Yokoyama Is Flawed Because It Reads the Causation Requirement Out of Hawaii's Deceptive Practices Act
In a previous post I had sounded the alarm about Yokoyama v. Midland National Life Insurance Co., 2009 WL 2634770 (9th Cir. Aug. 28, 2009), in which the Ninth Circuit had misread Hawaii's Deceptive Practices Act to reverse the trial court's denial of class certification, holding that neither the class representative nor the class was required under the statute to establish causation in order to recover damages. Instead, the Ninth Circuit opined, they need only prove a "tendency to deceive" under a so-called "objective" standard.
If that were, in fact, true, it would make Hawaii's Deceptive Practices Act the most liberal consumer fraud act in the country. But it is not.
This week I published an article in the Federalist Society's periodical Class Action Watch which explains the fundamental flaw in the Yokoyama opinion: it focuses only on the part of the DPA that defines deceptive conduct, and wholly ignores the private right of action provision that authorizes individuals to sue for damages caused by that deceptive conduct. It is this latter provision that requires causation for every claimant (both class representative and absent class member) by creating a private right of action for "any consumer who is injured by an unfair or deceptive act or practice forbidden or declared unlawful by" the statutory section the Ninth Circuit relied upon. Haw. Rev. Stat. sec. 480-13(b) (emphasis added). As my article explains, the Ninth Circuit previously had addressed the interplay between these two statutory provisions, recognizing that mere deceptive conduct -- without damages caused by such conduct -- was not enough to state a claim under Hawaii's DPA. Now, the Yokoyama decision -- which wholly fails to address this prior Ninth Circuit precedent -- sits in the casebooks like a proverbial siren, beckoning lawyers and jurists off course from established Hawaii law at their peril.
I was disappointed that no petition for rehearing en banc appears to have been filed, suggesting that this fundamentally flawed precedent is one we will have to live with for years to come.
