The Unclear Scope of Unconscionability in FDUTPA
In 1993, the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) (F.S. §501.201 et seq. ) was amended to, inter alia, extend its prohibitions to unconscionable, as well as deceptive and unfair, acts or practices in the conduct of any trade or commerce. See §501.204(1). However, this author is not aware of any reported Florida decisions interpreting the meaning of “unconscionable” as used in the statute. The purpose of this article, the second on FDUTPA’s prohibitions,1 is to inquire into the extent of this term’s substantive coverage. Its conclusion is that both the language and legislative history of the 1993 amendments leave the legislative intent as to the meaning of “unconscionable” unclear, except in FDUTPA’s reference to other, independent unconscionability statutes.
Language and Structure
The language and structure of FDUTPA itself are the primary indicators of legislative intent, the acknowledged polestar of statutory construction.2 The statute as amended does not define “unconscionable” or provide standards for determining when a practice is unconscionable. Furthermore, FDUTPA’s definition of a violation refers to unconscionable practices only in the context of independent laws or regulations. It provides that a violation may be based on a violation of: 1) any rules promulgated pursuant to the Federal Trade Commission Act or FDUTPA; 2) the standards of unfairness or deception set forth and interpreted by the FTC or the federal courts; or 3) any law, statute, regulation, or ordinance which proscribes unfair methods of competition or unfair, deceptive, or unconscionable acts or practices.3
With respect to the first prong, the FTC has statutory authority to promulgate Trade Regulation Rules directed at deceptive or unfair, but not unconscionable, acts or practices.4 The TRRs by their terms thus address only deceptive or unfair practices. While the Florida Department of Legal Affairs has promulgated (and in most cases repealed) rules addressing designated unfair or deceptive practices, it apparently has not issued rules designating practices as unconscionable.5 As to the second prong, the FTC has indeed promulgated standards of unfairness and deception, but not standards of unconscionability. In fact, the Federal Trade Commission Act6 contains no mention whatsoever of unconscionable practices or unconscionability. As there are several independent Florida statutes which refer to unconscionable practices, the third prong is the only one which on its face appears to encompass such practices.
There is nevertheless a valid argument, based on the use of the term “may,” that the three prongs of §501.201(3) do not necessarily comprise an exclusive list of the types of practices which may violate FDUTPA.7 Additional factors support a continued search (below) for some legislatively intended further, independent meaning for “unconscionable” in §501.204(1)—the unqualified use of the term in that section and §501.202 (Purposes; rules of construction), together with the general thrust of the principle that, if possible, effect should be given to every word of a statute so that no portion is treated as inoperative or meaningless.8
The Florida Supreme Court has held that an undefined term in legislation should be given its plain and ordinary meaning. That court has additionally instructed, however, that in interpreting such an undefined term consideration must also be accorded to its effect on the objectives and purposes of the statute’s enactment.9 Furthermore, all parts of a statute must be read together in order to achieve a consistent whole.10
The language of other sections of FDUTPA, including one added with the 1993 amendments, do not support a legislative intent to add a broad new category of violation. Revised §501.202(3), added with the 1993 amendments, specifies the expanded statutory purpose of “mak[ing] state consumer protection and enforcement consistent with established policies of federal law relating to consumer protection” (as compared to the prior purpose of making state regulation of consumer sales practices similarly consistent).11 In addition, the 1993 amendments left §504.204(2) intact, providing that “[i]t is the intent of the Legislature that in construing subsection (1), due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to s. 5(a)(1) of the Federal Trade Commission Act. . . . ”12 As discussed above, neither the Federal Trade Commission Act nor the FTC’s TRRs mention unconscionable acts or practices. There is thus no general “established [p]olicy of federal law,” in the area of consumer protection, prohibiting unconscionable acts or practices (although there are a couple of independent federal statutes addressing unconscionable practices).13
Furthermore, interpreting unconscionable to cover a broad range of practices falling outside the three designated categories of §501.201(3) is arguably inconsistent with the substance of those categories themselves. The FTC’s standards of unfairness and deception, promulgated in 1980 and 1983 respectively,14 are in a substantial sense limiting pronouncements. They set forth tests that must be met to make out violations, and in at least one respect indicate that factors previously articulated as grounds for a violation should not prospectively be considered in determining whether a violation has occurred. Specifically, the FTC’s 1980 unfairness statement provided that the broad and previously articulated “immoral, unethical, oppressive or unscrupulous” criterion, one actually cited numerous times in Florida decisions,15 was not to be applied in the future. To permit practices varying widely from those standards (and not covered by either of the other two categories) to constitute violations would arguably vitiate the effect of adopting those standards as bases for violations.
Common Law Meaning?
There is another general principle of statutory construction that use of a common law term is an indicator of legislative intent to adopt its common law meaning. That principle is a rebuttable presumption that can be overcome by the intent reflected in other statutory language and clauses.16
Relatively recent Florida common law unconscionability decisions have focused on the courts’ equitable powers to refrain from enforcing contracts, or clauses thereof, based (usually, but not necessarily exclusively) on a combination of “procedural unconscionability” and “substantive unconscionability.”17 Procedural unconscionability generally refers to an absence of meaningful choice, determined by analyzing the parties’ respective bargaining power, and the ability of the particular contracting party, in light of his or her education, intelligence, or lack thereof, to understand the terms of the contract. Substantive unconscionability generally refers to the unreasonableness and unfairness of the particular terms of the contract.18
There do not, however, appear to be any reported Florida decisions applying the above-mentioned principle of construction to any statute’s use of “unconscionable.” Florida precedent presents an even more specific obstacle to reading common law unconscionability into FDUTPA. In 1979 the Florida Supreme Court addressed an early version (prior F.S. §83.784) of the mobile home rent control statute’s prohibition on unconscionable rent increases. The court held such use constitutionally defective in not “aid[ing] a court or administrative agency in ascertaining the true legislative intent underlying the act” (emphasis added). The court explicitly recognized that ““unconscionability” has an equitable meaning in the common law (citing Point East One Condominium Corp., Inc., v. Point East Developers, Inc., 348 So. 2d 32 (Fla. 3d DCA 1977)), but nevertheless opined that “[n]o such guiding principles are supplied by the legislature here.”19 The legislature, in enacting the 1993 amendments, is presumed to be aware of such preexisting precedent.20
Thus, principles of statutory construction, and Florida precedent, do not clearly indicate or support a legislative intent in FDUTPA to adopt the common law meaning of “unconscionable.” Furthermore, the discussion in the preceding section suggests that other statutory language and clauses in FDUTPA do not point to an intent to incorporate such a broad legal principle as common law unconscionability into FDUTPA.
§501.207(3) Meaning?
The term “unconscionable” actually appeared in FDUTPA in one place (§501.207(3)) prior to the 1993 amendments, and it remains there currently. The term as used there is another arguable source of meaning for “unconscionable” as used in §501.204(1).
Section 501.207(3), detailing remedies available in FDUTPA government enforcement actions, includes obtaining court orders for the limited purpose of “to strike or limit the application of clauses of contracts to avoid an unconscionable result.” However, there is no reference in §501.204(1) as amended to this other use of the term, and “unconscionable” as used in §501.204(1) contains no restrictive language concerning contracts, contractual clauses, or results. Principles of statutory construction concerning the use of varying language in different parts of a statute having different purposes suggest that the legislature, in amending §501.204(1) to add “unconscionable,” did not intend to adopt the more restricted (but still arguably unclear) use of the term as it appeared in §501.207(3).21
On the above analysis, the language of FDUTPA leaves the legislative intent in adding “unconscionable acts or practices” to FDUTPA’s coverage unclear. When the language of a statute is ambiguous, legislative history is relevant in attempting to ascertain the legislature’s intent.22
Legislative History
FDUTPA’s legislative history, unfortunately, also appears unclear as to the intended meaning of “unconscionable.” The Senate staff analysis23 for the 1993 amendments does not discuss the meaning of “unconscionable” per se, but notes that
The definition of a violation is changed. A violation of the little FTC act may be based on FTC rules, FTC or federal court standards, or specific laws, rules or ordinances governing unfair, deceptive or unconscionable acts.
The bill expands s. 501.204, F.S., which specifies that unfair or deceptive acts or practices in the conduct of any trade are unlawful. Under the bill, s. 501.204, F.S., also states that an unconscionable act or practice is unlawful. This change conforms the Deceptive and Unfair Trade Practices Act to ch. 92-353, Laws of Florida, which prohibits unconscionable pricing within an area where the Governor has declared a state of emergency. . . .24
That analysis implies that the purpose of FDUTPA’s new reference to unconscionable acts was to apply its remedies to emergency pricing practices which the legislature had previously designated as unconscionable. The Senate staff analysis also states that a new purpose of the act “is to make consumer protection and enforcement consistent with federal policy,” which, as discussed above, does not reflect an intention to broaden the statute’s coverage greatly beyond deceptive or unfair acts or practices.
While the House’s staff analysis25 of the 1993 amendments similarly omits discussing the meaning of the term “unconscionable” per se, it is more extensive than the Senate’s. It states that
The bill clarifies the scope of the act, conforming it with the majority of states that have little FTC acts. The changes make it a law that clearly protects both individual and business consumers from unfair methods of competition, and unfair, deceptive and unconscionable practices in the conduct of trade or commerce. . . .
In the November 1992 Special Session, the Legislature passed a law creating s. 501.160, relating to unconscionable pricing practices. The Federal Trade Commission Act makes reference to unconscionable acts, but Florida’s little FTC act does not. . . .
The bill clarifies Part II of Chapter 501, conforming it with the majority of states that have little FTC acts. It. . . codifies existing practice and long-standing judicial decisions that make it clear that a violation of the act can involve a rule or statute or the standards of deception or unfairness establised [sic] by the FTC. . . .
The bill. . . otherwise amends the act to make it internally consistent and congruous with other Florida laws, little FTC acts in most other states, and the Federal Trade Commission Act. . . .
However, the Federal Trade Commission Act, again, makes no reference whatsoever to unconscionable acts. It appears that the House drafters were misinformed in this regard.
Similarly, the references to other little FTC acts do not clarify the legislative intent. While a number of other little FTC acts prohibit unconscionable practices, it appears that those of only several states (Michigan, New Mexico, Ohio, and Oregon)26 are like Florida’s in expressly prohibiting all three categories of deceptive and unfair, as well as unconscionable, practices. The statutes of each of those other states, in contrast to Florida’s, either contain explicit definitions or standards for determining unconscionable acts,27 or enumerate (without differentiating) those acts or practices which are unfair, deceptive, or unconscionable. Furthermore, FDUTPA appears to be unique in expressly incorporating the FTC-promulgated standards of deception and unfairness in the very statutory definition of a violation.28 virtue of its very language and structure, therefore, FDUTPA cannot be construed as congruous with other little FTC acts and thus cannot clearly draw substantive meaning from their use of the term “unconscionable.”29
Finally, neither the Senate nor the House staff analyses makes any mention or reference to Florida’s common law of unconscionability, unconscionability as previously used in §501.207(3), or even unconscionability as used in the UCC (see discussion below). The legislative history does not help to clarify or supply meaning to “unconscionable” as used in §501.204, beyond unconscionable pricing practices as designated in §501.160 and other unconscionable practices as referred to in other independent laws.
Other Unconscionability Statutes
As to other statutes specifically referring to unconscionable practices (the third prong of §501.203(3)), FDUTPA ostensibly applies the entire range of its remedies to such practices. Those remedies include injunctive relief; recovery of monetary damages by individuals under §501.211(2); recovery by the prosecuting authority of actual damages on behalf of consumers under §501.207(1)(c) or reimbursement of consumers under §501.207(3); recovery of prevailing party attorneys’ fees; and the numerous additional types of equitable relief available in governmental actions.30
Most of these unconscionability statutes, consistent with the concept’s usage in other areas of the law, establish unconscionability as a defense to enforcement of contract. If monetary damages could effectively be tacked on to violations of such statutes, they would be available presumably by way of a counterclaim for recovery of past payments made by the defendant under the contract plus, perhaps, such additional actual damages as the defendant could prove it suffered by entry into the contract.
As is explained below, though, there are problems under Florida precedent in adding a damages remedy to most of these statutes.
UCC Statutes
The most familiar unconscionability statute is F.S. §672.302, the UCC Article 2 (Sales) unconscionability provision. its terms31 this statute makes unconscionability a defense to enforcement of a contract, but not a claim for recovery of damages. As a threshold matter, the 11th Circuit has held that this provision, in itself, is not a basis for a claim for damages.32 (Similarly, Florida federal court precedent is also to the effect that common law unconscionability is not a basis for recovery of damages.33)
Even assuming, however, that a later enacted “reference” statutory provision such as FDUTPA §501.203(3)(c) can validly graft a damages remedy onto a law which only establishes a defense, applying FDUTPA damages remedies to §672.302 would alter the unified UCC statutory scheme to a significant extent. In enacting the UCC the legislature appeared to indicate in §671.104 (“Construction against implicit repeal”) a general intent that it not be modified piecemeal by extraneous legislation; it referred to the code as “a general act intended as a unified coverage of its subject matter. . . . ” The UCC Official Comment to s. 1-104 similarly refers to “This Act, carefully integrated and intended as a uniform codification of permanent character covering an entire “field” of law. . . . ” As Florida’s UCC is its longstanding governing body of law for a huge volume of commercial transactions, one would expect some express indication by the legislature of an intent to alter it so as to add an actual damages remedy to violations of certain parts of it. No such indication is present.
Furthermore, §671.102 itself states that the underlying purposes of Florida’s UCC include simplifying and clarifying the law governing commercial transactions. That provision at least implies that any modification of that code, to be accepted as controlling, must be abundantly clear.
Also, there appears to be something of a decisional trend to the effect that a separate damages provision in the same statutory scheme as an unconscionability provision, referring to non-enforceability, cannot add a damages remedy to such an unconscionability provision.34 The FDUTPA reference to unconscionability statutes is, to be sure, a somewhat different situation of a later enacted statute attempting to add remedies to an earlier enacted one. Nevertheless, the weight of the UCC provisions and pre-1993 precedent mentioned above, balanced against an absence of expressed legislative intent to the contrary, renders it open to question that FDUTPA effectively adds a damages remedy to the UCC’s unconscionability provisions.
On balance, it seems reasonable to conclude that FDUTPA’s reference to unconscionable practices effectively grafts FDUTPA’s remedies, excluding those affording monetary recovery to consumers (e.g., those available in state actions), onto the use of contracts or contract clauses which are held unconscionable under §672.302.
F.S. §680.1081 is a parallel unconscionability provision in the UCC’s Lease Article. It contains the same provisions, for lease contracts or clauses of lease contracts, as does §672.302 for contracts or clauses of contracts in general. the same analysis set forth above with respect to §672.302, FDUTPA’s unconscionability prong should effectively graft FDUTPA’s remedies, excluding those affording monetary recovery to consumers, onto the use of lease contracts or lease contract clauses which are unconscionable under §680.1081.
Another provision in the UCC’s Sales Article, §672.719(3), prohibits unconscionable limitations or exclusions of consequential damages, and provides that limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable. Here, the clear intent on the face of the provision’s language is nonenforceability of certain contractual remedy clauses. Grafting on a damages remedy would similarly alter the unified UCC scheme, and the analysis set forth above for §§672.302 and 680.1081 would apply here as well.
Condominium and Co-op Statutes
In addition to the UCC provisions, Florida currently has condominium and cooperative building statutes which refer to unconscionable leases or lease provisions.35 Similar to §672.302, these statutes by their terms refer to the invalidation or prohibition of enforcement of such leases or clauses (including recreation leases and escalator clauses). On the analysis presented above it would seem reasonable to conclude that FDUTPA’s 1993 amendments have the limited effect of grafting FDUTPA’s remedies, other than those affording monetary recovery to consumers, onto the use of these unconscionable leases or lease provisions.
Other Statutes
There are a few statutes which refer to unconscionable practices without simultaneously designating the remedy of nonenforceability. F.S. §686.413 makes it a violation for tractor or farm equipment manufacturers, distributors, wholesalers, and dealers to engage in unconscionable actions which damage the parties or the public. F.S. §563.022(5) prohibits beer manufacturers and distributors from, inter alia, engaging in any action which is unconscionable and which causes damage to any of the parties or the public. Both statutes, however, already have their own corresponding remedy provisions, which include damages and attorneys’ fees. It would appear that the 1993 amendments have the limited effect of grafting such additional remedies as are provided by FDUTPA onto such violations.
F.S. §686.611 generally prohibits unfair methods of competition and unfair or deceptive acts or practices in marketing, distributing, and selling outdoor power equipment. It has a subsection providing that it is a violation to engage in any such activity which is arbitrary, capricious, in bad faith, or unconscionable and which causes damage to any of the parties or to the public. It has a separate subsection specifying practices which are deemed to be violations. Sections 686.612 and 686.613 provide broad remedies applicable to violations, including compensatory and punitive damages, injunctive relief, class actions, attorneys’ fees, and any other appropriate civil remedies in state actions, as well as nonenforceability for offending contractual provisions. Assuming that the unconscionability proscription can include practices other than those specified to be violations, the 1993 FDUTPA amendments have the (very limited) effect of grafting such additional remedies as are provided by FDUTPA onto such violations.
Conclusion—Excessively Vague and Ambiguous
The language and legislative history of FDUTPA simply do not permit any clear legislative intent as to the meaning of the term “unconscionable,” as added by the 1993 amendments, to be discerned beyond those instances where the term appears in another statute. Unlike FDUTPA’s “deceptive” and “unfair,” which the Florida Supreme Court in 1976 held to have meanings sufficiently well settled in federal trade regulation law to satisfy the requirements of due process,36 its use of “unconscionable” fails to give adequate guidance to potential defendants as to what practices are and are not covered. FDUTPA’s use of “unconscionable” thus poses a vagueness problem of constitutional dimension.37 Florida precedent38 further indicates that this unclarity leaves inadequate guidance for the Department of Legal Affairs to fashion administrative regulations designating specific practices as unconscionable.
Compare the UCC’s use of “unconscionable” in §2-302. That section, like FDUTPA, does not provide a definition of the term. However, the accompanying official comment explicitly designates the principle, and a case citation, underlying the concept (“The principle is one of the prevention of oppression and unfair surprise. . . and not of disturbance of allocation of risks because of superior bargaining power”).39 While this principle is broad, the comment provides further explanation by citing and summarizing the holdings of 10 additional cases whose results illustrate “[t]he underlying basis of this section.” Compare also §561.160, which explicitly elaborates two categories of prima facie evidence that a particular emergency price is unconscionable;40 15 U.S.C. §3608, concerning cooperative and condominium unit leases, explicitly specifying four characteristics that establish a rebuttable presumption that a qualifying lease is unconscionable; and 15 U.S.C. §1692f, setting forth a nonexclusive list of eight categories of conduct that are unfair or unconscionable means to collect or attempt to collect a debt.41
The legislature can remedy this vagueness problem in a number of ways: by supplying a definition of “unconscionable” as used in §501.204(1); by setting forth standards for determining when a practice is unconscionable; by enumerating types of practices its deems unconscionable, in either an exclusive or nonexclusive list; or by enumerating categories of evidence, in either an exclusive or nonexclusive list, that are prima facie proof that a practice is unconscionable. These types of approaches have been used, as indicated above, in a number of other Florida or federal statutes, or other state little FTC acts, referring to unconscionable practices.42
1 See David J. Federbush, The Unexplored Territory of Unfairness in Florida’s Deceptive and Unfair Trade Practices Act, 73 Fla. B.J. 26 (May 1999).
2 Acosta v. Richter, 671 So. 2d 149, 153 (Fla. 1996); Aetna Casualty & Surety Co. v. Huntington National Bank, 609 So. 2d 1315, 1317 (Fla. 1992); Oppenheimer & Co. v. Young, 456 So. 2d 1175, 1178 (Fla. 1984).
3 Fla. Stat. §501.203(3).
4 15 U.S.C. §57a.
5 See Fla. Admin. Code chs. 2-2–2-28.
6 15 U.S.C. §§41 et seq.
7 Numerous decisions indicate that “may” denotes a permissive rather than a mandatory meaning. Brooks v. Anastasia Mosquito Control District, 148 So. 2d 64, 66 (Fla. 1st D.C.A. 1963); accord, Dept. of Health and Rehabilitative Services v. Johnson, 504 So. 2d 423, 425 (Fla. 5th D.C.A. 1987). The use of “may,” however, does not necessarily preclude the enumerated list from being exclusive. Other indicia of legislative intent help to determine this question. See Sutherland, Statutory Construction §47.18 (5th ed. 1992); State v. Town of Davie, 127 So. 2d 671, 673 (Fla. 1961) (citing Sutherland (3d ed.)). See also Mack v. Bristol-Myers Squibb Co., 673 So. 2d 100, 104 (Fla. 1st D.C.A. 1996), rev. dsm’d, 689 So. 2d 1068 (Fla. 1997), where the court stated in dictum that the legislature did not intend the three prongs to be exclusive. However, the court provided no examples of other arguable types of violations, and no other reported decisions appear to address, much less resolve, this issue.
8 See, e.g., Gretz v. Unemployment Appeals Commission, 572 So. 2d 1384, 1386 (Fla. 1991); accord, Unruh v. State, 669 So. 2d 242, 245 (Fla. 1996).
9 NICA v. Division of Administrative Hearings, 686 So. 2d 1349, 1354 (Fla. 1997); see also Byrd v. Richardson-Greenshields Securities, 552 So. 2d 1099, 1102 (Fla. 1989) (“our obligation is to honor the obvious legislative intent and policy behind an enactment, even where that intent requires an interpretation that exceeds the literal language of the statute”).
10 T.R. v. State, 677 So. 2d 270, 271 (Fla. 1996).
11 The 1993 amendments also added “unconscionable” practices to the preexisting statutory purposes enumerated in §501.202 of 1) simplifying, clarifying and modernizing consumer protection law on unfair and deceptive practices, and 2) protecting consumers from unfair or deceptive practices in the conduct of any trade or commerce. In merely including the same term in §501.202 as that used in §501.204(1), those changes do not appear to provide any clarification as to scope of the expansion of §501.204(1).In Delgado v. J.W. Courtesy Pontiac GMC-Truck, Inc., 693 So. 2d 604,605-6, 611 (Fla. 2d D.C.A. 1997), the court observed in dictum that the1993 amendment of those subsections to cover “unconscionable” acts or practices is a prime example supporting the conclusion that “the legislative purpose for the changes [the 1993 amendments] was to strengthen rather than diminish the original goal of the FDUTPA, which was to protect consumers from those who engage in unfair and deceptive trade practices and acts”. However, the decision addressed an allegedly deceptive, rather than unconscionable, failure to disclose that an automobile sold as new had previously been damaged and repaired, and held that the complaint had stated a cause of action for “deceptive and unfair trade practices and acts”. The brief discussion referring to the unconscionability amendments was part of the court’s reasoning that a FDUTPA claim based on a written sales contract is not precluded by the economic loss rule. The decision contained no unconscionability analysis per se.
12 The policy section of a statute is available for clarification of ambiguous provisions of the statute. Sutherland, supra note 7, at §20.12.
13 One statute addresses unconscionable cooperative or condominium leases and lease provisions (15 U.S.C. §3608), and another prohibits a debt collector from using “unfair or unconscionable” means to collect or attempt to collect any debt (15 U.S.C. §1692f). See also 42 U.S.C. §254o(d), providing that a borrower’s fulfillment of some or all of her payment or service obligations on her Public Health Service student loan may be excused when compliance is impossible or would involve extreme hardship and enforcement of such obligation would be unconscionable (including when a Chapter 11 filing is made).
14 See Federbush, supra note 1, at n.18, including cite to unfairness statement: 104 F.T.C. at 1071-1076; deception statement: 103 F.T.C. at 174-197.
15 See Federbush, supra note 1, at n.19.
16 See, e.g., Goldshein v. Vanner, 216 So. 2d 759, 760 (Fla. 3d D.C.A. 1968); United States v. Esparza-Ponce, 7 F. Supp. 2d 1084, 1092 (S.D. Cal. 1998).
17 E.g., Point East One Condominium Corp., Inc., v. Point East Developers, Inc., 348 So. 2d 32, 36 (Fla. 3d D.C.A. 1977); Kohl v. Bay Colony Club Condominium, Inc., 398 So. 2d 867 (Fla. 4th D.C.A. 1981), rev. den., 408 So. 2d 1094 (Fla. 1981); Steinhardt v. Rudolph, 422 So. 2d 884, 889 (Fla. 3d D.C.A. 1982), rev. den., 434 So. 2d 889 (Fla. 1983); Thomas v. Jones, 524 So. 2d 693, 695 (Fla. 5th D.C.A. 1988); Fotomat Corp. of Florida v. Chada, 464 So. 2d 626, 628 (Fla. 5th D.C.A. 1985); Beeman v. Island Breakers, 577 So. 2d 1341, 1345 (Fla. 3d D.C.A. 1990); Golden v. Mobil Oil Corp., 882 F.2d 490, 493 (11th Cir. 1989).
18 See, e.g., Kohl, 398 So. 2d 867. See also State v. De Anza Corp., 416 So. 2d 1173, 1175 (Fla. 5th D.C.A. 1982) (price-value disparity, in and of itself, is insufficient to establish substantive unconscionability).
19 Dept. of Business Regulation v. National Manufactured Housing Federation, Inc., 370 So. 2d 1132, 1136 (Fla. 1979) (citing, inter alia, Conner v. Joe Hatton, Inc., 216 So. 2d 209 (Fla. 1968) (“unfair trade practices” as used in agricultural statute)); accord, Barker v. State Commission on Ethics, 654 So. 2d 646, 649 (Fla. 3d D.C.A. 1995). The 1979 decision specifically addressed an unlawful delegation of legislative authority to an administrative agency, but the reasoning quoted above strongly indicates that the naked term “unconscionable” is also too vague to permit court interpretation of the legislative intent. See also Sarasota County v. Barg, 302 So. 2d 737, 742 (Fla. 1974) (statute’s use of “undue” and “unreasonable” did not contain any standards or guidelines to aid any court or administrative body in interpreting those terms). Compare Aspen-Tarpon Springs Ltd. v. Stuart, 634 So. 2d 61, 67 (Fla. 1st D.C.A. 1994), in which the revised mobile home rent control statute’s (Fla. Stat. §723.033) use of the term “unreasonable” was accompanied by enumerated guidelines therefor (see subsections (3)-(6)) and was held not unconstitutionally vague.
20 See Florida Wildlife Federation v. State, 390 So. 2d 64, 67 (Fla. 1980).
21 There is a general presumption that the same words used twice in the same act have the same meaning. However, a court may interpret an imprecise term differently in two separate sections of a statute which have different purposes. When the legislature uses certain language in one part of the statute and different language in another, there is a presumption that different meanings were intended. Sutherland §46.06, and 1999 Supp. at p. 100, citing Vanscoter v. Sullivan, 920 F.2d 1441, 1448 (9th Cir. 1990).
22 Byte International Corp. v. Maurice Gusman Trust, 629 So. 2d 191, 192 (Fla. 3d D.C.A. 1993).
23 Senate Staff Analysis and Economic Impact Statement, ch. 93-38 (bill no. CS/SB 1066), at p. 2; see Kirby Center v. Dept. of Labor and Employment Security, 650 A.2d 1060, 1062 (Fla. 1st D.C.A. 1995) (staff analyses may be useful in ascertaining legislative intent).
24 Now Fla. Stat. §501.160, which was enacted after the price gouging following Hurricane Andrew in 1992. Subsection (1)(b) of that law explicitly enumerates two types of prima facie evidence that such pricing is unconscionable:
1) The amount charged represents a gross disparity between the price of the commodity or rental or lease of any dwelling unit or self-storage facility that is the subject of the offer or transaction and the average price at which that commodity or dwelling unit or self-storage facility was rented, leased, sold, or offered for rent or sale in the usual course of business during the 30 days immediately prior to a declaration of a state of emergency and the increase in the amount charged is not attributable to additional costs incurred in connection with the rental or sale of the commodity or rental or lease of any dwelling unit or self-storage facility, or national or international market trends; or
2) The amount charged grossly exceeds the average price at which the same or similar commodity was readily obtainable in the trade area during the 30 days immediately prior to a declaration of a state of emergency, and the increase in the amount charged is not attributable to additional costs incurred in connection with the rental or sale of the commodity or rental or lease of any dwelling unit or self-storage facility, or national or international market trends.
25 H. Rep. Committee on Agriculture and Consumer Services, Final Bill Analysis and Economic Impact Statement, ch. 93-38 (bill no. CS/HB 1753) at pp. 1-3.
26 Mich. Comp. Laws §445.903-32; N.M. Stat. Ann. §57-12-2(E); Ohio Rev. Code §1345.03; Or. Rev. Stat. §646.605(9).
27 Those definitions or standards address, among other things, knowingly taking advantage of a customer’s ignorance or inability to understand; acts resulting in a gross disparity between the value received by a person and the price paid; permitting a consumer to enter into a transaction while knowing that there was no reasonable probability of payment of the obligation in full; and knowingly permitting a consumer to enter into a transaction from which the consumer is unable to derive a benefit.
28 A few courts in other states have applied the currently effective FTC standards of unfairness and deception in deciding cases under their respective little FTC acts, e.g., Suminski v. Maine Appliance Warehouse, Inc., 602 A.2d 1173, 1175 (Me. 1992) (unfairness standard); Legg v. Castruccio, 642 A.2d 906, 917 (Md. App. 1994) (unfairness standard); Luskin’s, Inc. v. Consumer Protection Division, 726 A.2d 702 (Md. 1999) (deception standard).
29 While the adoption of a statute identical or similar to those in effect in other states is grounds for adopting the construction placed on it by other states, courts may refuse to apply this principle if there is a substantial change in the statutory language. The weight accorded to the presumption of the applicability of the foreign construction varies with the similarity between the foreign and domestic acts. Sutherland §52.02, at pp. 198-99; see also Oppenheimer & Co. v. Young, 456 So. 2d 1175, 1178 (principle of referring to foreign construction is not binding and is subordinate to the cardinal principle that legislative intent is the polestar of statutory construction).
30 See Fla. Stat. §§501.207, 501.2075, 501.208.
31 “If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.” §672.302(1).
32 Cowin Equipment Co. v. GMC, 734 F.2d 1581, 1583 (11th Cir. 1984).
33 Bennett v. Behring Corp., 466 F. Supp. 689, 700 (S.D. Fla. 1979).
34 Garrett v. Janiewski, 480 So. 2d 1324, 1327 (Fla. 4th D.C.A. 1985), rev. den., 492 So. 2d 1333 (Fla. 1986) (prior mobile home rent control statutes §§83.754 and 83.761; “The authorities all seem to hold that damages are not recoverable under the language of section 83.754… The wording of that statute is virtually identical with the wording of section 2-302 of the Uniform Commercial Code, which is held not to authorize recovery of damages [citing Behring and Cowin]. . . However, section 83.761.. . provides for recovery of damages.. . for noncompliance.. . with.. . the provisions of the statute.. . . We leave unresolved the question of whether a finding of unconscionability gives rise to damages, such as refunding overpayments, under that section”); Belcher v. Kier, 558 So. 2d 1039, 1043 (Fla. 5th D.C.A. 1990), rev. den., 570 So. 2d 1305 (Fla. 1990) (not reaching the merits of the propriety of the remedy of crediting past overpayments against rent due); Vander Voort v. International Development and Holding Corp., 579 So. 2d 887, 889 (Fla. 2d D.C.A. 1991) (unconscionable rent alleged by defendant; court held defendant had viable claim for damages, but based on loss of use of swimming pool rather than on unconscionable rent).
35 Fla. Stat. §§718.122, 718.4015; Fla. Stat. §§719.112, 719.4015. Many of the (earlier) common law unconscionability decisions addressed condominium recreation lease-type provisions, and the legislature subsequently specifically designated such provisions as unconscionable in these statutes. See Steinhardt, 422 So. 2d 884; Golden Glades Condominium Club, Inc. v. Security Management Corp., 557 So. 2d 1350 (Fla. 1990).
36 Department of Legal Affairs v. Rogers, 329 So. 2d 257, 264-65 (Fla. 1976). See also D’Alemberte v. Anderson, 349 So. 2d 164, 167 (Fla. 1977), opining that FDUTPA’s §501.204(2), which instructs that due consideration and great weight be given to the FTC’s and federal courts’ interpretations, rendered FDUTPA’s language concerning unfair trade practices sufficiently definite to pass constitutional muster, as compared with similar but non-federally referenced unfairness language in the agricultural statute at issue in Conner v. Joe Hatton, 216 So. 2d 209; Askew v. Cross Key Waterways, 372 So. 2d 913, 920 (Fla. 1978).
A member of the Governor’s staff that drafted the initial version of FDUTPA wrote in 1974, prior to the decision in Rogers, that “The Deceptive and Unfair Trade Practices Act appears to have met the void-for-vagueness problem by imposing a standard that the executive must follow in implementing the law. As a guide or standard to define “unfair” or “deceptive” trade practices, subsection 501.204(2) [the ‘due consideration and great weight’ provision] adopts the decisions of the Federal Trade Commission and the precedents of the federal courts in reviewing the Commission’s decisions.. . . The legislature intended the standards of subsection (2) to be fixed standards to meet the necessary constitutional requirements.” Tennyson, R., The Deceptive and Unfair Trade Practices Act: A New Approach to Trade Regulation in Florida, 2 FSU L. Rev. 235 (Spring 1974).
37 See also supra note 19; Sutherland §45.12 (when none of the rules of statutory interpretation disclose with certitude the legislative intent or what meaning is conveyed by the statute, courts may refuse to apply it on the grounds that its terms are too indefinite and uncertain), citing United States v. Evans, 333 U.S. 483, 486 (1948) (when the courts can only guess at the construction Congress thought to apply, that is a task beyond judicial interpretation and it is more in accord with the function of Congress to revise the statute than for the courts to speculate at what Congress would do).
38 See supra note 19; see also Askew, 372 So. 2d at 917-920 (environmental protection land development rule promulgated by Administration Commission, designating virtually all the Keys as an area of critical state concern, invalid since legislative provision authorizing such designations was constitutionally deficient in failing to delineate priorities among competing areas and resources which require protection; “for an administrative agency to ‘flesh out’ an articulated legislative policy is far different from that agency making the initial determination of what policy should be.”).
39 This principle was expressly relied upon in Capital Associates, Inc. v. Hudgens, 455 So. 2d 651, 654 (Fla. 4th D.C.A. 1984). The official comment in preceding language states that “[T]he basic test is whether, in the light of the general commercial background, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract.”
40 See supra note 24.
41 See supra note 13.
42 See supra notes 13, 24, 26, and 27. Once such a clarifying amendment is enacted, the Department of Legal Affairs will presumably have the ability, under §501.205(1), constitutionally to promulgate rules providing (additional) specification as to acts and practices deemed unconscionable. However, DLA’s repeal a number of years ago of most of the rules it had previously promulgated specifying unfair or deceptive practices (see textual discussion above and Federbush, supra note 1, at p. 34 and n. 39) suggests that it does not envision taking action in this regard. In any event, the statutory amendment itself must be sufficiently specific to pass constitutional muster on its own. See DLA v. Rogers, 329 So. 2d at 263.
David J. Federbush practices in Largo, Maryland. He was a litigator in the Federal Trade Commission’s Bureau of Consumer Protection and subsequently has had a commercial and plaintiffs’ litigation practice in Miami and Washington, D.C. Mr. Federbush graduated summa cum laude from Yale University and received his J.D. from Stanford Law School.
This column is submitted on behalf of the Business Law Section, Hal K. Litchford, chair, and T.A. Borowski, editor.
