"As to relief against fraud, no invariable rules can be established, Fraud is infinite; and were a Court of equity once to lay down rules, how far they would go, and no farther, in extending their relief against it, or to define strictly the species or evidence of it, the jurisdiction would be cramped and perpetually eluded by new schemes, which the fertility of man's invention would contrive."
- Letter from Lord Hardwicke to Lord Kaims (1759)
At common law (i.e., the "unwritten law," laid down by judges as opposed to legislatures), the elements of fraud are: (1) a misrepresentation concerning a material fact, (i.e., a fact that would cause a reasonable person to behave differently with respect to a transaction), or a failure to disclose a material fact which the defendant had a duty to disclose (generally because it was known only to them, or because they owed a fiduciary duty to the plaintiff); (2) reliance by the plaintiff on the misrepresentation; and (3) resulting damage to the plaintiff, usually financial.
In the case of non-disclosure of a material fact which the defendant was under a duty to disclose, the law will generally presume the element of reliance (i.e., that the plaintiff would have acted differently if the information withheld would have been important to a reasonable person).
In addition to common law fraud, all 50 states and the District of Columbia have enacted some kind of general consumer fraud statute. These statutes are generally of two types. Some states have one or the other, and some states, like California, have both.
The first type of statute is a general prohibition on unlawful, unfair, and/or deceptive business practices, such as California's Unfair Competition Law, and its companion
False Advertising Law. The second type of statute, such as
California's Consumer Legal Remedies Act, prohibits a laundry list of specific deceptive practices, such as misrepresenting the quality or source of goods.
The general federal consumer protection statute, the Federal Trade Commission (FTC) Act, can only be enforced by the government, and not by private parties. Originally designed to fight organized crime, the federal
Racketeer Influenced Corrupt Organizations Act (RICO) can often be used as a surrogate by private parties.
Many subject-specific federal consumer protection statutes are enforceable by private parties, and are well-suited to class actions, such as the Truth-In-Lending Act, the
Real Estate Settlement Procedures Act (which prohibits kickbacks for referrals of most real estate-related services), and the Telephone Consumer Protection Act. Most states, like California, also have subject-specific statutes that often mirror their federal counterparts.
If you have been the victim of a deceptive, unfair, or unlawful business practice, contact Himmelstein Law Network for an evaluation.
Consumer Fraud Cases
Wells Fargo Overdraft Litigation. In 2010, Barry was part of the San Francisco trial team that obtained a
$203 million judgment against Wells Fargo Bank for unfair and fraudulent business practices it used to increase the number of overdraft fees imposed on its California accountholders.
Neurontin Marketing and Sales Practices Litigation. In 2010, Barry was part of the Boston trial team that obtained a
$142 million verdict for Kaiser Foundation, a non-profit health care provider, against Pfizer for deceptive marketing of Neurontin (an anti-epileptic) to physicians for unapproved uses for which it was not effective. The
landmark judgment was the first time a pharmaceutical company had been held liable under the RICO statute.
Property I.D. Kickback Litigation. In
Berger v. Property I.D., Barry represented California home sellers in a case involving kickbacks paid by the largest provider of Natural Hazard Disclosure reports to Coldwell-Banker, Prudential California Realty, and RE/MAX in violation of the “sham” affiliated business relationship provisions of the Real Estate Settlement Procedures Act (RESPA). A
2008 settlement provided class members with full refunds of the amounts paid for their reports, up to a total of $35 million.
American Family Publishers Business Practices Litigation. Barry was co-lead counsel for consumers misled into purchasing magazine subscriptions in the hope of winning the annual American Family Publishers sweepstakes. Even though the company filed for bankruptcy, the $33 million settlement provided class members with over 90% of their claimed losses, with settlement checks averaging over $500.
Lucent Technologies "Y2K" Litigation. Barry represented small businesses in a successful "Y2K" class action against Lucent Technologies for failing to disclose that telephone systems it sold as late as 1997 would cease to function properly after 1999. The case
settled for $110 million.