Bill Text: MI HB5770 | 2019-2020 | 100th Legislature | Enrolled
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-Enrolled.html
state of michigan
100th Legislature
Regular session of 2020
Introduced by Rep. Mueller
ENROLLED HOUSE BILL No. 5770
AN ACT to amend 1976 PA 331, entitled “An act to prohibit certain methods, acts, and practices in trade or commerce; to prescribe certain powers and duties; to provide for certain remedies, damages, and penalties; to provide for the promulgation of rules; to provide for certain investigations; and to prescribe penalties,” 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 must
still be provided to the consumer 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, 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 must not create an additional
unfair trade practice not already enumerated by this section. However, to
assure national uniformity, rules 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 under section 3, and
gives notice 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. The court may
award costs to the prevailing party. 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 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 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 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 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)
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 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 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 USC
45(a)(1),
in a decision that affirms or directs the affirmance of a cease and desist order
issued by the Federal Trade Commission if the order is final within the
meaning of section 5(g) of the federal trade commission act, 15 USC 45(g), and 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 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)
On motion
of a person and without bond in an action brought under subsection (4), the court may
make an appropriate order to do 1 or more of the following:
(a)
Reimburse persons
who have suffered damages.
(b)
Carry out a
transaction in accordance with the aggrieved persons’ reasonable expectations.
(c)
Strike or
limit the application of unconscionable clauses of contracts to avoid an
unconscionable result.
(d)
Grant other
appropriate relief.
(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 the defendant’s assets to the detriment of members
of the class.
(7)
If at any
stage of proceedings brought under subsection (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 the person’s action.
(8)
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 is limited to actual
damages.
(9)
An action
under this section must not be brought more than 6 years after the occurrence of the
method, act, or practice that is the subject of the action or more than 1 year
after the last payment in a transaction involving the method, act, or practice that
is the
subject of the action, whichever period of time ends at a later date. However, 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.
Clerk of the House of Representatives
Secretary of the Senate
Approved___________________________________________
____________________________________________________
Governor