IN THE SUPREME COURT OF IOWA
No. 21–0831
Submitted April 4, 2023—Filed May 26, 2023
STATE OF IOWA, ex rel., ATTORNEY GENERAL OF IOWA,
Appellee,
vs.
TRAVIS AUTOR, REGENERATIVE MEDICINE AND ANTI-AGING INSTITUTES OF OMAHA, LLC, and OMAHA STEM CELLS, LLC,
Appellants.
Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg,
Judge.
Appellants claim that the district court erred by striking their jury demand
in a civil action under the Iowa Consumer Fraud Act. AFFIRMED AND
REMANDED.
May, J., delivered the opinion of the court, in which all justices joined.
David N. Fautsch (argued), Mark E. Weinhardt, and Nathan D.B. Converse
(until withdrawal) of The Weinhardt Law Firm, Des Moines, for appellants.
Brenna Bird, Attorney General, and Amy Licht (argued), William Pearson,
and J. Andrew Cederdahl, Assistant Attorneys General, for appellee. 2
MAY, Justice.
The Iowa Consumer Fraud Act (CFA), Iowa Code section 714.16 (2020),
authorizes the attorney general to pursue civil enforcement actions. Subsection
714.16(7) requires that these actions “shall be by equitable proceedings.” The
defendants contend that this requirement is unenforceable because it violates
the jury right preserved by article I, section 9 of the Iowa Constitution. We
disagree.
I. Background.
Through the CFA, our legislature has deemed “a variety of bad business
practices unlawful.” State ex rel. Miller v. Cutty’s Des Moines Camping Club, Inc.,
694 N.W.2d 518, 524 (Iowa 2005). But violating the CFA does not “amount[] to
perpetration of a crime.” Grinnell Mut. Reins. Co. v. Jungling, 654 N.W.2d 530,
537 (Iowa 2002) (quoting Molo Oil Co. v. River City Ford Truck Sales, Inc.,
578 N.W.2d 222, 228 (Iowa 1998)). Instead, subsection 714.16(7) authorizes the
attorney general to enforce the CFA through “civil action[s].” Iowa Code
§ 714.16(7). Because subsection 714.16(7) is at the center of this dispute, we
reproduce its full text here:
7. A civil action pursuant to [section 714.16] shall be by equitable proceedings. If it appears to the attorney general that a person has engaged in, is engaging in, or is about to engage in a practice declared to be unlawful by this section, the attorney general may seek and obtain in an action in a district court a temporary restraining order, preliminary injunction, or permanent injunction prohibiting the person from continuing the practice or engaging in the practice or doing an act in furtherance of the practice. The court may make orders or judgments as necessary to prevent the use or employment by a person of any prohibited practices, or which are necessary to restore to any person in interest any moneys or property, real or personal, which have been acquired by means of a 3
practice declared to be unlawful by this section, including the appointment of a receiver in cases of substantial and willful violation of this section. If a person has acquired moneys or property by any means declared to be unlawful by this section and if the cost of administering reimbursement outweighs the benefit to consumers or consumers entitled to the reimbursement cannot be located through reasonable efforts, the court may order disgorgement of moneys or property acquired by the person by awarding the moneys or property to the state to be used by the attorney general for the administration and implementation of this section. Except in an action for the concealment, suppression, or omission of a material fact with intent that others rely upon it, it is not necessary in an action for reimbursement or an injunction, to allege or to prove reliance, damages, intent to deceive, or that the person who engaged in an unlawful act had knowledge of the falsity of the claim or ignorance of the truth. A claim for reimbursement may be proved by any competent evidence, including evidence that would be appropriate in a class action.
In addition to the remedies otherwise provided for in this subsection, the attorney general may request and the court may impose a civil penalty not to exceed forty thousand dollars per violation against a person found by the court to have engaged in a method, act, or practice declared unlawful under this section; provided, however, a course of conduct shall not be considered to be separate and different violations merely because the conduct is repeated to more than one person. In addition, on the motion of the attorney general or its own motion, the court may impose a civil penalty of not more than five thousand dollars for each day of intentional violation of a temporary restraining order, preliminary injunction, or permanent injunction issued under authority of this section. A penalty imposed pursuant to this subsection is in addition to any penalty imposed pursuant to section 537.6113. Civil penalties ordered pursuant to this subsection shall be paid to the treasurer of state to be deposited in the general fund of the state.
Id.
Another statutory provision—the Older Iowans Act (OIA), Iowa Code
section 714.16A—is also relevant here. The OIA augments the CFA. It provides,
“If a person violates [the CFA], and the violation is committed against an older
person [separately defined to mean anyone sixty-five or older], . . . the court may 4
impose an additional civil penalty not to exceed five thousand dollars for each
such violation.” Id. § 714.16A(1)(a), (3). The OIA also lists certain factors that
courts must consider when “determining whether to impose” its additional civil
penalty “and the amount of any such penalty.” Id. § 714.16A(2).
In 2020, the attorney general commenced this civil CFA action against
defendants Travis Autor, Regenerative Medicine and Anti-Aging Institutes of
Omaha, LLC, and Omaha Stem Cells, LLC (defendants).1 The attorney general’s
petition alleged that the defendants had violated the CFA and the OIA by
engaging “in false, misleading, and deceptive conduct and unfair practices in the
sale and advertisement of stem cell and exosome therapy in Iowa.” In its
introduction, the petition announced that “[t]his lawsuit . . . seeks a permanent
injunction against Defendants to stop them from swindling additional Iowa
victims; an order directing them to reimburse money [that] victims spent on bunk
treatments and imposing civil penalties for their false, misleading, and deceptive
conduct and unfair practices; and other relief.” In its final pages, the petition
provided a more specific list of remedies sought. Those remedies included (1) “a
preliminary injunction restraining [d]efendants” and their agents “from engaging
in any of the deceptive, misleading, and unfair practices alleged” in the petition;
(2) a posttrial order “mak[ing] permanent the [preliminary] injunction[],
expanding [its] provisions as necessary by including, inter alia, such ‘fencing in’
provisions as are reasonably necessary to ensure that [d]efendants . . . do not
1Other defendants were also named but they are not parties to this appeal. 5
return to the unlawful practices alleged” in the petition; (3) a judgment against
the defendants “jointly and severally, for amounts necessary to restore to Iowans
all money acquired by means of” violations of the CFA; (4) a judgment against
the defendants “jointly and severally, for such additional funds as are necessary
to ensure complete disgorgement of all ill-gotten gain traceable to the unlawful
practices alleged”; (5) a civil penalty against each defendant “for up to
$40,000.00 for each separate violation” of the CFA; and (6) an additional “civil
penalty of up to $5,000.00” against each defendant under the OIA.
The defendants answered and demanded a jury. The attorney general
moved to strike the jury demand. The motion explained that because subsection
714.16(7) requires that civil actions “shall be by equitable proceedings,” the
defendants are not entitled to a jury trial. Iowa Code § 714.16(7). The defendants
responded that our constitution requires a jury trial because the attorney general
was seeking substantial monetary remedies, including disgorgement beyond net
profits, penalties of up to $40,000 per violation under the CFA, penalties of up
to $5,000 per violation under the OIA, and joint and several liability. The district
court granted the motion to strike. The defendants then applied for interlocutory
review. We granted review and retained the case.
II. Standards for Judicial Review.
Because this case turns on the constitutionality of section 714.16(7)’s
“equitable proceedings” requirement, our review is de novo. State ex rel. Miller v.
Pace, 677 N.W.2d 761, 767 (Iowa 2004). There is a strong presumption that
statutes are constitutional. “A party challenging a statute carries a heavy burden 6
of rebutting the presumption of constitutionality with which statutes are
cloaked.” O’Hara v. State, 642 N.W.2d 303, 314 (Iowa 2002) (finding no
constitutional right to jury trial for actions classified as “special” rather than
“civil”). “The party must negate every reasonable basis upon which the statute
can be upheld as constitutional.” Id. It is an “important and oft-repeated rule”
that “no court is authorized to declare an act of the legislature invalid unless it
is plainly, palpably, and beyond doubt repugnant to some provision of the
constitution.” Littleton v. Fritz, 22 N.W. 641, 646 (Iowa 1885) (evaluating alleged
violation of article I, section 9).
III. Analysis.
A. General Principles. Article I, section 9 of the Iowa Constitution
provides that “[t]he right of trial by jury shall remain inviolate.” The words “shall
remain” mean that the right protected is a right that existed when the
constitution was adopted. Littleton, 22 N.W. at 643. At the time the constitution
was adopted, a jury was available in actions at law, but not in a case “of equitable
cognizance.” Id. Put another way, there was not—and is not—a jury right for
cases within the court’s equitable jurisdiction. See Hedlund v. State, 930 N.W.2d
707, 718 (Iowa 2019) (“Generally, there is no right to a jury trial for cases brought
in equity.”).
The scope of the court’s equitable jurisdiction is not immutable. See
Littleton, 22 N.W. at 644 (“We are not, then, required to examine the laws in force
at the time the constitution was adopted, and hold that in every case which was
then triable by a jury, the right to such trial remains inviolate. Such a 7
construction of the constitutional provision involves too narrow a view of
legislative power.”). In our 1885 Littleton v. Fritz decision, we recognized that the
legislature has power “to enlarge the jurisdiction of a court of equity.” Id. at 645.
We observed without criticism that—since the constitution’s adoption—the
legislature had removed the right to a jury in “actions for divorce” as well as “in
case of the foreclosure of mortgages and mechanics’ liens.” Id. at 644.
At least one of our modern cases has quoted Littleton and confirmed that
the “legislative power” includes a power to expand the range of cases tried
without juries. Iowa Nat’l Mut. Ins. v. Mitchell, 305 N.W.2d 724, 728 (Iowa 1981)
(en banc) (quoting Littleton, 22 N.W. at 644). And at least one distinguished
federal judge has relied on Littleton for the proposition that “the Iowa legislature
has some power to define the nature of a cause of action as equitable and
therefore triable to the court rather than to a jury.” Gray v. Nash Finch Co.,
701 F. Supp. 704, 709 (N.D. Iowa 1988). Other cases also support this view. See,
e.g., Broulik v. Henderson, 254 N.W. 63, 64–65 (Iowa 1934) (rejecting claim that
article I, section 9 required a jury trial in action to collect the statutory
assessment on shares of stock in a bank); Clough v. Seay, 49 Iowa 111, 113
(1878) (rejecting claim that article I, section 9 required a jury trial on issues of
usury and improper alteration of a note). But see McMartin v. Bingham, 27 Iowa
234, 236 (1869) (finding defendant was entitled to jury trial in action on an
account for legal services and disbursements made notwithstanding statute that
provided that “when the trial of an issue of fact shall require the examination of
mutual accounts, or when the account being on one side only, it shall be made 8
to appear to the court that it is necessary that the party on the other side should
be examined as a witness to prove the account, in which case the referees may
be directed to hear and report upon the whole issue, or upon any specific
question of fact involved therein” (emphasis omitted) (quoting Iowa Code Revision
of 1860 § 3090(1) (1860))).
Here we consider whether the legislature acted within its power when it
required that civil CFA actions “shall be by equitable proceedings.” The parties
agree that the answer depends on the essential nature of the cause of action.
See Weltzin v. Nail, 618 N.W.2d 293, 297 (Iowa 2000) (en banc) (rejecting
contention that a jury trial was available in a shareholder derivative suit and
noting that “[w]e look at the essential nature of the cause of action, rather than
solely at the remedy, to determine if a party is entitled to a jury trial” (quoting
Carstens v. Cent. Nat’l Bank & Tr. Co. of Des Moines, 461 N.W.2d 331, 333 (Iowa
1990))). Other states have made similar inquiries when determining whether a
jury right exists for actions under their consumer protection statutes. See
Karen K. Peabody, Constitutional Right to Jury Trial in Cause of Action Under State
Unfair or Deceptive Trade Practices Law, 54 A.L.R. 5th 631 (1997) (“In a large
number of cases, courts have reasoned that whether the right to a jury trial is
granted depends upon the court’s determination of the nature of the underlying
claim.”). And we think this kind of approach is consistent with our relevant
caselaw.
Broulik v. Henderson, 254 N.W. 63, provides helpful guidance. In Broulik,
the receiver of an insolvent bank brought an action against the bank’s 9
stockholders “to collect the statutory assessment on the shares of stock.” Id. at
64. Although the suit was obviously aimed at collecting money, the receiver
brought the suit in equity. Id. This was authorized by a statute that said, in
pertinent part, that the “receiver of any [insolvent bank] may maintain an action
in equity to determine the liability of the stockholders, and the amount to which
each creditor shall be entitled.” Id. (emphasis added) (quoting Iowa Code § 9253
(1931)). But a shareholder argued that article I, section 9 entitled him to a
separate trial at law. Id. In evaluating this argument, we distinguished prior
cases that had not involved “statutory provisions permitting the actions to be
brought in equity.” Id. at 65. Instead, we believed that the proper test was this:
“Unless a suit to determine the liability of a stockholder to an assessment is
inherently an action at law, the statute is a sufficient warrant for the
commencement of this action in equity and for its prosecution to final judgment
in a court of equity.” Id. (emphasis added). In applying this test, we noted that
“determination of the necessity for an assessment and the amount thereof”
would require a “complete examination” of the insolvent bank’s “assets” and
“liabilit[ies].” Id. These determinations, we said, were “quite generally regarded
as the proper task of a court of equity, on account of the superiority of its
procedure in such matters.” Id. And so, we concluded, it “was competent for the
Legislature to provide for the complete disposition of the litigation in equity.” Id.
Weltzin v. Nail, 618 N.W.2d 293, is also helpful. There we considered
whether a stockholder derivative action seeking damages from a former manager
of the corporation was triable to a jury at the plaintiffs’ request. Id. at 296. We 10
held it was not. Id. at 302–03. We noted that the stockholder derivative action
did not exist at common law and that the plaintiffs’ request for damages remedies
was not determinative. Id. at 297. We also expressly rejected the federal Seventh
Amendment approach that parsed stockholder derivative actions into legal and
equitable components and afforded a jury trial on the legal components. Id. at
299–300. Instead, we focused on the “essential nature of the cause of action,”
which we deemed to be equitable. Id. at 297 (emphasis omitted) (quoting
Carstens, 461 N.W.2d at 333).
B. Application. Applying Broulik and Weltzin’s approach here, we do not
conclude that the CFA civil action is inherently an action at law. Rather, the
essential nature of the action is equitable. Accordingly, we believe it was
competent for the legislature to provide for “the complete disposition” of CFA civil
actions through “equitable proceedings.” Broulik, 254 N.W. at 65; see Iowa Code
§ 714.16(7).
Injunctive relief is at the center of CFA civil actions. Subsection 714.16(7)
specifically authorizes three different kinds of injunctive relief: “a temporary
restraining order,” “preliminary injunction,” and “permanent injunction.” Iowa
Code § 714.16(7). Another injunction-like power is also granted: “The court may
make orders or judgments as necessary to prevent the use or employment by a
person of any prohibited practices . . . .” Id. Moreover, on its own motion or the
attorney general’s, “the court may” enforce the injunctions “issued under
authority of” section 714.16 by imposing “civil penalt[ies]” for “each day of
intentional violation.” Id. 11
These tasks—issuing and enforcing injunctions—invoke the court’s
equitable powers. See Max 100 L.C. v. Iowa Realty Co., 621 N.W.2d 178, 181
(Iowa 2001) (en banc) (“Generally, the issuance of an injunction invokes the
equitable powers of the court and courts apply equitable principles.”); see also,
e.g., Mitchell v. Robert De Mario Jewelry, Inc., 361 U.S. 288, 291–92 (1960)
(“When Congress entrusts to an equity court the enforcement of prohibitions
contained in a regulatory enactment, it must be taken to have acted cognizant
of the historic power of equity to provide complete relief in light of the statutory
purposes.”); State ex rel. Dep’t of Ecology v. Anderson, 620 P.2d 76, 78 (Wash.
1980) (en banc) (“Where a governmental body seeks to enjoin the commission of
acts made illegal by statute, it is the court’s equity jurisdiction that is invoked.”).
To paraphrase Broulik, injunctions are proper tasks of a court of equity.
254 N.W. at 65. This suggests that civil CFA actions are not “inherently . . .
action[s] at law.” Id.; see State by Humphrey v. Alpine Air Prods., Inc., 490 N.W.2d
888, 895 (Minn. Ct. App. 1992), aff’d, 500 N.W.2d 788 (Minn. 1993) (en banc)
(finding no jury right in consumer fraud and antitrust action and noting that
“[i]njunctive relief is primarily equitable in nature”).
Moreover, although subsection 714.16(7) authorizes monetary remedies
like restoration and civil penalties, none of those remedies are mandatory.
Subsection 714.16(7) does not mention damages or similar remedies that are
typically available as of right. Nor does it say that any monetary remedies “must”
or “shall” be awarded. Rather, subsection 714.16(7) says that “the court may” 12
order certain remedies.2 And “may” suggests that the court has discretion. See
State v. Iowa Dist. Ct., ___ N.W.2d ___, ___, 2023 WL 3028128, at *3 (Iowa
Apr. 21, 2023) (noting that the legislature’s “use of ‘may’ only ‘confers a power’
that is discretionary” (quoting Iowa Code § 4.1(30)(c) (2021))). In this regard,
monetary remedies under subsection 714.16(7) are roughly analogous to spousal
support under section 598.21A or domestic-abuse remedies under section
236.5(1)(b). In all three situations, the legislature’s use of “may” suggests that
the court has some latitude when weighing relevant circumstances and
determining whether—and to what degree—statutorily-authorized remedies are
appropriate. See, e.g., In re Marriage of Mills, 983 N.W.2d 61, 67 (Iowa 2022)
(“Although we review claims related to spousal support de novo, ‘we have
emphasized that “we accord the trial court considerable latitude.” ’ ” (quoting In
re Marriage of Gust, 858 N.W.2d 402, 406 (Iowa 2015))); Fishel v. Redenbaugh,
939 N.W.2d 660, 663 (Iowa Ct. App. 2019) (discussing the court’s discretion as
to awards of support in chapter 236 cases). This latitude suggests that CFA civil
actions are equitable. Gray, 701 F. Supp. at 708–09 (finding “no constitutional
right to a jury trial” as to emotional distress claim under Iowa Code section
601A.15(8) because relief was “discretionary and not a matter of right”).
Finally, we note that “[t]he majority of courts . . . have held that no
constitutional right to a jury trial arose under [their] state’s unfair or deceptive
trade practices act.” Peabody, 54 A.L.R. 5th 631; see also People v. Shifrin,
2Likewise, the OIA says that “the court may impose” a civil penalty. Iowa Code
§ 714.16A(1)(a). 13
342 P.3d 506, 512 (Colo. App. 2014) (noting that “[t]he majority of courts in other
jurisdictions have concluded that similar consumer protection actions are
primarily equitable”). Several courts have found no jury-trial right even though
their consumer protection acts permit financial consequences such as civil
penalties, restitution, and even damages. See, e.g., Associated Inv. Co. Ltd. P’ship
v. Williams Assocs. IV, 645 A.2d 505, 510–11 (Conn. 1994) (finding no jury right
for claims under a consumer protection act that authorized punitive damages
and attorney fees); Martin v. Heinold Commodities, Inc., 643 N.E.2d 734, 755 (Ill.
1994) (finding no jury right for claims under a consumer protection act that
allowed recovery of money damages); see also Alpine Air Prods., Inc., 490 N.W.2d
at 895 (finding no jury right in consumer fraud and antitrust action in appeal
following trial court award of $70,000 in civil penalties).
For example, the Nebraska Supreme Court has reasoned that because the
“principal thrust” of Nebraska’s consumer protection act is “to prevent unfair or
deceptive acts or practices in trade or commerce,” the Nebraska act “is equitable
in nature, in the sense that it seeks to prevent prejudicial conduct rather than
merely compensate such damage as may flow therefrom.” State ex rel. Douglas
v. Schroeder, 384 N.W.2d 626, 629–30 (Neb. 1986). And even though Nebraska’s
act “permits the recovery of an attorney fee, restoration of the purchase price,
and the imposition of civil penalties,” the Nebraska court concluded that those
“monetary consequences” serve “to discourage future like acts and practices
[and] are ancillary to the act’s principal equitable thrust.” Id. We think similar
observations apply to Iowa’s CFA and OIA. By authorizing monetary 14
consequences, these statutes advance equitable and remedial purposes,
including protecting Iowans by encouraging compliance with the law. See First
Iowa State Bank v. Iowa Dep’t of Nat. Res., 502 N.W.2d 164, 166 (Iowa 1993)
(holding that environmental protection statute was properly considered remedial
rather than penal and noting that its “civil penalty provision is essentially
regulatory and intended to secure compliance with the statute”); see also State
v. Ralph Williams’ N.W. Chrysler Plymouth, Inc., 510 P.2d 233, 242 (Wash. 1973)
(en banc) (“The legislature has wide discretion in the choice of remedies to
promote compliance with a law, and providing for fines in a civil proceeding does
not convert the proceeding to a criminal or penal one.”).
C. Counterarguments. We have carefully considered all of the defendants’
counterarguments. Although most of those arguments have been anticipated
and addressed through what has already been said, we offer some additional
comments here.
1. Comparisons. The defendants compare CFA civil actions with two classic
“at law” actions: criminal anti-fraud prosecutions and common law tort suits.
But CFA civil actions aren’t like either of those. Since our 1974 decision in
Lenertz v. Municipal Court, we’ve rejected the idea that the CFA is a criminal
statute. 219 N.W.2d 513, 516 (Iowa 1974). And although the CFA has been
amended since 1974, it still doesn’t authorize criminal punishments like jail or
prison. Cf. Sarich v. Havercamp, 203 N.W.2d 260, 268 (Iowa 1972) (finding the
district court erred in refusing jury trial demand for contempt proceedings in
which alleged contemptor “was exposed to a fine of $14,000 maximum or 15
imprisonment for a maximum term of 14 years”). And although the CFA is
codified in the same part of the Iowa Code as criminal statutes, that doesn’t
change the civil and equitable nature of CFA actions. Consider Littleton, in which
we upheld a provision that permitted citizens to “maintain an action in equity to
abate and perpetually enjoin” the “nuisance” created by illegal saloons. 22 N.W.
at 642 (emphasis added) (quoting Iowa Code § 1543 (McClain ed. Supp. 1884)).
We upheld that provision even though it was codified within a statute that
provided for the imprisonment of saloon keepers. Id. at 642–43.
Likewise, we have long held that CFA civil actions are not the same as
common law fraud actions. State ex rel. Miller v. Hydro Mag, Ltd., 436 N.W.2d
617, 622 (Iowa 1989) (“We conclude the Iowa Consumer Fraud Act was not
merely a codification of common-law fraud. The Consumer Fraud Act provides
broader protection to the citizens of Iowa by eliminating common-law fraud
elements of reliance and damages.”). Most importantly, perhaps, although
successful tort plaintiffs are entitled to damages proven, the court has latitude
when determining whether (and to what degree) remedies under the CFA and
OIA are appropriate.3
3Subsection 714.16(11) is an exception. It provides that “[i]n an action brought under [section 714.16], the attorney general is entitled to recover costs of the court action and any investigation which may have been conducted, including reasonable attorneys’ fees, for the use of this state.” Iowa Code § 714.16(11) (emphasis added). In State ex rel. Miller v. Fiberlite Int’l, Inc., we held that this language precluded any discretion to deny the State’s request for “reasonable attorney fees and investigative costs incurred by the State in successfully prosecuting [a] consumer fraud action.” 476 N.W.2d 46, 48 (Iowa 1991). But defendants do not argue—and we do not believe—that this changes the inherent nature of the CFA civil actions. If anything, this exception “proves the rule” that most CFA remedies are equitable and discretionary. 16
2. Remedies. The defendants’ central theory is that because the monetary
remedies available in CFA actions are legal, a jury must be available. We disagree
for several reasons.
As discussed, we believe the jury right depends on the essential nature of
the action and, more specifically, whether the cause of action is inherently legal.
For the reasons explained, we conclude that the CFA civil action is not inherently
legal. Rather, its essential nature is equitable.
As for the specific question of remedies: when we consider the remedies
available under the CFA and the OIA as a whole, we believe they are equitable in
character. Although the defendants say that some of those remedies (especially
the civil penalties and disgorgement) are punitive, we look at them through a
different lens. We agree with the attorney general that those remedies are aimed
at equitable and remedial goals of making victims whole, extracting ill-gotten
gains, and “protecting Iowa consumers” by encouraging compliance with the law.
See, e.g., State ex rel. Miller v. Vertrue, Inc., 834 N.W.2d 12, 45 (Iowa 2013) (noting
the OIA’s “self-evident goal of protecting Iowa consumers who are vulnerable to
unfair sales tactics because of their age”).
Moreover, we have generally declined to parse the remedies sought to see
if some of them might be characterized as legal. We’ve made it plain that “[t]he
fact that an action seeks monetary relief does not necessarily define the action
as one at law.” Carstens, 461 N.W.2d at 333; see Hedlund, 930 N.W.2d at 718
(same). Rather, Iowa law recognizes that “[o]nce equity has obtained jurisdiction
of a controversy[,] the court will determine all questions material or necessary to 17
accomplish full and complete justice between the parties, even though in doing
so the court may be required to pass upon certain matters ordinarily cognizable
at law.” Weltzin, 618 N.W.2d at 298 (quoting In re Marriage of Stogdill,
428 N.W.2d 667, 670 (Iowa 1988)). Or, to put it more simply, “[e]quity may
determine all matters both legal and equitable when the controversy is properly
before it.” Id. (quoting Grandon v. Ellingson, 144 N.W.2d 898, 901 (Iowa 1966)).
So even if some of the CFA’s remedies were properly classified as legal, the court
could still award them under its authority to “determine all questions material
or necessary to accomplish full and complete justice between the parties.” Id.
(quoting In re Marriage of Stogdill, 428 N.W.2d at 670).
Indeed, even if we were to characterize CFA or OIA remedies as punitive,
this would not prevent an equity court from awarding them. In Weltzin, we held
that “punitive damages” are “within the purview of the equity court.” Id. at 300.
In Holden v. Construction Machinery Co., we confirmed that—even without actual
damages—“an equity court may, in its discretion, award exemplary damages
upon a showing that some legally protected right has been invaded, such as an
intentional act of fraud or other wrongful conduct.” 202 N.W.2d 348, 359 (Iowa
1972). In Charles v. Epperson & Co., “[w]e [held] that an equity court may in its
discretion award exemplary damages for an intentional act of fraud.” 137 N.W.2d
605, 618 (Iowa 1965). The court may do so “to punish the wrongdoer and set an
example.” Id.
3. Joint and several liability. We have also considered the defendants’
complaint that—in this particular case—the attorney general seeks joint and 18
several liability. As the defendants note, though, the phrase “joint and several”
does not appear in section 714.16(7) or the OIA. And we consider it an open
question as to whether joint and several liability is available as to the remedies
authorized in section 714.16(7) or the OIA. But cf. State ex rel. Miller v. Fiberlite
Int’l, Inc., 476 N.W.2d 46, 48 (Iowa 1991) (reversing and remanding for entry of
judgment of attorney fees and costs under section 714.16(11) “joint and several
against all defendants”). Assuming it is, though, it would not change the result
here. We are not convinced that joint and several liability is inherently
incompatible with equitable jurisdiction. Compare FTC v. Com. Planet, Inc.,
815 F.3d 593, 600 (9th Cir. 2016) (“Equity courts have long exercised the power
to impose joint and several liability, most notably in cases involving breach of
the duties imposed by trust law.”), abrogated on other grounds by AMG Cap.
Mgmt., LLC v. FTC, 141 S. Ct. 1341 (2021), and 4 John Norton Pomeroy, A
Treatise on Equity Jurisprudence § 1081, at 231–32 (5th ed. 1941) (noting the
“firmly settled” rule that multiple trustees can be “liable jointly and severally” for
a breach of trust), with Liu v. SEC, 140 S. Ct. 1936, 1945 (2020) (“Equity courts
also generally awarded profits-based remedies against individuals or partners
engaged in concerted wrongdoing, not against multiple wrongdoers under a joint-
and-several liability theory.”).
4. Irrelevance of injunctive relief. The defendants also suggest that even if
CFA civil actions are generally compatible with equity, this case isn’t because the
defendants are already out of business and, therefore, injunctive relief is
irrelevant. We disagree. First, we do not think that the constitutionality of the 19
legislature’s “equitable proceedings” command should turn on whether the
defendants claim to have stopped their allegedly unlawful actions. Rather, we
think the analysis should turn on the inherent nature of CFA civil actions as
codified. And, as codified, the CFA civil action is largely centered on enjoining
misconduct, a traditional function of equity.
Moreover, in this particular case, the attorney general has sought—and
continues to seek—injunctive relief. And by its plain terms, the statute permits
injunctive relief whenever it appears “a person has engaged in, is engaging in, or
is about to engage in” unlawful practices. Iowa Code § 714.16(7) (emphasis
added). So the defendants’ claim that they have given up their allegedly-unlawful
business is immaterial. The attorney general may seek an injunction based on
the defendants’ alleged prior misconduct.
5. Federal jurisprudence. Finally, we have considered the defendants’
argument that a jury might be required under the federal courts’ Seventh
Amendment jurisprudence. It is undisputed, however, that the Seventh
Amendment does not apply to states. Savala v. State, 982 N.W.2d 667, 670 (Iowa
2022); Channon v. United Parcel Serv., Inc., 629 N.W.2d 835, 852 (Iowa 2001).
And in Weltzin, we chose “not to extend the Supreme Court’s holding in relation
to the Seventh Amendment to shareholder’s derivative suits brought in Iowa.”
Weltzin, 618 N.W.2d at 300. Likewise, we decline to rely on federal precedents
here. We believe Iowa’s own precedents strike an appropriate balance between
the legislative power under article III of the Iowa Constitution and the jury right
preserved under article I, section 9 of the Iowa Constitution. 20
IV. Additional Issues.
The defendants raise two additional issues. First, the defendants suggest
that even if we determine that CFA actions should be tried in equity (as we have),
we should limit the remedies available. Specifically, the defendants suggest we
should refuse to allow the attorney general to pursue civil penalties,
disgorgement of gross receipts (rather than just profits), and joint and several
liability. We disagree. For the reasons explained, we do not believe that the
remedies available under the CFA or the OIA are inherently incompatible with
equitable proceedings. So we see no basis to limit those remedies at this stage.
Of course, as in any equity case, our review of any final order would be de novo.
See, e.g., Vertrue, Inc., 834 N.W.2d at 45.
Finally, the defendants suggest that even if we enforce the CFA’s
requirement of equitable proceedings, we should require bifurcation. Specifically,
the defendants suggest that we require a jury to determine liability and then
permit a judge to determine remedies. We disagree. The Code plainly requires
“equitable proceedings” for civil CFA actions. Iowa Code § 714.16(7). The Code
does not authorize a jury’s involvement in any phase of a civil CFA action. And
we do not believe that the constitution prohibits us from enforcing the CFA as
written.
V. Caveat.
It is important to recognize that this opinion only addresses the cause of
action available to the attorney general under section 714.16. A separate
provision—that is not at issue in this case—permits consumers to “bring an 21
action at law to recover actual damages” as well as “equitable relief” under the
CFA. Iowa Code § 714H.5(1). Nothing we have said in this opinion applies to this
separate private cause of action.
VI. Conclusion.
The district court was right to strike the defendants’ jury demand. We
affirm and remand for further proceedings.
AFFIRMED AND REMANDED.