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, there- fore, 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 Page 2
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 Page 3
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 legis- lation -- 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 juris- dictions 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 Page 6
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 infringe- ment 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. toll- ing 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 subsec- tion (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 applica- ble 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 proceed- ing (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 appro- priate 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 regula- tion 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 con- flicts 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 settle- ment 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 regula- tion. 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 regula- tions. 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 news- paper, 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
goods or services; or
( 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
goods or services; or
(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