REPORT TITLE:
Unfair Competition; Actions


DESCRIPTION:
Clarifies that a private person may bring an unfair competition
action.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2437
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO ANTITRUST.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 480-2, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§480-2 Unfair competition, practices, declared unlawful.
 
 4 (a)  Unfair methods of competition and unfair or deceptive acts
 
 5 or practices in the conduct of any trade or commerce are
 
 6 unlawful.
 
 7      (b)  In construing this section, the courts and the office
 
 8 of consumer protection shall give due consideration to the rules,
 
 9 regulations, and decisions of the Federal Trade Commission and
 
10 the federal courts interpreting section 5(a)(1) of the Federal
 
11 Trade Commission Act (15 U.S.C. 45(a)(1)), as from time to time
 
12 amended.
 
13      (c)  No showing that the proceeding or suit would be in the
 
14 public interest (as these terms are interpreted under section
 
15 5(b) of the Federal Trade Commission Act) is necessary in any
 
16 action brought under this section.
 
17      (d)  No person other than a consumer, the attorney general
 
18 or the director of the office of consumer protection may bring an
 
19 action based upon unfair or deceptive acts or practices declared
 

 
Page 2                                                     2437
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 unlawful by this section.
 
 2      (e)  Any person may bring an action based upon unfair
 
 3 methods of competition declared unlawful by this section."
 
 4      SECTION 2.  Section 480-13, Hawaii Revised Statutes, is
 
 5 amended by amending subsection (c) to read as follows:
 
 6      "(c)  The remedies provided in subsections (a) and (b) shall
 
 7 be applied in class action and de facto class action lawsuits or
 
 8 proceedings including actions brought in behalf of direct
 
 9 purchasers, and actions brought in behalf of indirect purchasers
 
10 [by the attorney general under section 480-14,]; provided that: 
 
11      (1)  The minimum $1,000 recovery provided in subsections (a)
 
12           and (b) shall not apply in a class action or a de facto
 
13           class action lawsuit; 
 
14      (2)  In class actions or de facto class actions where both
 
15           direct and indirect purchasers are involved, or where
 
16           more than one class of indirect purchasers are
 
17           involved, a defendant shall be entitled to prove as a
 
18           partial or complete defense to a claim for compensatory
 
19           damages that the illegal overcharge has been passed on
 
20           or passed back to others who are themselves entitled to
 
21           recover so as to avoid the duplication of recovery of
 
22           compensatory damages; 
 
23      (3)  That portion of threefold damages in excess of
 

 
Page 3                                                     2437
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           compensatory damages shall be apportioned and allocated
 
 2           by the court in its exercise of discretion so as to
 
 3           promote effective enforcement of this chapter and
 
 4           deterrence from violation of its provisions; 
 
 5      (4)  In no event shall an indirect purchaser be awarded less
 
 6           than the full measure of compensatory damages
 
 7           attributable to the indirect purchaser; 
 
 8      (5)  In any lawsuit or lawsuits in which claims are asserted
 
 9           by both direct purchasers and indirect purchasers, the
 
10           court is authorized to exercise its discretion in the
 
11           apportionment of damages, and in the transfer and
 
12           consolidation of cases to avoid the duplication of the
 
13           recovery of damages and the multiplicity of suits, and
 
14           in other respects to obtain substantial fairness;
 
15      (6)  In any case in which claims are being asserted by a
 
16           part of the claimants in a court of this State and
 
17           another part of the claimants in a court other than of
 
18           this State, where the claims arise out of same or
 
19           overlapping transaction or transactions, the court is
 
20           authorized to take all steps reasonable and necessary
 
21           to avoid duplication of recovery of damages and
 
22           multiplicity of suits, and in other respects, to obtain
 
23           substantial fairness; 
 

 
Page 4                                                     2437
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1      (7)  In instances where the attorney general representing
 
 2           indirect purchasers files an action and obtains a
 
 3           judgment or settlement prior to the completion of a
 
 4           direct purchaser's action in courts other than this
 
 5           State, the court shall delay disbursement of the
 
 6           damages until such time as the direct purchaser's suits
 
 7           are resolved to either final judgment, consent decree
 
 8           or settlement, or in the absence of a direct
 
 9           purchaser's lawsuit in the courts other than this State
 
10           by direct purchasers, the expiration of the statute of
 
11           limitations, or in such manner that will minimize
 
12           duplication of damages to the extent reasonable and
 
13           practicable, avoid multiplicity of suit and obtain
 
14           substantial fairness; and 
 
15      (8)  In the event damages obtained by the attorney general
 
16           in a class action or de facto class action remain
 
17           unclaimed by the direct or indirect purchasers, the
 
18           attorney general shall apply to the court and such
 
19           funds shall escheat to the State upon showing that
 
20           reasonable efforts made by the State to distribute the
 
21           funds have been unsuccessful."
 
22      SECTION 3.  Section 480-14, Hawaii Revised Statutes, is
 
23 amended by amending subsection (c) to read as follows:
 

 
Page 5                                                     2437
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1      "(c)  [No person other than the attorney general of the
 
 2 State shall be authorized to bring a class action for indirect
 
 3 purchasers asserting claims under this chapter.]  The attorney
 
 4 general or the director of the office of consumer protection may
 
 5 bring a class action on behalf of consumers based on unfair or
 
 6 deceptive acts or practices declared unlawful by section 480-2.
 
 7 Actions brought under this section shall be brought as parens
 
 8 patriae on behalf of natural persons residing in the State, to
 
 9 secure compensatory damages for injuries sustained by such
 
10 natural persons to their property by reason of any violation of
 
11 this chapter."
 
12      SECTION 4.  Statutory material to be repealed is bracketed.
 
13 New statutory material is underscored.
 
14      SECTION 5.  This Act shall take effect upon its approval.