not

affect any other provision o r appbcation of this Act which can be

given effect without the invalid provision or application, and to this

end the provisions of th i s Act a r e severable.

Section 32122. Consumer Protection Ft .,d.

(a) There is hereby established a fund to be known as the

Consumer Protection Fund which shall be maintained separate and apart

from any other funds of the government of Guam and independent

records and accounts shall be maintained in connection therewith. AL1

civil penalties collected by the government of Guam under this Chapter

shall be deposited in said Fund.

(b) The Consumer Protection Fund shall be used exclusively for

the the purpose of the administration of Chapters 31 and 32 of Title 5

of the Guam Code Annotated. Said Fund shall be examined and

reported upon by the Director of Administration as required by law."

Section 2 . Section 31107 of Chapter 31, Title 5 of The Guam Code

Annotated is repealed.

Subchapter 11. Restraint of Trade.

532201. Trusts , e t c . , in restraint of trade illegal; penalty.

Every contract, combination in the form of t rus t o r otherwise, or

conspiracy, in restraint of t rade is declared to be illegal. Every

person who shall make any contract or engage in any combination or

conspiracy hereby declared to be illegal shall be deemed guilty of a

felony of the f i rs t degree.

832202. Actions For Violations.

(a) A violation of Section 32201 is a deceptive trade practice

under Section 32106(a) . (b) The Attorney General may bring an action for a violation of

Section 32201 as provided in Section 32107.

(c) Any person, par tnership, corporation or association may

bring an action for a violation of Section 32201 a s provided in Section

32 109.

Subchapter- 11. Telemarketing and Telephonic Sales.

$32301. Definitjons.

(a) The term "telemarketing" means a plan, program, or cam-

paign to induce the purchases of goods, servi es, or investment

by means of telephone calls bu t does not include any

transaction in which there has been any personal meeting or discussion

concerning the transaction between the seller of the goods, services,

o r investment opportunities (or the seller's agent) and the intended

purchaser (or the purchaser's agent) before the consummation of the

sale. n (b) A "telephonic sellern o r sellern a s used in this subchapter

means person, association, parternship, firm, corporation or other

business entity that engages in telemarketing.

032302. Registration Procedures.

(a) Xot less than 10 days prior to doing business in the Ter-

ritory of Guam a telephonic seller shall register by filing with the

Attorney General's office the information required by Section 32303 and

paying a filing fee of Fifty Dollars ($50.00). A seller shall be deemed

to do business in the Terri tory of Guam if the seller solicits pros-

pective purchasers from locations in this Terri tory of Guam or solicits

prospective purchasers who are located in the Territory of Guam.

The information required by Section 32303 shall be submitted on a

form provided by the Attorney General and shall be verified by a

declaration signed by each principal of the telephonic seller under

penalty of perjury. The declaration shall specify the date and location

of signing. Information submitted pursuant t o subdivision (i) or ( j ) of

Section 32303 shall be clearly identified and appended to the filing.

The information submitted pursuant to Section 32303 shall become part

of the investigatory records and intelligence information compiled by

the department for law enforcement purposes.

(b) Registration of a telephonic seller shall be valid for one year

from the effective date thereof and may be annually renewed by making

the filing required by Section 32303 and paying a filing fee of Fifty

Dollars ($50.00) .

(c) Whenever, prior to expiration of a seller's annual registra-

tion, there is a material change in the information required by Section

, the seller shall, within 10 days, file an addendum updating the

information w. .il the Attorney General's Office. However, changes in

salespersons soliciting on behalf of a seller shall be updated by

addendum filed, if necessary, in quarterly intervals computed from the

effective date of registration. The addendum shall provide the

required information for all salespersons who are currently soliciting or

have solicited on behalf of the seller at any time during the period

between the filing of the registration, or the last addendum, and the

current addendum, and shall include salespersons no longer soliciting

for the seller as of the date of the filing of the current addendum.

( d ) Upon receipt of a filing and filing fee pursuant to sub-

division (a ) o r ( b ) , the Attorney General's Office shall send the

telephonic seller a written confirmation of receipt of the filing. If the

seller has more than one business location, the written confirmation

shall be sent to the principal business location identified in the seller's

filing . (e) Each telephonic seller must provide a bond in the amount of

Fifty Thousand Dollars ($50,000.00) to cover consumer claims. A copy of the bond shall be filed with the Attorney General's Office with the

Registration form required by Sections 32302 and 32303.

832303. FWng Information.

Each filing pursuant to Section 32202 shall contain the following

information :

(a) The name o r names of the seller, including the name under

which the seller is doing o r intends to do business, if different f m

the name of the seller, and the name of any parent o r affiliated organ-

ization (1) that will engage in business transactions with purchasers

relating to sales solicited b y the seller or (2) that accepts res-

ponsibility for statements made by, or acts of, the seller relating to

sales solicited by the seller.

(b) The seller's business forin and place of organiz~tion and , if

the seller is a corporation, a copy of its articles of incorporation and

bylaws and amendments thereto, o r , if a partnership, a copy of the

partnership agreement, o r if operating under a fictitious business

name, the location where the fictitious name has been registered.

the same information shall be included by any parent or affiliated

disclosed pursuant to subdivision (a ) .

(c) The complete s t ree t address o r addresses of all locations,

designating the principal location from which the telephonic seller will

be conducting business. If the principal business location of the

seller is not in the Terr i tory of Guam, then the seller shall also

designate a statutory agent within the Territory of Guam who i s

authorized to accept service of process.

(d ) A listing of all telephone numbers to be used by the seller

and the address where each telephone using each of these telephone

numbers is located.

(e) The name of , and the off ice held by, the seller's officers,

directors, trustees, general and limited partners, sole proprietor, and

owners, as the case may be, and the names of those persons who have

rnanagernent responsibilities in connection with the seller's business

activities.

( f ) The complete address of the principal residence, the date of

birth, and the driver's license number and state of issuance of each of

the person whose names a r e disclosed pursuant to subdivision (e ) .

(g) A statement, meeting the requirements of this subdivision,

as to both the seller, whether a corporation, partnership, firm, as-

sociation, joint venture, o r any other type of business entity (and

whether identified pursuant to subdivision (e) or not, and as t o any

person identified pursuant to subdivision (e) who:

(1) Has been convicted of a felony or misdemeanor. For

the purposes of this paragraph, a plea of nolo contendere is a

conviction.

( 2 ) Has a t any time during the past seven years filed in

bankruptcy or been adjudged a bankrupt .

(3) For purposes of paragraphs (1) and (2) above, the

statement shall identify the seller o r person, the court rendering

the conviction or judgment, and the docket number and date of

the conviction or judgment.

(h) A list of the names and principal residence addresses of

salespersons who solicit on behalf of the telephonic seller and the

names the salespersons use while so soliciting.

(i) A description of the Items the seller is offering for sale and

a copy of all sales scripts the telephonic seller requires salespersons

to use when soliciting prospective purchasers, o r if no sales script is

required to be used, a statement to that effect .

( j ) A copy of all sales information and Literature (including, but

not limited to, scripts, outlines, instructions, and information

regarding how to conduct telephonic sales, sample introductions , sample closings, product information, and contest o r premium-award

information) provided by the telephonic seller to salespersons or of

which the seiler informs salespersons, and a copy of all written

materials the seller sends to any prospective o r actual purchaser.

(k) If the telephonic seller represents o r implies, or directs

salespersons to represent o r imply, to purchasers that the purchaser

will receive certaln specific items (including a certificate of any type

which the purchaser must redeem to obtain the item described in the

certificate) or one o r more items from among deslgnated items, whether

the items are denominated as gifts, premiums, bonuses, prizes, or

otherwise, the filing shall include the following:

(1) A Ust of the items offered.

( 2 ) The value o r worth of each item described to pros-

pective purchasers and the basis for the valuation.

(3 ) The price paid b y the telephonic seller to its supplier

for each of these items and the name, address , and telephone

number of each item's supplier.

that long, during the period the telephonic seller has been in

business) received the item having the greatest value and the

item with the smallest odds of being received.

$32304. Violatior riemedies.

The Attorney General on behalf of the government of Cuam may

b r b g an action against any person, firm, corporation, partnership or

association, or officer o r owner of any corporation who fails to comply

with the registration requirements of this subchapter for a civil

penalty of not more than $5,000 per violation and for a temporary

restraining order and a temporary and permanent injunction to enjoin

the telemarketing activities in the Territory of Cuam of violator. Any penalty collected shall be paid into the Consumer Protection Fund.

Subchapter IV. Prizes and Gifts.

$32401. Prize o r gift offer; disclosure of intent to make sales

presentation; good faith broadcasts or publications; applicability of

section.

(a) It is unlawful for any person to offer, by mail, by tele-

phone, in person or by any other means or in any other form, a prize

or gift, with the intent to offer a sales presentation, without dis-

closing at the time of the offer of the prize or gift, in a clear and

unequivocal manner, the intent of offer such sales presentation.

(b) This section shall not apply to the publisher of any newspaper, periodical, or other publication, or any radio or television

broadcaster, or the owner o r operator of any cable, satellite, o r other

medium of communfcations who broadcasts o r publishes an advertise-

ment or offer In good faith, without knowledge of i ts violation of

subdivision (a).

(c) Violation of this subchapter shall be deemed a deceptive

trade practices pursuant to $32106(a) and is subject to action by the

Attorney General under Section 32107.

$32402. Unlawful advertising; conditional offer of prizes o r gifts.

(a) It is unlawful for any person to use the term "prize" o r

or other sfmllar term In any manner that would be untrue o r

misleading, including, but not limited to, the manner made unlawful in

subdivision (b) or ( c ) .

(ti) It is unlawful to notify any person by any means, as a par t

of an advertising plan o r program, that he or she has won a prize and

that as a condition of receiving such prize he or she must pay any

money or purchase or r en t any goods or services.

(c) It is unlawful to notify any person by any means that he o r

she will receive a gift and that as a condition of receiving the gift he

or she must pay any money, or purchase or lease (including ren t ) any

goods or services, if any one o r more of the following conditions exist :

(1) The shipping charge, depending on the method of

shipping used, exceeds (A ) the average cost of postage o r the

average charge of a delivery service in the business of delivering

goods of like size, weight, and kind for shippers other than the

offeror of the gift for the geographic area in which the gift is

being distributed, o r (B) the exact amount for shipping paid to

an independent fulfillment house or an independent supplier,

either of which is in the business of shipping goods for shippers

other than the offeror of the gift.

( 2 ) The handling charge ( A ) is not reasonable, or

(B) exceeds that actual cost of handling, or (C) exceeds the

greater of three dollars ($3) in any transaction or 80 percent of

the actual cost the gift item to the offeror or its agent, o r ( D ) in

the case of a general merchandise retailer, exceeds the actual

amount for handling paid to an independent fulfillment house o r

suppuer, either of which I s in the business of handling goods for

businesses other than the offeror of the gift.

(3) Any goods o r services which must be purchased o r

leased by the offeree of the gift Ln order to obtain the gift could

have been purchased through the same marketing channel in

which the gift was offered for a lower price without the gift items

at or proximate to the time the gift was offered.

(4) The majority of the gift offeror's sales or leases within

the preceding year, through the marketing channel in which the

gift I s offered or through in-person sales at retail outlets, of the

type of goods or services which must be purchased or leased in

order to obtain the gift itern was made in conjunction with the

offer of a gift.

This paragraph does not apply to a gift offer made by a

general merchandise retaller in conjunction with the sale or lease

through mail order of goods o r services (excluding catalog sales)

if (A) the goods or services a r e of a type unlike any other type

of goods or services sold o r leased by the general merchandise

retailer a t any t h e during the period beginning six months

before and continuing until six months after the gift offer,

( B ) the gift offer does not extend for a period of more than two

months, and (C) the gift offer is not untrue or misleading in any

manner.

( 5 ) The gift offeror represents that the offeree has been

specially selected in any manner unless ( A ) the representation is

t rue and (B) the offeree made a purchase from the gift offeror

within the six-month period before the gift offer was made or has

a credit card issued by, o r a retail installment account with, the

gift offeror.

(d) The following definitions apply to this section:

(1) "Marketing channeln means a method of retail distri-

bution, including, but not limited to, catalog sales, mail o rder ,

telephone sales, and in-person sales at retail outlets.

(2) 'General merchandise retailer" means any person o r

entity regardless of the form of organization that has continuously

offered for sale or lease more than 100 different types of goods

or services to the public in the Territory of Guam throughout a

period exceeding five years.

(e) Each violation of the provisions of this section is a mis-

demeanor.

Subchapter V

(332501. Remedies.

The provisions of this Chapter 32 are not exclusive, The reme-

dies specified in Chapter 32 for violation of any section of Chapter 32

or for conduct proscribed by any section of Chapter 32 shall be in

addition to a n y other procedures o r remedies fo r any violation or

conduct provided for in any other law,

Nothing in Chapter 32 shall limit any other statutory or any

common law r igh t s of the Attorney General, o r any other person. If

any act o r practice proscribed by Chapter 32 is also the basis for a

cause of action in common law or a violation of another statute, the

person may a s s e r t the common law or statutory cause of action under

the procedures and with the remedies applicable thereto.

932502. Severability . If any provision of Chapter 32 or the application thereof to any

person or circumstance is held invalid, such invalidity shall not affect

other provisions or applications of Chapter 32 which can be given

effect without the invalid provision or application, and to this end the

provisions of th is article are severable.

TWENTY -FIRST GUAM LEGISLATURE 1991 (FIRST) Regular Session

,ill NO. 273- Introduced by:

* * a

AN ACT TO REPEAL .AND REENACT TITLE 5 CHAPTER 32, FOR THE .PURPOSE OF STRENGTHENING THE REMEDIES AVAILABLE UNDER THE CONSUMER PROTECTION LAW and t o add a *ew Chaper 69 t o 9 GCA t o prohibeit consplracles ln res t fa rn t of ~ r a d e . (y$+-tr BE IT ENACTED BY THE .PEOPLE OF THE'TERRITORY OF GUAM:

section 1. Title 5 , Guam Code Annotated, Chapter 32 is hereby repealed and reenacted to read as follows:

"CHAPTER 3 2

Article I. ~onsume'F~rotection General Regulations.

28 section 32100. Liberal Construction. This chapter shall

29 be liberally construed so that its beneficial purposes may be

30 accomplished. (Thi~~chapter is based upon Texas and ~alifornia

31 consumer protection laws.)

32

33 Section 32101. Short ~itle. This Chapter may Ge cited as

34 the Deceptive Trade Practices-consumer Protection Act.

35

36 Section 32102. Waivers: Public Policy. a

37 (a) Any waiver by a consumer ot the provisions of 38 this chapter is contrary to public policy and is 39 unenforceable and void provided, however, that a waiver is

40 . valid and enforceable if a defendant in an action or claim 41 under this chapter pleads and proves:

(1) the consumer is not in a significantly disparate bargaining position; and

Consumer Protection Bill Page 2

(2) the consumer is represented by legal counsel

in seeking or acquiring goods or services, other than

the pbrchase or lease for a consideration paid or to

be paid that exceeds $1,000,000; and

(3) prior to paying any consideration

whatsoever, the consumer waives all or part of this

chapter, other than Section 32113, by an express

provision in a written contract signed by both the

consumer and the consumer's legal counsel; and

provided, however, that a business consumer with

assets of $5 million or more according to the most

recent financial statement of the business consumer

prepared in accordance with generally accepted

accounting principles that has knowledge and

experience in financial and business matters that

enable it to evaluate the merits and risks of a

transaction and that it is not in a significantly

disparate bargaining position may by written contract

prior to payment of any consideration waive the

provisions of this chapter, other than Section 32113.

(b) The existence or absence of a disparate

bargaining position may not be established as a matter of

law solely by evidence of the consumer's financial position

relative to other parties to the contract or by matters

contained in a written contract relating to the relative

bargaining position of the parties.

(c) An agreement to arbitrate constitutes an

important waiver of the right of access to the courts. An

agroemenk 20 arbitrate zny matter arising sut ~ r ' Zhe ;CL&

or rentai or' goods for any amount of consideration, or any

matter or contingency arising therefrom, shall be treated

as a waiver of rights under this act, is not binding on any

consumer unless there is full compliance both with this

section and with this chapter.

section 32103. Cumulative Remedies. The provision of this

apter are not exclusive. The remedies provided in this

Consumer Protection Bill Page 3

chapter are in addition to any other procedures or remedies

provided for in any other law; provided, however, that no double

recovery shall be permitted under both this chapter and another

law of both actual damages and penalties for the same act or

practice, act or practice that is a violation of a provision of

law other than this chapter may be made the basis of an action

under this chapter if the act or practice is proscribed by a

provision of this chapter or is declared by such other law to be

actionable under this chapter.

Section 32104. Construction and Application. This chapter

shall be liberally construed in favor of the consumer and

applied to promote its underlying purposes, which are to protect

consumers against false, misleading, and deceptive business

practices, unconscionable actions, and breaches of warranty and

to provide efficient and economical procedures to secure such

protection. Nothing herein shall be construed as authorizing

any person to conduct business in Guam without all necessary

licenses and permits.

Section 32105. Definitions.

As used in this chapter:

(a) "GoodsN means tangible chattels, or real property

purchased or leased for use. Goods also include stocks,

bonds, and securities purchased for investment or resale,

funeral plans, annuities, retirement plans, and also

includes insurance policies purchased for the protection of

a person or property.

(b) "Consumer Goodsz mearls tangible goods purcnss~z

primarily for personai use or for use in the home or on a

farm.

(c) "Consumer ServicesN means services purchased

primarily for personal use or for use in the home or on a

farm or to build, repair, maintain or enhance consumer

goods.

Consumer Pxotectlon Bill Page 4

(d) "Servicesn means work, labor, or service

purchased or leased for use, including services furnished

in connection with the sale or repair of goods.

(e) "PersonH means an individual, partnership,

corporation, association, or other group, however

organized.

(f) nConsumerw means an individual, partnership,

association, corporation, or the government of Guam who

seeks or acquires by purchase or lease, any goods or

services, except that the term does not include a business

consumer that has assets of $25 million or more, or that is

owned or controlled by a corporation or entity with assets

of $25 million or more.

(g) "Nan-business Consumern is a consumer who

purchases goods or services primarily for personal use or

use in the home or on a farm.

(h) nBusiness consumerw means an individual,

partnership or corporation who seeks or acquires by

purchase or lease, any goods or services for commercial or

business use. The term does not include the government of

Guam.

(i) wUnconscionable action or course of actionw means

an act or practice which is perpetrated by a person in the

course of business in the retail sale of a consumer goods

or services and as a regular practice of that business, to

the detriment of a non-business consumer:

(1) takes advantage of the lack of knowledge,

ability, experience, or capacity of a person to a

grossi?. unfair degree; or

(2) results in a gross disparity between the

value received and consideration paid, in a

transaction involving transfer of consideration.

(j) "Traden and 88commercew means the advertising,

offering for sale, sale, lease, or distribution of any good

or service, of any property, tangible or intangible, real,

personal, or mixed, and any other article, commodity, or

8 Consumer Protection Bill

thing of value, wherever situated, and shall include any

trade or commerce directly or indirectly affecting the

people of' the Territory of Guam.

(k) nDocumentary materialn includes the original or a

copy of any book, record, report, memorandum, paper,

communication, tabulation, map, chart, photograph,

mechanical transcription, or other tangible document or

recording, wherever situated.

(1) uKnowinglyn means actual awareness of the

falsity, deception, or unfairness of the act or practice

giving rise to the consumer's claim or, in an action

brought under Subdivision (2) of Subsection (a) of Section

32109, actual awareness of the act or practice constituting

the breach of warranty, but actual awareness may be

inferred where objective manifestations indicate that a

person acted with actual awareness.

(m) "Retail Salen refers to the purchase of goods or

services to an end user.

Section 32106. Deceptive Trade Practices Unlawful.

(a) False, misleading, or deceptive acts or practices

in the conduct of any trade or commerce are hereby declared

unlawful and are subject to action by the Attorney General

or private individuals as permitted pursuant to this

chapter or other provisions of the Guam code. A violation

consisting of any of the following prohibited acts or of

any act prohibited by this title is in itself actionable,

may be the basis for damages, recision, or equitable

reiief. The provisions oi t h i s act are to be liberaliy

construed in favor of the consumer balanced with

substantial justice, and violation thereof may be raised as

a claim, defense, crossclaim or counterclaim.

(b) Except as provided in Subsection (d) of this

section, the term nfalse, misleading, or deceptive acts or practices" includes, but is not limited to, the following

e Consumer Protection Bill

acts. The following acts are hereby prohibited and

declared illegal and contrary to public policy:

(1) passing off goods or services as those of

another; or

( 2 ) causing confusion or misunderstanding as to

the source, sponsorship, approval, or certification of

goods or services; or

( 3 ) causing confusion or misunderstanding as to

affiliation, connection, or association with, or

certification by, another; or

( 4 ) using deceptive representations or

designations of geographic origin in connection with


( 5 ) representing that goods or services have

sponsorship, approval, characteristics, ingredients,

uses, benefits, or quantities which they do not have

or that a person has a sponsorship, approval, status,

affiliation, or connection which he does not; or

(6) representing that goods are original or new

if they are deteriorated, reconditioned, reclaimed,

used, or secondhand. Motor vehicles shall be

considered new or used based on the definitions of new

and used motor vehicles as defined by the Federal

Trade Commission; or

( 7 ) representing that goods or services are of a

particular standard, quality, or grade, or that goods

are of a particular style or mode, if they are of another; or

( b j Representing by sta.c~ments a: fact that

consumer goods or consumer services offered for sale

have a grossly inflated value which the seller knows

to be false and which is not based on the true retail

value of the goods or services or comparables; or

(9) disparaging the goods, services, or business

of another by false or grossly misleading

representation of facts; or

Consumer ~rote&ion Bill

(10) advertising goods or services with intent

not to sell them as advertised; or

(11) advertising goods or services with intent

not to supply a reasonable expectable public demand,

unless the advertisements disclosed a limitation of

quantity; or

(12) making false or misleading statements of

fact concerning the reasons for, existence of, or

amount of price reductions, provided that nothing

herein shall prohibit a nsalen, clearance sale,

seasonal or holiday sale, or a sale based on reasons

which do not imply a distressed or forced sale; or

(13) Falsely stating that one is selling or

liquidating goods which are distressed or misrouted

when the goods are not distressed or misrouted.

(14) representing that an agreement confers or

involves rights, remedies, or obligations which it

does not have or involve, or which are prohibited by

law; or

(15) knowingly making false or misleading

statements of fact concerning the need for parts,

replacement, or repair service; or

(16) misrepresenting the authority of salesman, representative or agent to negotiate the final terms

of a consumer transaction; or

(17) basing a charge for the repair of any item

in whole or in part on a guaranty or warranty instead

of on the value of the actual repairs made or work to

be periormeci Qn the item without stsrii:g separately

the charges for the work and the charge for tne

warranty or guaranty, if any; or

(18) disconnecting, turning back, or resetting

the odometer of any motor vehicle so as to reduce the

number of miles indicated on the odometer gauge; or

(19) As to comprehensive and collision insurance

insuring the vehicle of an insured on policies written

@ Consumer Protection Bill

after the effective date of this act, an insurer may

not pay a consumer less than the face amount of an

insurance policy for a covered loss which is a total

loss, and the insurer is estopped from denying that

the face amount of the policy showing the vehicle's

value upon which the insurance premium was based is

the true value of the vehicle, unless the insurer can

show by a preponderance of the evidence: (a) That the vehicle insured was damaged

by an uninsured cause since the policy was

written, or (b) The vehicle has accumulated mileage in

excess of 16,000 miles per year or part thereof

since the vehicle was first registered, and that

the excess mileage situation did not exist when

the policy was written, or

(c) That the insured fraudulently and

materially misrepresented material facts

concerning the value of the property insured (the

insured's statement as to the estimated of the

value of the vehicle is not a misrepresentation

of fact concerning the value of the vehicle), or

(d) That because of multiple insurance

policies, a co-insurance situation exists.

When a vehicle suffers a total loss, the insured shall

be entitled to a pro-rated refund of unused premiums

pro-rated on the time coverage was in effect for the

insured prior to the loss, for all insurance relating

to the vehicle and iks usage.

(20) Including a co-insurance clause in any

policy of casualty insurance which would limit the

liability of the insurance carrier based upon a theory

of self insurance by the insured. Co-insurance shall

apply only when there is overlapping insurance by two

or more policies. In any case of dual insurance

coverage, the limits of insurance shall be the total

Consumer ~rote&ion Bill

limits of all policies, with payment of claims pro-

rated between the various policies.

.(21) advertising of any sale by fraudulently representing that a person is going out of business;

or

(22) using or employing a chain referral sales

plan in connection with the sale or offer to sell of

goods, merchandise, or anything of value, which uses the sales technique, plan, arrangement, or agreement in which the buyer or prospective buyer is offered the opportunity to purchase merchandise or goods and in

connection with the purchase receives the seller's

promise or representation that the buyer shall have the right to receive compensation or consideration in

any form for furnishing to the seller the names of

other prospective buyers if receipt of the compensation or consideration is contingent upon the

occurrence of an event subsequent to the time the

buyer purchases the merchandise or goods; or

(23) representing that a guarantee or warranty confers or involves rights or remedies which it does

not have or involve provided, however, that nothing in

this chapter shall be construed to expand the implied

warranty of merchantability as defined in Sections

2314 through 2318 of Title 13 of the Guam Code

Annotated to involve obligations in excess of those

which are appropriate to the goods; or (24) selling or offering to sell, either directly

or associated with the sale of goods o; services, a

right of participation in a multl-level

distributorship. As used herein, Mmulti-level

distributorshipn means a sales plan for the

distribution of goods or services in which promises of

rebate or payment are made to individuals, conditioned upon those individuals recommending or securing

additional individuals to assume positions in the

Consumer protect lon Bill @

page 10

sales operation, and where the rebate or payment is

not exclusively conditioned on or in relation to

proceeds from the retail sales of goods, provided that

nothing herein shall prohibit the sale of a sales or presentation kit to prospective salespersons for $150 or less, provided that the kit is sold at not more

than the actual cost to the seller, and that a full refund is offered to the buyer for 30 days after the

delivery of the kit, if the buyer returns the kit to the seller, whether or not the kit is used, and

further provided that the kit can be returned to a location in Guam and the refund immediately collected thereat; or

( 2 5 ) representing that work or services have been performed on, or parts replaced in, goods when the work or services were not performed or the parts replaced; or

( 2 6 ) representing that parts have been replaced

in goods with new parts when in fact used parts were used for replacement; or

( 2 7 ) the failure to disclose information

concerning goods or services which was known at the

time of the transaction if such failure to disclose

such information was intended to induce the consumer

into a transaction into which the consumer would not

have entered had the information been disclosed. A

dealer of vehicles shall reveal to a customer in

writing all repair work done on a vehicle by the dealer or at triz aeaier's instruction prior to sisnincj

a contract of sale or selling a vehicle; or

( 2 8 ) using the term ncorporation,n

nincorporated,nl "limitedM, or an abbreviation of

either of those terms in the name of a business entity

that is not incorporated under the laws of the

territory of Guam or another jurisdiction; or

0 Consumer Protect-an Bill @ page 11

(29) Selling any article or product at less than

the cost thereof, to a Business Consumer or to give

away any article or product, for the purpose of

injuring competitors or destroying competition.

(30) Secretly paying or allowing rebates,

refunds, commissions, or unearned discounts, whether

in the form of money or otherwise, or secretly

extending to certain Business Consumers special

services or privilege not extended to all Business

Consumers purchasing upon like terms and conditions,

to the injury of a competitor and where such payment

or allowance tends to destroy competition, is

unlawful; or

(31) Accepting deposits for goods and services

without actually delivering the goods as promised. If

goods or services are not delivered as promised, or if

the amount of deposit paid by a consumer for goods or

services is in excess of $2,500, the deposit amount

must be promptly deposited in a segregated bank

account on Guam, and may not be withdrawn except after

delivery of the goods or services, or for refund to

the consumer; or

(32) Accepting money from a consumer for goods or

services and not delivering the goods or services or

dedicating the payment to fulfilling the order for


(33) Selling or offering to sell goods to any

person which the seller has no right to sell or goods

Tor which the seller cannot deliver clear title to the

person. Nothing herein shail prevent the sale of

goods which are subject to liens and encumbrances if

revealed in writing to the buyer at or before the time

of sale. Nothing herein shall excuse compliance with

the Bulk Sales Act. ; or

(34) Representing to a consumer that goods or

services are immediately available for delivery or

e Consumer Protect,dn Bill

@ page 12

performance when such is not the case. Unless a

contract or receipt provides otherwise, goods must be

delivered within 4 days of the payment therefore, and

services must be commenced within 10 days of

contracting therefore; or

(35) Selling or offering to sell goods or services which the seller thereof is not fully licensed to sell or offer for sale; or

(36) Selling or offering to sell services which the seller thereof is not fully licensed to performed; or

( 3 7 ) Selling or offering to sell services which the seller thereof is not fully capable of providing; or

( 3 8 ) Selling or offering to sell goods which the seller thereof is not fully licensed to sell; or

( 3 9 ) Selling or offering to sell goods which the seller thereof does not have and cannot reasonably obtain for delivery to the consumer in a reasonable time; or

( 4 0 ) Offering goods or services as a contractor,

engineer or architect without being fully licensed to perform such services; or

( 4 1 ) Selling or offering to sell services as a lawyer, doctor, certified public accountant, or

dentist without being fully licensed in Guam and

admitted to practice the profession in Guam; or

( 4 2 ) Knowingly making false statements of fact as to the results of purchasing or using g o o ~ s cr

services; or

( 4 3 ) Threatening economic retaliation or physical damage to any person or to any person's property if

goods or services are not purchased; or

( 4 4 ) Violation of Regulation Z of the United States Federal Reserve Board in the sale of goods or services; or

9 Consumer Prote .on Bill page 13

(45) Violation of any rule or regulation of the

United States Federal Trade Commission; or

(46) Violation of any rule or regulation of the

United States Food and Drug Administration.

(47) Violation of any rule or regulation of the United States Security and Exchange omm mission. (c) Construction

(a) It is the intent of the legislature that in construing Subsection (a) of this section

in suits brought under Section 32107 of this

chapter the courts to the extent possible will be

guided by Subsection (b) of this section the

interpretations given by the United States

Federal Trade Commission and federal courts to

Section 5(a)(1) of the Federal Trade Commission

Act (15 U.S.C.A. 45(a) (1)).

(b) In construing this chapter the court

consider relevant and pertinent decisions of

courts in other jurisdictions.

(d) The Superior Court of Guam may, upon application

of the Attorney General or any person, enjoin misleading,

or deceptive acts or practices designed to mislead

consumers into buying goods or services.

(e) A contract for goods or services which is based

on a false, misleading or deceptive act as described in

this act is not enforceable by the person responsible for

the false, misleading or deceptive act if there was

reasonable reliance on or reasonable damage to the consumer

from the false, misleading or. deceptive act if there was

reasonable reliance on or material damage to the consumer

from the false, misleading or deceptive act.

(f) A sale of goods or services which is based on a

false, misleading or deceptive act as described in this act

may be revoked by the consumer if there was reasonable reliance on or material damage to the consumer from the

false, misleading or deceptive act.

e Consumer ProtectLon Bill page 14

Section 32107. Restraining Orders.

(a) Whenever the Attorney General or any person has

reason to believe that any person is engaging in, has

engaged in, or is about to engage in any act or practice

declared to be unlawful by this chapter, and that

proceedings would be in the public interest, the Attorney

General or any person may bring an action in the name of

the government of Guam against the person to restrain by

temporary restraining order, temporary injunction, or

permanent injunction the use of such method, act, or

practice. The Attorney General shall be made a party as an

intervening Plaintiff to all actions brought hereunder by

any private party.

(b) The court may issue temporary restraining orders,

temporary or permanent injunctions to restrain and prevent

violations of this chapter and such injunctive relief shall

be issued without bond.

(c) Upon a showing by a person the Attorney General

indicating that fraud has occurred, and that there is a

likelihood that the perpetrator will hide, spend, disparate

or abscond with the funds or assets, the court may order

bank accounts and assets of the perpetrator frozen, pending

resolution of the allegations. The owner of the assets or

bank accounts may move to vacate the freeze on two working

days notice or less if permitted by the court.

(d) in addition to the request for a temporary restraining order, or permanent injunction in a proceeding

broughi: unders Subsection (a) of this sectior,, znc Attorney General or any person may request a civil penalty of not

more than $5,000 per violation.

(e) The court may make such additional orders or

judgments as are necessary to compensate identifiable

persons for actual damages or to restore money or property,

real or personal, which may have been acquired by means of

any unlawful act or practice. Orders of the court may also

Consumer Prote 9 on Bill page 15

include the appointment of a receiver or a sequestration of assets if a person who has been ordered by a court to make

restitution under this section has failed to do so within

three months after the order to make restitution has become

final and nonappealable. (f) Any person who violates the terms of an

injunction under this section shall forfeit and pay to the

government of Guam a civil penalty of not more than $10,000

per violation. In determining whether or not an injunction has been violated the court shall take into consideration the maintenance of procedures reasonably adapted to insure

compliance with the injunction. For the purposes of this

section, the court issuing the injunction shall retain jurisdiction, and the cause shall be continued, and in

these cases, the Attorney General, acting in the name of the territory of Guam, may petition for recovery of civil penalties under this section.

(g) An order of the court awarding civil penalties

under subsection (e) of this section applies only to

violations of the injunction incurred prior to the awarding

of the penalty order. Second or subsequent violations of an injunction issued under this section are subject to the

same penalties set out in Subsection (e) of this section.

(h) All actions brought under this Act shall be tried by the court without a jury to the extent permitted by the U.S. Constitution and the Organic Act of Guam. The

Attorney General may represent one or more named consumers,

may bring a class action, or may sue in the name of the

Government of Guam to recaver damages for unnamed Guam

consumers, with information on the individual consumers and their losses and damages available on discovery.

(i) The Attorney General may represent in court victims of consumer fraud and persons who are victimized by

a violation of this chapter in actions brought pursuant to this act or in pursuing any other legal or equitable remedy available.

@ Consumer Protec,~on Bill e page 16

(j) All civil penalties imposed under this act shall

be paid over to the Consumer protection fund of the

Government of Guam when collected.

(k) Whenever a private party brings an action for

relief based upon this chapter, the Attorney General shall

be served with a copy of the complaint and summons, and may

intervene as a matter of right and may cross claim and

counterclaim on behalf of other consumers.

Section 32108. Exemptions.

(a) Nothing in this chapter shall apply to the owner

or employees of a regularly published newspaper, magazine,

or telephone directory, or broadcast station, or billboard,

wherein in any advertisement in violation of this chapter

is published or disseminated, unless it is established that

the owner or employees of the advertising medium have

knowledge of the false, deceptive, or misleading acts or

practices declared to be unlawful by this chapter, or had a

direct or substantial financial interest or commission in

the sale or distribution of the unlawfully advertised good

or service. Financial interest as used in this section

relates to an expectation which would be the direct result

of such advertisement.

(b) Nothing in this chapter shall apply to acts or

practices authorized under specific rules or regulations

promulgated by the Federal Trade Commission under Section

5(a) (1) of the Federal Trade Commission Act [15 U.S.C.A.

45(a) (I)]. The provisions of this chapter do apply to any

a c t or practice prohibited or not specifically authorized

by a rule or regulation of the Federal Trade Commission.

An act or practice is not specifically authorized if no

rule or regulation has been issued on the act or practice.

Section 32109. Relief for Consumers.

@ Consumer Protect,on Bill

e page 17

(a) Any person or the Attorney General may maintain

an action where any of the following constitute a producing

cause of actual damages:

(1) the use or employment by any person of a

false, misleading, or deceptive act or practice that

is specifically enumerated in Chapter 32 of Title 5 of

Guam Code Annotated. Suit may be brought directly

notwithstanding an agreement to arbitrate, and

arbitration may be bypassed by the consumer for

violations of Chapter 32 of Title 5 of Guam Code

Annotated; or (2) breach of an express or implied warranty.

Suit may be brought directly notwithstanding an

agreement to arbitrate, and arbitration may be

bypassed by the consumer for breach of express or

implied warranty; or

(3) misrepresentation or fraud. Suit may be

brought directly notwithstanding an agreement to

arbitrate, and arbitration may be bypassed by the

consumer for misrepresentation or fraud. In such

case, all collateral issues not involving fraud or

misrepresentation shall also be decided in the action;

or

f4)--any-uneense&en&b&e-aetien-er-eeurse-ae

aetian-by-any-persent]

(b) In a suit filed under this section, each consumer who prevails may obtain:

(1) the amount of actual damages found by the

trier of fact. in addition the court shaii sward two

times that portion of the actual damages that does not

exceed $10,000. If the trier of fact finds that the

conduct of the party was committed knowingly, the

trier of fact may award not more than three times the

amount of actual damages in excess of $50,000,

provided that:

B) Consumer Protec,~on Bill page 18

(a) the provisions of Civil Code, as

modified by the Rules of Civil Procedure for Guam

$shall govern the determination of the consumerls

right under this chapter to recover actual and other damages, including exemplary damages, and

the amount of those damages that may be recovered

by the consumer under this chapter, in an action seeking damages for (i) death; (ii) personal injury; or (iii) damage to property other than

the goods acquired by the purchase or lease that

is involved in the consumer's action or claim if

that damage arises out of an occurrence that

involves death or bodily injury; and

(b) only in an action under this chapter that is subject to Paragraph (A) of this subdivision, the consumerls right to recover damages shall be subject to any defense or

defensive matter that could be considered by the

trier of fact in an action subject to Sections 1714 and 1714.1 of the Civil Code, in determining

the percentage of responsibility attributable to

the consumer claimant under that Chapter;

(2) an order enjoining such acts or failure to act;

(3) orders necessary to restore to any party to

the suit any money or property, real or personal,

which may have been acquired in violation of this chapter; and

(4) any other relief which the court deems

proper, including the appointment of a receiver or the revocation of a license or certificate authorizing a

person to engage in business in the Territory of Guam

if the judgment has not been satisfied within three

months of the date of the final judgment. ~otwithstanding any other provision of law, the court

may revoke or suspend a license to do business in the

e Consumer Protection Bill

e page 19

territory of Guam or appoint a receiver to take over

the affairs of a person who has failed to satisfy a

judgment even if the person is a licensee of or

regulated by an agency or board or other entity of the

government of Guam which has statutory authority to

revoke or suspend a license or to appoint a receiver

or trustee. Costs and fees of such receivership or

other relief shall be assessed against the party.

(c) On a finding by the court that an action under

this section was groundless and brought in bad faith, or

brought for the purpose of harassment, the court shall

award to the party reasonable and necessary attorneys1 fees

and court costs.

(d) Each consumer who prevails shall be awarded court

costs and reasonable and necessary attorneys' fees.

Section 32110. Notice: Offer of Settlement.

(a) As a prerequisite to filing a suit seeking

damages under Subdivision (1) of Subsection (b) of Section

32109 of this chapter against any person, a consumer shall

give written notice to the person at least 30 days before

filing the suit advising the person, in reasonable detail,

of the consumer's specific complaint and the amount of

actual damages and expenses, including attorneys1 fees, if

any, reasonably incurred by the consumer in asserting the

claim against the party. During the 30-day period a

written request to inspect, in a reasonable manner and at a

reasonable time and place, the goods that are the subject

of the consumer:^ action or claim may be presented to the

consumer. If the consumer unreasonably refuses to permit

the inspection, the court shall not award the two times

actual damages not exceeding $10,000, as provided in

Subsection (b) of Section 32109 of this chapter.

(b) If the 30 days written notice is given within 120

days of the running of the statute of limitations, giving

the notice as required by this section shall have the

@ Consumer ProtecLion Bill

e page 20

effect of extending the statute of limitations until the

121st day after the giving of the notice.

(c). .Any person who receives the written notice provided by Subsection (a) of this section may, within 30

days after the receipt of the notice, tender to the

consumer a written offer of settlement, including an

agreement to reimburse the consumer for the attorneys1

fees, if any reasonably incurred by the consumer in asserting his claim up to the date of the written notice.

A person who does not receive such a written notice due to the consumer's suit or counter claim being filed as provided for by Subsection (b) of this section may, within

30 days after the filing of such suit or counterclaim, tender to the consumer a written offer of settlement,

including an agreement to reimburse the consumer for the

attorneys1 fees, if any, reasonably incurred by the

consumer in asserting his claim up to the date the suit or counterclaim was filed. Any offer of settlement not

accepted within 30 days of receipt by the consumer shall be deemed to have been rejected by the consumer.

(d) A settlement offer made in compliance with

Subsection (c) of this section, if rejected by the

consumer, may be filed with the court together with an

affidavit certifying its rejection. If the amount tendered

in the settlement offer is the same as or more than, or if the court finds that amount to be substantially the same

as, the actual damages found by the trier of fact, the

consumer may not recover an amount in excess of the amount

tendered in the settlement offer or the amount of actual

damages found by the trier of fact, whichever is less.

Such settlement offer shall not be admissible as evidence

before a jury.

(e) The tender of an offer of settlement is not an

admission of engaging in an unlawful act or practice or of

liability under this Act. Evidence of a settlement offer may be introduced only to determine the reasonableness of

e Consumer Prote~,ion Bill page 21

the settlement offer as provided for by Subsection (d) of

this section.

(f) If a consumer is sued over a transaction by the

seller, the consumer may raise the defenses permitted by

this act and related to that transaction without need for a

demand or settlement offer to the plaintiff.

( g ) Defective goods:

(a) New goods are defective if, within 30 days of delivery, they break or fail to operate

as intended through no fault of or misuse by the consumer. Goods which are found to be defective within 30 days of delivery must be corrected by

the seller, and the seller may not rely upon any

manufacturer's warranty to escape responsibility for correction. This subsection applies only to

durable goods having a reasonable life expectancy

of over 30 days. Goods having a shorter life

expectancy are defective if they fail

prematurely. This section does not apply to

sales without warranty as described in subsection

(3) of this subsection, below.

(b) After 30 days, goods shall be repaired

or replaced according to the terms of warranty,

if any, unless the seller has by advertisement,

written or oral communication indicated some

longer time for which the seller assumes

responsibility. If a warranty is not honored, the consumer may elect to treat the goods as

defective goods and proceed under this section

against both the warrantor and the seller from

whom the goods were purchased. Used goods are

assumed to be sold as is where is without implied

warranty, if the buyer knows the goods are used.

If used goods are sold to a consumer as new, the

court shall require repair, refund, or

replacement as if the item were new, and in

Consumer ~rotectkon Bill 8 page 2 2

addition, if the matter goes to suit, the court

shall award the consumer punitive damages of

'$2,000 or three times the value of the goods,

whichever is greater.

(c) Nothing herein shall prohibit the sale

of goods sold subject to a defect, nor the sale

of goods as is where-is or without warranty if

the defects or lack of warranty or selling as is

where is disclosed to the consumer. As to goods

having a sale price in excess of $75, the

disclosure must be in a separate writing signed

by the consumer prior to purchase.

(d) The purchaser of new defective goods is

entitled to have the actionable defects in the

goods repaired at the expense of the seller; the

goods replaced by like goods which are not

defective upon return of the original goods to

the seller; or to have the purchase price

refunded upon return of the goods to seller, less

damages done to the goods by the consumer and

less the fair value of the usage of the item if

used for more than 30 days; at the sole option of

the seller as to whether to repair, replace, or

refund. Unless it can be proven that the seller

knowingly sold defective goods to a customer

without knowledge of the defect, the consumer is

not entitled to damages for the consumer*^

inconvenience nor for lost profits, but is

entitled to other actual damages, plus, if the

matter is brought to suit, the other relief

allowed by this act. Before filing suit for such

defective goods, the consumer must give a 30 day

written notice of the defect, must make the goods

reasonably available to the seller for

inspection, and, if the consumer took delivery of

the goods from the seller at the seller's place

KLEMM. BLAIR. STERLING 6 JOHNSON. 21-18 part...LAW OFFICES KLEMM. BLAIR. STERLING 6 JOHNSON A...

Documents

Transcript of KLEMM. BLAIR. STERLING 6 JOHNSON. 21-18 part...LAW OFFICES KLEMM. BLAIR. STERLING 6 JOHNSON A...