Saturday, February 04, 2006

In a wreck, get a check - and a consumer protection lawsuit

Crowe v. Tull, --- P.3d ----, 2006 WL 39248 (Colo.)

Crowe hired a lawyer to represent him in a personal injury case; he settled for a low amount, less than Crowe’s existing losses and much less than his anticipated future losses. Crowe later brought a false advertising claim against the lawyer and his firm. He argued that, though he was induced to use the firm’s services by an advertising campaign that portrayed the firm as skilled at extracting money from insurance companies and getting full redress for injury, in fact the firm was a mill that existed to settle claims as quickly as possible and he was pressured into settling for a minimal amount. (Among the slogans defendants used was “In a wreck, get a check,” while another depicts the firm’s president as a strongman who muscles insurance adjusters into paying claims.)

The Colorado Supreme Court held that a client may sue an attorney for violating the Colorado Consumer Protection Act (CCPA), rejecting claims that the statute implicitly excluded attorney advertising and that false advertising claims would impermissibly conflict with/overlap with malpractice liability and other regulations of attorney conduct. The CCPA requires (1) knowledge of a deceptive trade practice – negligence will not suffice -- and (2) conduct that significantly affects the public, and so the court believed that CCPA claims would not cover much attorney conduct. In particular, the CCPA’s limitation to trade practices that significantly affect the public means that individualized statements and contracts cannot violate the law.

Nonetheless, the court believed that modern lawyer advertising – which does include a substantial amount of mass marketing – fit within the broad scope of the law:
Contemporary advertising and marketing practices for attorney services more closely reflect the commercial marketplace as a whole and do not reflect the traditional image of the small-town practitioner hanging up a shingle and relying on personal contacts to create business. Marketing consultants and branding advisors are common tools in legal circles now. Many law firms resemble mid-size corporations rather than the image of small groups of like-minded professionals that still retains some hold on the popular consciousness.
The court was concerned that the average consumer lacks much knowledge about how to distinguish between different legal service providers and may rely solely on the provider’s own statements – often “under the added pressure of a fast-running statute of limitations.” Lawyers (not “unscrupulous” lawyers, I note, just lawyers) may target unsophisticated and underprivileged clients because of their susceptibility to advertising. (The opinion displays just a bit of nostalgia for the pre-Bates days of limited attorney advertising.)

The defendants argued that Crowe’s injury was not caused by the firm’s ads but rather by the lawyer’s advice. The court found that Crowe had alleged a sufficient nexus between the ads and Crowe’s losses. Causation is a question of fact and can be found if the ads are a but-for cause of his damages. In other words, it is enough if an ad was the first link in a chain that led to the harm. This fairly broad statement makes sense, given the purpose of consumer protection statutes; a jury could accept or reject Crowe’s contention that the ads led him to the firm.

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