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Sep 19, 2013

Missouri Merchandising Practices Act: Missouri Supreme Court Approves New Jury Instructions

On August 16, 2013, the Missouri Supreme Court adopted jury instructions for Missouri Merchandising Practices Act (MMPA) actions, which take effect on January 1, 2014. Until now, there were no MAI instructions for submitting an MMPA violation, and it was incumbent upon counsel to draft either a modified MAI or non-MAI instruction setting forth the elements of the cause of action. See Peel v. Credit Acceptance Corp., No. WD75409, 2013 Mo. App. LEXIS 655, at *9 (Mo. Ct. App. May 28, 2013). 

Missouri courts have held that the purpose of the MMPA is “to preserve fundamental honesty, fair play and right dealings in public transactions.” Schuchmann v. Air Services Heating & Air Conditioning, Inc., 199 S.W.3d 228, 233 (Mo. Ct. App. S.D. 2006) (internal quotations omitted). As such, the prohibitions of the MMPA are meant to be construed more broadly than common-law fraud in order to reach any deception or unfair practice. “[T]he MMPA supplements the definition of common law fraud, eliminating the need to prove an intent to defraud or reliance. . . . The statute and the regulation paint in broad strokes to prevent evasion thereof due to overly meticulous definitions.” Id.

As discussed in the Committee Comments, the new MAI instruction focuses on the four elements of an MMPA claim, i.e.: plaintiffs must demonstrate that they (1) purchased merchandise (which includes services) from defendants; (2) for personal, family or household purposes; and (3) suffered an ascertainable loss of money or property; (4) as a result of an act declared unlawful under the Merchandising Practices Act. Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758, 773 (Mo. banc 2007); Edmonds v. Hough, 344 S.W.3d 219 (Mo. App.2011). The Committee also notes that the MMPA “prohibits ‘deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce,’ by defining such activity as an unlawful practice. Section 407.020.1.”

The Commentary also emphasizes that “[t]he statute does not contain a scienter requirement for civil liability for actual damages. It is the defendant's conduct, not his intent, which determines whether a violation has occurred. State ex rel. Webster v. Areaco Inv. Co., 756 S.W.2d 633, 635 (Mo.App.1988).” (internal quotations omitted). Moreover, “[a] consumer’s reliance on an unlawful practice is not required under the MMPA. Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758, 774 (Mo. banc 2007).” Finally, the Committee also warns that “[t]he Supreme Court of Missouri has cautioned that terms used in the MMPA may have a broader meaning than similar terms used in common law. The court noted that MMPA regulations define ‘material fact’ as ‘any fact which a reasonable consumer would likely consider to be important in making a purchasing decision . . . .’ 15 C.S.R. 60-9.010(1)(C). This definition of material is broader than the materiality requirement of common law fraud.’ See Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d at 773.”

Although the new MMPA jury instruction—MAI 39.01—does not take effect until January 1, 2014, any attorney who has an MMPA case that is likely to go to a jury before the end of calendar year 2013 would be well-advised to take the Supreme Court’s new guidance to heart, in propounding proposed jury instructions.

The full Missouri Supreme Court Order adopting jury instructions for MMPA actions, may be found here.