Gregg v. Ameriprise Financial, Inc., et al., 2011 WL 607486 (Pa. Feb. 17, 2021)

Pennsylvania Supreme Court imposes strict liability standard arising under ‘catchall’ provision of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.

In a 4-3 decision, the Pennsylvania Supreme Court interpreted the “catchall” provision of Pennsylvania’s Unfair Trade Practice and Consumer Protection Law (UTPCL), 73 Pa.C.Ann. § 201-2(4)(xxi) in a manner that rejected any state of mind requirement, whether fraud or negligence, in imposing liability upon a vendor.

The plaintiffs engaged the services of a financial advisor/ insurance salesperson at Ameriprise and, in reliance upon the advisor’s advice, made various investment decisions, purchased an insurance policy and made payments to cover the savings portion of the policy. The plaintiffs alleged that the advisor misrepresented how certain funds were to be deposited and utilized, and believed that the policy would accrue significant cash value.

After a jury trial, a verdict was entered in favor of Ameriprise on the plaintiffs’ claims of common law fraud and negligent misrepresentation. However, the claim under the UTPCL was submitted to the judge at a bench trial, who found in favor of the plaintiffs under the provision imposing liability to vendors “engaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.” The Superior Court rejected the defendant’s contention that the defense verdict on the fraudulent and negligent misrepresentation claims precluded a finding of liability under the UTPCL. The Pennsylvania Supreme Court agreed, finding that as a matter of statutory construction, the legislature included the term “deceptive conduct,” which did not impose a state of mind element. Thus, the test under the UTPCL is a “lesser, more relaxed” standard than that for fraudulent and negligent misrepresentation, and the court held that “all the statute requires the plaintiff to prove is that the acts or practices are capable of being interpreted in a misleading way.”

This decision imposes a strict liability standard as to any conduct that has the potential to deceive and which creates a likelihood of confusion or misunderstanding, without regard to whether the vendor knew or even should have known that such conduct was misleading. This decision has the effect of expanding liability upon those who furnish professional services. To avoid liability, defenses must be focused upon establishing that the conduct at issue was not capable of being misinterpreted by the consumer.


Case Law Alerts, 2nd Quarter, April 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2021 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.