McHUGH, Justice:
This case is before the Court on certified question raised by the Putnam County Circuit Court in its June 9, 2009, "Order Issuing Certificate of Certified Question," and its July 14, 2009, "Amended Order Denying Defendants' Motion to Dismiss and, Alternatively, for Summary Judgment, but Certifying a Legal Question to the West Virginia Supreme Court of Appeals." The question
The lower court answered the question in the negative.
The underlying consumer fraud suit was filed pursuant to the WVCCPA in April 2004 by Respondents as private citizens who purchased prescription hormone replacement therapy ("HRT") drugs. West Virginia Code § 46A-6-106(a) specifically provides in pertinent part that:
Respondents' complaint, filed on behalf of themselves and a class of others similarly situated,
Following completion of class certification discovery, Wyeth filed alternative motions for dismissal or summary judgment on October 27, 2008. In support of these motions Wyeth argued that Respondents could not establish that they had standing to sue because they failed to meet their burden of showing a causal connection between their individual claims of injury and any alleged unfair or deceptive conduct attributed to Wyeth. Wyeth particularly noted the lack of evidence demonstrating that: Respondents received information from Wyeth about HRT; Respondents decided to purchase HRT drugs because of anything they learned from Wyeth; Respondents' treating physicians considered information from Wyeth when they issued the prescriptions for HRT drugs to Respondents; or that Wyeth concealed any studies or other information about HRT drugs.
Respondents countered by arguing that the statutory language only requires that they prove causation by alleging that Wyeth engaged in deceptive practices and that Respondents were harmed. They maintained that reliance on deceptive statements or
The lower court found that the WVCCPA does not require plaintiffs pursuing a private cause of action to allege reliance in their complaints. The court then denied Wyeth's motions to dismiss or for summary judgment for lack of standing. The lower court observed that the interpretation of the phrase "as a result of" in West Virginia Code § 46A-6-106(a) was a matter of first impression and was a determinative issue in a potentially large and costly suit. Concerned with the seeming conflict between its interpretation of the statutory phrase in light of the constitutional standing requirement regarding causal connection,
Wyeth petitioned this Court for review of the certified question, which was accepted by order dated November 12, 2009. Thereafter, we granted leave to the Product Liability Advisory Council to file an amicus curiae brief in support of Wyeth. We also granted leave to the West Virginia Attorney General and the West Virginia Association of Justice to file amicus curiae briefs in support of Respondents.
As stated in syllabus point one of Gallapoo v. Wal-Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996), "The appellate standard of review of questions of law answered and certified by a circuit court is de novo."
The question as certified from the lower court is:
The positions of the parties regarding the meaning of the phrase "as a result of" was outlined in the lower court's July 14, 2009, amended order as follows:
Based upon the remedial nature of the subject statute, the lower court proposes that the question be answered in the negative. In the context of the question as certified, this would mean that the lower court suggests that a purchaser of goods and services does not have to allege or prove a purchase was made "because of and in reliance upon an unlawful deceptive act" in order to establish a private cause of action pursuant to the
The parties point to numerous decisions in various jurisdictions regarding reliance as an element in consumer protection cases brought pursuant to state consumer protection statutes. Most states adopted consumer protection legislation in the 1960's and 1970's in reaction to the failure of federal laws to provide consumers with an adequate alternative to the proof requirements of common law fraud to remedy unfair and deceptive trade practices. See Dee Pridgen & Richard M. Alderman, Consumer Protection and the Law vol. 1, § 1:1(2009-2010 ed.); Sheila B. Scheuerman, The Consumer Fraud Class Action: Reining in Abuse by Requiring Plaintiffs to Allege Reliance as an Essential Element, 43 Harv. J. on Legis. 1, 10-20 (2006) for historical genesis of consumer protection laws.
The WVCCPA was enacted in 1974 and "is a hybrid of the Uniform Consumer Credit Code and the National Consumer Act and some sections from then-existing West Virginia law." Clendenin Lumber and Supply Co., Inc. v. Carpenter, 172 W.Va. 375, 379 n. 4, 305 S.E.2d 332, 336 n. 4 (1983). While all states have consumer protection laws, the provisions of the statutes among the states is far from uniform. Indeed, some state laws do not provide a private right of action
Given the significant differences in the statutes, at the outset we identified those states which have adopted the same relevant statutory language as West Virginia to aid in our review of the numerous and varied judicial decisions addressing the subject here raised.
To this end, we surveyed the statutes of the various states to determine if they contained provisions using the same relevant terminology as West Virginia Code §§ 46A-6-106 and 46A-6-102(7)(M). The italicized phrases in the following recitation of the two statutes was the focus of our undertaking.
West Virginia Code § 46A-6-106:
West Virginia Code § 46A-6-102:
Our study reveals that the private cause of action provisions of twenty-eight states contain the "as a result of" language.
The lower court began its analysis of the reliance issue by considering Respondents' argument that the "as a result of" language of § 46A-6-106 should be read in conjunction with the definition of unfair or deceptive acts or practices appearing in § 46A-6-102(7)(M), which provides that a person does not have to be "in fact ... misled, deceived or damaged" by the deceptive act or practice. The lower court agreed with Wyeth's position that as a matter of statutory construction, the more specific provisions of what constitutes a private cause of action in § 46A-6-106(a) takes precedence over the general provisions contained in the definitions of § 46A-6-102.
The lower court then proceeded to address the question of whether the "as a result of" language in § 46A-6-106(a) reflects the Legislature's intent to impose a reliance requirement in all private causes of action brought pursuant to the WVCCPA. Finding that the intent of the Legislature was not clear, the lower court proceeded to construe the statute to resolve the ambiguity. After an extensive review of relevant case law from other jurisdictions as well as various authorities addressing the issue, the lower court concluded that, given the overriding remedial purpose of the WVCCPA "to protect consumers from deceptive acts and to prevent producers and distributors from providing false information about the dangers of products to consumers," the "as a result of" language in W. Va.Code 46A-6-106(a) does not require proof of reliance, but only proof of causation. The lower court nonetheless expressed concern that its decision potentially conflicted with the standing requirement that a causal connection exist
Wyeth first maintains that the lower court's determination regarding reliance is incorrect because the structure and plain language of § 46A-6-106(a) requires proof that the plaintiffs knew of and relied upon the allegedly deceptive conduct. Wyeth proposes that under the plain terms of this statute a plaintiff must allege and prove the following three elements: (1) an ascertainable loss; (2) the occurrence of an unfair or deceptive act or practice; and (3) demonstration that the loss was realized "as a result of" the improper act or practice. Wyeth insists that the phrase "as of result of" has to be read to mean that a plaintiff relied on the improper act or practice alleged in order to satisfy standing requirements. Following Wyeth's argument, irrespective of the nature of the unlawful practice a seller may have committed, a consumer would only have a cause of action under § 46A-6-106(a) when the consumer is able to demonstrate his or her purchase was made in reliance on the deceptive practice.
Respondents contend that the phrase "as a result of" does not mean that a consumer must produce some concrete evidence of reliance to establish a WVCCPA private cause of action. Instead they maintain that all that must be alleged and proven in a private WVCCPA cause of action is that an ascertainable loss was suffered and that the loss was caused by the unlawful deceptive conduct alleged.
The WVCCPA defines "[u]nfair methods of competition and unfair or deceptive acts or practices" as including "[t]he act, use or employment" of "any deception, fraud, false pretense, false promise or misrepresentation, or the concealment, suppression or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale
In construing an ambiguous statute, we must determine and adhere to legislative intent. Syl. Pt. 11, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995). "In ascertaining legislative intent, effect must be given to each part of the statute and to the statute as a whole so as to accomplish the general purpose of the legislation." Syl. Pt. 2, Smith v. State Workmen's Compensation Commissioner, 159 W.Va. 108, 219 S.E.2d 361 (1975). In the introduction to the "General Consumer Protection" article of the WVCCPA—the article in which the private cause of action of consumers at issue here is codified—the Legislature declared that:
W. Va.Code § 46A-6-101. We have recognized the dual legislative purposes of protecting consumers and promoting sound and fair business practices. McFoy v. Amerigas, Inc. 170 W.Va. 526, 295 S.E.2d 16 (1982); State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995). With specific regard to the statutory private cause of action we have said that the WVCCPA was intended "to protect consumers from unfair, illegal, and deceptive acts or practices by providing an avenue of relief for consumers who would otherwise have difficulty proving their case under a more traditional cause of action." Id. at 777, 461 S.E.2d at 523. As a remedial law, "we must construe the [consumer protection] statute liberally so as to furnish and accomplish all the purposes intended." Id.
On the issue of legal causation, this Court has defined the concept of proximate cause as "that cause which in actual sequence, unbroken by any independent cause, produced the wrong complained of, without which the wrong would not have occurred." Syl. Pt. 3, in part, Webb v. Sessler, 135 W.Va. 341, 63 S.E.2d 65 (1950). The U.S. Supreme Court in Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008), recently examined whether in order to satisfy proximate cause in a civil RICO claim predicated on a violation of the mail fraud statute required the plaintiffs in such case to show that they relied on a defendant's alleged misrepresentations. Rejecting the contention that the proximate-cause analysis applicable to a common-law fraud claim applied, the Supreme Court noted that "[r]eliance is not a general limitation on civil recovery in tort." Id. at 655, 128 S.Ct. 2131. The Court went on to say in Bridge that "while it may be that first-party reliance is an element of a common-law fraud claim, there is no general common-law principle holding that a fraudulent misrepresentation can cause legal injury only to those who rely on it." Id. at 656, 128 S.Ct. 2131.
The U.S. Supreme Court's conclusion has particular relevance where, as here, the statutory cause of action envelops deceptive practices involving information being concealed, withheld or omitted. Requiring proof of reliance on the misrepresentation alleged in such instances would virtually eliminate private causes of action authorized by statute for covert deceptive practices. Such finding would violate the "cardinal rule of statutory construction ... [providing] that significance and effect must, if possible, be given to every section, clause, word or part of the statute." Syl. Pt. 3, Meadows v. Wal-Mart Stores, Inc., 207 W.Va. 203, 530 S.E.2d 676 (1999).
We recognize that some states require reliance on the deceptive practice to be pled and proven in every private consumer protection case, either on the basis of the express language of the enabling statute,
Our review of the diverse cases and numerous authorities addressing the issue of reliance in the context of private consumer protection causes of action leads us to the conclusion that courts are struggling to arrive at a way to be faithful to the purposes of consumer protection statutes—promoting fair and honest business practices and protecting consumers—without inviting nuisance lawsuits which impede commerce. In determining the meaning of the phrase "as a result of" in the WVCCPA, we find the decisions from other jurisdictions which are most reasonable, practical and fair to all relevant purposes and interests are those which have concluded that proof of a causal nexus between the deceptive conduct giving rise to the private cause of action and the ascertainable loss may require proof of reliance in some but not all instances.
As observed by one authority, "[r]eliance and causation are twin concepts, often intertwined, but not identical, and in some circumstances reliance can be an element of causation." Carolyn L. Carter & Jonathan Sheldon, Unfair and Deceptive Acts and Practices § 4.2.12.5, 215 (7th ed., 2008), citing Stutman v. Chemical Bank, 95 N.Y.2d 24, 709 N.Y.S.2d 892, 731 N.E.2d 608 (2000); Smoot v. Physicians Life Ins. Co., 135 N.M. 265, 87 P.3d 545 (N.M.Ct.App.2003); Sanders v. Francis, 277 Or. 593, 561 P.2d 1003 (1977). As aptly illustrated by the Oregon Supreme Court in Sanders v. Francis:
Id. at 1006.
Following this reasoning, when consumers allege that a purchase was made because of an express or affirmative misrepresentation, the causal connection between the deceptive conduct and the loss would necessarily include proof of reliance on those overt representations. Cf. Group Health Plan, Inc. v. Philip Morris, Inc., 621 N.W.2d 2 (Minn.2001); Tucker v. Blvd. At Piper Glen LLC, 150 N.C. App. 150, 564 S.E.2d 248 (2002); Feitler v. The Animation Celection, Inc. 170 Or.App. 702, 13 P.3d 1044 (2000); Schnall v. AT & T Wireless Servs., Inc., 168 Wn.2d 125, 225 P.3d 929 (2010). Where concealment, suppression or omission is alleged, and proving reliance is an impossibility, the causal connection between the deceptive act and the ascertainable loss is established by presentation of facts showing that the deceptive conduct was the proximate cause of the loss. In other words, the facts have to establish that "but for" the deceptive conduct or practice a reasonable consumer would not have purchased the product and incurred the ascertainable loss. We find that this approach best serves the WVCCPA's dual purpose of protecting the consumer while promoting "fair and honest competition." W. Va.Code § 46A-6-101. Thus, a private cause of action under the provisions of West Virginia Code § 46A-6-106(a) of the West Virginia Consumer Credit and Protection Act must allege: (1) unlawful conduct by a seller; (2) an ascertainable loss on the part of the consumer; and (3) proof of a causal connection between the alleged unlawful conduct and the consumer's ascertainable loss. Where the deceptive conduct or practice alleged involves affirmative misrepresentations, reliance on such misrepresentations must be proven in order to satisfy the requisite causal connection.
Turning to the facts in the matter now before us, we are simply not convinced
For the reasons set forth above, we answer the reformulated certified question as follows:
Certified question answered.
Chief Justice Davis disqualified.
Senior Status Judge Fox, sitting by temporary assignment.
Justice Workman disqualified.
Judge Aboulhosn, sitting by temporary assignment.