Bill Text: MI HB5770 | 2019-2020 | 100th Legislature | Engrossed
Bill Title: Consumer protection: consumer solicitation; prohibition for third-party delivery service to use any likeness or intellectual property of a restaurant without written consent; provide for. Amends secs. 3, 5 & 11 of 1976 PA 331 (MCL 445.903 et seq.) & adds sec. 3l.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2020-12-31 - Assigned Pa 296'20 [HB5770 Detail]
Download: Michigan-2019-HB5770-Engrossed.html
Substitute For
HOUSE BILL NO. 5770
A bill to amend 1976 PA 331, entitled
"Michigan consumer protection act,"
by amending sections 3, 5, and 11 (MCL 445.903, 445.905, and 445.911), section 3 as amended by 2018 PA 211 and section 5 as amended by 2006 PA 508, and by adding section 3l.
the people of the state of michigan enact:
Sec. 3. (1) Unfair, unconscionable, or deceptive
methods, acts, or practices in the conduct of trade or commerce are unlawful
and are defined as follows:
(a) Causing a probability
of confusion or misunderstanding as to the source, sponsorship, approval, or
certification of goods or services.
(b) Using deceptive
representations or deceptive designations of geographic origin in connection
with goods or services.
(c) Representing that
goods or services have sponsorship, approval, characteristics, ingredients,
uses, benefits, or quantities that they do not have or that a person has
sponsorship, approval, status, affiliation, or connection that he or she does
not have.
(d) Representing that
goods are new if they are deteriorated, altered, reconditioned, used, or
secondhand.
(e) Representing that
goods or services are of a particular standard, quality, or grade, or that
goods are of a particular style or model, if they are of another.
(f) Disparaging the
goods, services, business, or reputation of another by false or misleading
representation of fact.
(g) Advertising or
representing goods or services with intent not to dispose of those goods or
services as advertised or represented.
(h) Advertising goods or
services with intent not to supply reasonably expectable public demand, unless
the advertisement discloses a limitation of quantity in immediate conjunction
with the advertised goods or services.
(i) Making false or
misleading statements of fact concerning the reasons for, existence of, or
amounts of price reductions.
(j) Representing that a
part, replacement, or repair service is needed when it is not.
(k) Representing to a
party to whom goods or services are supplied that the goods or services are
being supplied in response to a request made by or on behalf of the party, when
they are not.
(l) Misrepresenting that because of some defect in a consumer's
home the health, safety, or lives of the consumer or his or her family are in
danger if the product or services are not purchased, when in fact the defect
does not exist or the product or services would not remove the danger.
(m) Causing a probability of confusion or of misunderstanding
with respect to the authority of a salesperson, representative, or agent to
negotiate the final terms of a transaction.
(n) Causing a probability of confusion or of misunderstanding
as to the legal rights, obligations, or remedies of a party to a transaction.
(o) Causing a probability of confusion or of misunderstanding
as to the terms or conditions of credit if credit is extended in a transaction.
(p) Disclaiming or limiting the implied warranty of
merchantability and fitness for use, unless a disclaimer is clearly and
conspicuously disclosed.
(q) Representing or implying that the subject of a consumer
transaction will be provided promptly, or at a specified time, or within a
reasonable time, if the merchant knows or has reason to know it will not be so
provided.
(r) Representing that a consumer will receive goods or
services "free" or "without charge", or using words of
similar import in the representation, without clearly and conspicuously
disclosing with equal prominence in immediate conjunction with the use of those
words the conditions, terms, or prerequisites to the use or retention of the
goods or services advertised.
(s) Failing to reveal a material fact, the omission of which
tends to mislead or deceive the consumer, and which fact could not reasonably
be known by the consumer.
(t) Entering into a consumer transaction in which the
consumer waives or purports to waive a right, benefit, or immunity provided by
law, unless the waiver is clearly stated and the consumer has specifically consented
to it.
(u) Failing, in a consumer transaction that is rescinded,
canceled, or otherwise terminated in accordance with the terms of an agreement,
advertisement, representation, or provision of law, to promptly restore to the
person or persons entitled to it a deposit, down payment, or other payment, or
in the case of property traded in but not available, the greater of the agreed
value or the fair market value of the property, or to cancel within a specified
time or an otherwise reasonable time an acquired security interest.
(v) Taking or arranging for the consumer to sign an
acknowledgment, certificate, or other writing affirming acceptance, delivery,
compliance with a requirement of law, or other performance, if the merchant
knows or has reason to know that the statement is not true.
(w) Representing that a consumer will receive a rebate,
discount, or other benefit as an inducement for entering into a transaction, if
the benefit is contingent on an event to occur subsequent to the consummation
of the transaction.
(x) Taking advantage of the consumer's inability reasonably
to protect his or her interests by reason of disability, illiteracy, or
inability to understand the language of an agreement presented by the other
party to the transaction who knows or reasonably should know of the consumer's
inability.
(y) Gross discrepancies between the oral representations of
the seller and the written agreement covering the same transaction or failure
of the other party to the transaction to provide the promised benefits.
(z) Charging the consumer a price that is grossly in excess
of the price at which similar property or services are sold.
(aa) Causing coercion and duress as the result of the time
and nature of a sales presentation.
(bb) Making a representation of fact or statement of fact
material to the transaction such that a person reasonably believes the
represented or suggested state of affairs to be other than it actually is.
(cc) Failing to reveal facts that are material to the
transaction in light of representations of fact made in a positive manner.
(dd) Subject to subdivision (ee), representations by the
manufacturer of a product or package that the product or package is 1 or more
of the following:
(i) Except as
provided in subparagraph (ii), recycled, recyclable,
degradable, or is of a certain recycled content, in violation of guides for the
use of environmental marketing claims, 16 CFR part 260.
(ii) For container
holding devices regulated under part 163 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.16301 to 324.16303,
representations by a manufacturer that the container holding device is
degradable contrary to the definition provided in that act.
(ee) Representing that a product or package is degradable,
biodegradable, or photodegradable unless it can be substantiated by evidence
that the product or package will completely decompose into elements found in
nature within a reasonably short period of time after consumers use the product
and dispose of the product or the package in a landfill or composting facility,
as appropriate.
(ff) Offering a consumer a prize if in order to claim the
prize the consumer is required to submit to a sales presentation, unless a
written disclosure is given to the consumer at the time the consumer is
notified of the prize and the written disclosure meets all of the following
requirements:
(i) Is written or
printed in a bold type that is not smaller than 10-point.
(ii) Fully describes
the prize, including its cash value, won by the consumer.
(iii) Contains all the
terms and conditions for claiming the prize, including a statement that the
consumer is required to submit to a sales presentation.
(iv) Fully describes
the product, real estate, investment, service, membership, or other item that
is or will be offered for sale, including the price of the least expensive item
and the most expensive item.
(gg) Violating 1971 PA 227, MCL 445.111 to 445.117, in
connection with a home solicitation sale or telephone solicitation, including,
but not limited to, having an independent courier service or other third party
pick up a consumer's payment on a home solicitation sale during the period the
consumer is entitled to cancel the sale.
(hh) Except as provided in subsection (3), requiring a
consumer to disclose his or her Social Security number as a condition to
selling or leasing goods or providing a service to the consumer, unless any of
the following apply:
(i) The selling,
leasing, providing, terms of payment, or transaction includes an application
for or an extension of credit to the consumer.
(ii) The disclosure is
required or authorized by applicable state or federal statute, rule, or
regulation.
(iii) The disclosure is
requested by a person to obtain a consumer report for a permissible purpose
described in section 604 of the fair credit reporting act, 15 USC 1681b.
(iv) The disclosure is
requested by a landlord, lessor, or property manager to obtain a background
check of the individual in conjunction with the rent or leasing of real
property.
(v) The disclosure is
requested from an individual to effect, administer or enforce a specific
telephonic or other electronic consumer transaction that is not made in person
but is requested or authorized by the individual if it is to be used solely to
confirm the identity of the individual through a fraud prevention service
database. The consumer good or service shall must still be provided to the consumer upon on verification of his
or her identity if he or she refuses to provide his or her Social Security number
but provides other information or documentation that can be used by the person
to verify his or her identity. The person may inform the consumer that
verification through other means than use of the Social Security number may
cause a delay in providing the service or good to the consumer.
(ii) If a credit card or debit card is used for payment in a
consumer transaction, issuing or delivering a receipt to the consumer that
displays any part of the expiration date of the card or more than the last 4 digits
of the consumer's account number. This subdivision does not apply if the only
receipt issued in a consumer transaction is a credit card or debit card receipt
on which the account number or expiration date is handwritten, mechanically
imprinted, or photocopied. This subdivision applies to any consumer transaction
that occurs on or after March 1, 2005, except that if a credit or debit card
receipt is printed in a consumer transaction by an electronic device, this
subdivision applies to any consumer transaction that occurs using that device
only after 1 of the following dates, as applicable:
(i) If the electronic
device is placed in service after March 1, 2005, July 1, 2005 or the date the
device is placed in service, whichever is later.
(ii) If the electronic
device is in service on or before March 1, 2005, July 1, 2006.
(jj) Violating section 11 of the identity theft protection
act, 2004 PA 452, MCL 445.71.
(kk) Advertising or conducting a live musical performance or
production in this state through the use of a false, deceptive, or misleading
affiliation, connection, or association between a performing group and a
recording group. This subdivision does not apply if any of the following are
met:
(i) The performing
group is the authorized registrant and owner of a federal service mark for that
group registered in the United States Patent and Trademark Office.
(ii) At least 1 member
of the performing group was a member of the recording group and has a legal
right to use the recording group's name, by virtue of use or operation under
the recording group's name without having abandoned the name or affiliation
with the recording group.
(iii) The live musical
performance or production is identified in all advertising and promotion as a
salute or tribute and the name of the vocal or instrumental group performing is
not so closely related or similar to that used by the recording group that it
would tend to confuse or mislead the public.
(iv) The advertising
does not relate to a live musical performance or production taking place in
this state.
(v) The performance
or production is expressly authorized by the recording group.
(ll) Violating section
3e, 3f, 3g, 3h, 3i, or 3k, or 3l.
(2) The attorney general may promulgate rules to implement
this act under the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328. The rules shall
must not
create an additional unfair trade practice not already enumerated by this
section. However, to assure national uniformity, rules shall must not be promulgated
to implement subsection (1)(dd) or (ee).
(3) Subsection (1)(hh) does not apply to either of the
following:
(a) Providing a service related to the administration of
health-related or dental-related benefits or services to patients, including
provider contracting or credentialing. This subdivision is intended to limit
the application of subsection (1)(hh) and is not intended to imply that this
act would otherwise apply to health-related or dental-related benefits.
(b) An employer providing benefits or services to an
employee.
Sec. 3l. (1) A third-party delivery service
shall not use a likeness, trademark, or other intellectual property belonging
to a merchant without obtaining written consent from the merchant to use the
likeness, trademark, or other intellectual property. Written consent under this
subsection must be reflected in a valid agreement.
(2)
To enter into a valid agreement under this section, the third-party delivery
service must be registered to do business in this state.
(3)
An agreement under this section must not require the merchant to indemnify the
third-party delivery service, an independent contractor acting on behalf of the
third-party delivery service, or a registered agent of the third-party delivery
service for damages or harm that may occur after a product leaves the
merchant's place of business. A provision of an agreement that is contrary to
this section is void and unenforceable. This subsection applies only to an
agreement that takes effect or is extended, renewed, or modified after the effective
date of the amendatory act that added this section.
(4)
As used in this section:
(a)
"Agreement" means a written contractual agreement between a merchant
and a third-party delivery service.
(b)
"Business entity" means a corporation, association, partnership,
limited liability company, limited liability partnership, or other legal
entity.
(c)
"Customer" means a person that places an order for a merchant's
product through a marketplace.
(d)
"Likeness" means an identifiable symbol attributed and easily
identified as belonging to a specific merchant.
(e)
"Marketplace" means a third-party delivery service's proprietary
online communication platform where customers can view and search the menus of
merchants or place an order for merchants' products, or both, via the
third-party delivery service's website or mobile application for delivery by
the third-party delivery service to the customer.
(f)
"Merchant" means a restaurant or other retailer.
(g)
"Restaurant" means a food service establishment defined and licensed
under the food law, 2000 PA 92, MCL 289.1101 to 289.8111.
(h)
"Third-party delivery service" means a business entity, other than a
merchant, that provides limited delivery services to customers.
Sec. 5. (1) If the attorney general has probable cause
to believe that a person has engaged, is engaging, or is about to engage in a
method, act, or practice that is unlawful pursuant to under section 3, and gives notice in accordance with pursuant to this section, the attorney
general may bring an action in accordance with principles of equity to restrain
the defendant by temporary or permanent injunction from engaging in the method,
act, or practice. The action may be brought in the circuit court of the county
where the defendant is established or conducts business or, if the defendant is
not established in this state, in the circuit court of Ingham county. County. The court may award costs to the
prevailing party. For Except as otherwise provided in this section, for persistent
and knowing violation of section 3 the court may assess the defendant a civil
fine of not more than $25,000.00. For a violation of section 3(1)(kk), each
performance or production is a separate violation. For a violation of section 3l, the court may assess the defendant a
civil fine of not more than $1,000.00 per violation. Each day a violation of
section 3l occurs counts as a separate violation.
(2) Unless waived by the
court on good cause shown not less than 10 days before the commencement of an
action under this section, the attorney general shall notify the person of his
or her intended action and give the person an opportunity to cease and desist
from the alleged unlawful method, act, or practice or to confer with the attorney
general in person, by counsel, or by other representative as to the proposed
action before the proposed filing date. The notice may be given to the person by mail, postage prepaid,
to his or her usual place of business or, if the person does not have a usual
place of business, to his or her last known address, or, if the person is a
corporation, only to a resident agent who is designated to receive service of
process or to an officer of the corporation.
(3) A prosecuting
attorney or law enforcement officer receiving notice of an alleged violation of
this act, or of a violation of an injunction, order, decree, or judgment issued
in an action brought pursuant to this section, or of an assurance under this
act, shall immediately forward written notice of the violation together with
any information he or she may have to the office of the attorney general.
(4) A person who
knowingly violates the terms of an injunction, order, decree, or judgment
issued pursuant to under this section shall forfeit and pay
to the state a civil fine of not more than $5,000.00 for each violation. For
the purposes of this section, the court issuing an injunction, order, decree,
or judgment shall retain jurisdiction, the cause shall be continued, and the
attorney general may petition for recovery of a civil fine as provided by this
section.
Sec. 11. (1) Whether or not he a person seeks
damages or has an adequate remedy at law, a person may bring an action to do
either or both of the following:
(a) Obtain a declaratory
judgment that a method, act, or practice is unlawful under section 3.
(b) Enjoin in accordance
with the principles of equity a person who is engaging or is about to engage in
a method, act, or practice which that is unlawful under section 3.
(2) Except in a class
action or as otherwise provided in
subsection (3), a person who suffers loss as a result of a
violation of this act may bring an action to recover actual damages or $250.00,
whichever is greater, together with reasonable attorneys' attorney fees.
(3)
Except in a class action, a person who suffers a loss as a result of a
violation of section 3l may bring an action to recover actual damages or
$5,000.00, whichever is greater, together with reasonable attorney fees. In an
action brought under this subsection, the court may, in its discretion, award
punitive damages.
(4)
(3) A person who suffers loss as a result of a violation
of this act may bring a class action on behalf of persons residing or injured
in this state for the actual damages caused by any of the following:
(a) A method, act, or
practice in trade or commerce defined as unlawful under section 3.
(b) A method, act, or
practice in trade or commerce declared to be unlawful under section 3(1) by a
final judgment of the circuit court or an appellate court of this state which that is either reported officially or
made available for public dissemination pursuant to section 9 by the attorney
general not less than 30 days before the method, act, or practice on which the
action is based occurs.
(c) A method, act, or practice
in trade or commerce declared by a circuit court of appeals or the supreme court of the United
States Supreme Court to be
an unfair or deceptive act or practice within the meaning of section 5(a)(1) of
the federal trade commission act, 15 U.S.C. USC 45(a)(1),
in a decision which that affirms or directs the affirmance of
a cease and desist order issued by the federal trade commission Federal Trade Commission if the order is final
within the meaning of section 5(g) of the federal trade commission act, 15 U.S.C. USC 45(g), and which that is
officially reported not less than 30 days before the method, act, or practice
on which the action is based occurs. For purposes of this subdivision, a
method, act, or practice shall not be
deemed to be is not unfair
or deceptive within the meaning of section 5(a)(1) of the federal trade
commission act, 15 USC 45(a)(1),
solely because the method, act, or practice is made unlawful by another federal
statute that refers to or incorporates section 5(a)(1) of the federal trade
commission act, 15 USC 45(a)(1).
(5)
(4) On motion of a person and without bond in an action
brought under subsection (3) (4), the court may make an appropriate
order : to reimburse do 1 or more of the following:
(a)
Reimburse persons who have
suffered damages. ; to carry
(b)
Carry out a transaction in
accordance with the aggrieved persons' reasonable expectations. ; to strike
(c)
Strike or limit the application of
unconscionable clauses of contracts to avoid an unconscionable result. ; or to grant
(d)
Grant other appropriate relief. The
(6)
In an action brought under subsection (4), the court after a hearing may appoint a receiver or order
sequestration of the defendant's assets if it appears to the satisfaction of
the court that the defendant threatens or is about to remove, conceal, or
dispose of his the defendant's assets to the detriment
of members of the class.
(7)
(5) If at any stage of proceedings brought under
subsection (3) (4) the court requires that notice be
sent to the class, a person may petition the court to require the defendant to
bear the cost of notice. In determining whether to impose the cost on the
defendant or the plaintiff, the court shall consider the probability that the
person will succeed on the merits of his the person's action.
(8)
(6) If the defendant shows by a preponderance of the
evidence that a violation of this act resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted to avoid the
error, the amount of recovery shall be is limited to actual damages.
(9)
(7) An action under this section shall must not
be brought more than 6 years after the occurrence of the method, act, or
practice which that is the subject of the action nor or more than 1 year after the last
payment in a transaction involving the method, act, or practice which that is the subject of the action,
whichever period of time ends at a later date. However, when if a person commences an action against
another person, the defendant may assert, as a defense or counterclaim, any
claim under this act arising out of the transaction on which the action is
brought.
Enacting section 1. This amendatory act takes effect April 1, 2021.