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
SENATE 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 restaurant without obtaining written consent from the restaurant 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 restaurant 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 restaurant'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 restaurant
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 restaurant's product
through a marketplace.
(d)
"Likeness" means an identifiable symbol attributed and easily
identified as belonging to a specific restaurant.
(e)
"Marketplace" means a third-party delivery service's proprietary
online communication platform where customers can view and search the menus of restaurants
or place an order for restaurants' 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)
"Restaurant" means a food service establishment defined and licensed
under the food law, 2000 PA 92, MCL 289.1101 to 289.8111.
(g)
"Third-party delivery service" means a business entity, other than a
restaurant, 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.