FILE THIS OPINION WAS FILED FOR RECORD AT 8 A.M. ON IN CLERK’S OFFICE SEPTEMBER 24, 2020 SUPREME COURT, STATE OF WASHINGTON SEPTEMBER 24, 2020 SUSAN L. CARLSON SUPREME COURT CLERK
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
) DUANE YOUNG, an individual, ) and all those similarly situated, ) ) Petitioner, ) No. 97576-1 ) v. ) ) TOYOTA MOTOR SALES, U.S.A., ) a California corporation, ) ) Respondent. ) Filed September 24, 2020 ________________ _______________________________)
GONZÁLEZ, J.— “Buyer beware” is not the law in the State of Washington.
Instead, our Consumer Protection Act (CPA) prohibits unfair or deceptive acts or
practices in trade or commerce. RCW 19.86.020. To prevail on a private CPA
claim, a plaintiff must establish five elements, the first of which is “an unfair or
deceptive act or practice.” Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 37,
204 P.3d 885 (2009) (citing Hangman Ridge Training Stables, Inc. v. Safeco Title
Ins. Co., 105 Wn.2d 778, 784, 719 P.2d 531 (1986)). Over the years, some
authorities have concluded that to prove this first element, the plaintiff necessarily
has to prove that the unfair or deceptive act or practice was material in some way. Young v. Toyota Motor Sales, USA, No. 97576-1
That conclusion mistakes the sufficient for the necessary. While materiality might
be relevant as a matter of fact in some cases, it is not categorically required as a
matter of law in all.1
FACTS
After a long search for his ideal vehicle, Duane Young bought a new 2014
Toyota Tacoma pickup truck with a limited package of additional features from a
dealership in Burlington, Washington. Young paid about $36,000 for the truck. At
the time Young was researching his purchase, the Toyota website, Toyota’s
advertising, and the Monroney label 2 for the 2014 Toyota Tacoma with the limited
package incorrectly asserted that the vehicle had an outside temperature display on
the rearview mirror along with some other displays. Some of the displays had been
1 A “claim under the Washington CPA may be predicated upon a per se violation of statute, an act or practice that has the capacity to deceive substantial portions of the public, or an unfair or deceptive act or practice not regulated by statute but in violation of public interest.” Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 787, 295 P.3d 1179 (2013). For example, we found a trustee’s “fail[ure]to exercise its independent discretion as an impartial third party with duties to both parties” in nonjudicial foreclosure satisfied the first element. Id. at 792. We have also found that deceptive debt collection notices sent to many consumers meets the first element. Panag, 166 Wn.2d at 54-55. Similarly, a practice of naming a business as the beneficiary of a deed of trust when it did not meet the statutory definition of a beneficiary was presumptively sufficient to satisfy this first element. Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 88-89, 117, 285 P.3d 34 (2012). 2 A Monroney label “is a label that is required in the United States to be displayed on all new vehicles, and it includes certain official information; for example, standard equipment, optional equipment, crash test rating, fuel economy info[rmation], and a manufacturer’s suggested retail price.” 2 Verbatim Report of Proceedings (Aug. 1, 2017) at 251. 2 Young v. Toyota Motor Sales, USA, No. 97576-1
moved to the dashboard, but the outside temperature display was no longer
available.
A Toyota Tacoma truck with the colors and features Young wanted was not
available in Eugene, Oregon, where he lived. Young called dealerships in
Washington and Oregon until he found what he wanted in Burlington. He
negotiated the purchase over the phone, paid a deposit, and, on October 30, 2013,
flew to Burlington to pick up his truck.
Shortly before Young flew to Burlington, Toyota Motor Sales U.S.A.
(Toyota) realized that its advertising was incorrect and that some 2014 Toyota
Tacoma trucks had been shipped with an incorrect Monroney label. On October
22, 2013, the company notified its regional representatives of the error, and the
next day made new Monroney labels available to be printed. By the end of the
month, Toyota had updated its online advertising. The price of the vehicle did not
change. Before the error was corrected, 147 vehicles, including three in
Washington State, were sold with the representation that they had the enhanced
rearview mirror with the temperature display when they did not.
After realizing its mistake, Toyota offered $100 compensation to each
consumer who had purchased a truck without the advertised feature. This was ten
times the cost to Toyota of installing the outside temperature gauge during
3 Young v. Toyota Motor Sales, USA, No. 97576-1
manufacturing. Young declined that offer and several others, including an offer to
replace the display with aftermarket equipment.
After the parties were unable to negotiate a satisfactory resolution, Young
brought a CPA suit against Toyota, along with other claims that are not before us.
The case went to a two-day bench trial. The trial judge returned a defense verdict.
The judge found that Young had failed to prove the first element of his CPA claim
because he had not shown Toyota’s false statements of fact about the vehicle had
the capacity to deceive a substantial portion of the public. The judge also found,
among other things, that Young had failed to prove public interest; causation;
injury; or that Toyota had violated the automobile dealers practices act, ch. 46.70
RCW.
The Court of Appeals affirmed by divided opinion. Young v. Toyota Motor
Sales, U.S.A., 9 Wn. App. 2d 26, 442 P.3d 5 (2019). Relying in part on federal
precedent and administrative opinions interpreting the Federal Trade Commission
(FTC) Act, the majority below held that to be unfair or deceptive for purposes of
the CPA, a misstatement of fact must be material. Id. at 33-35 (citing Cliffdale
Assocs., 103 F.T.C. 110, app. at 174-84 (F.T.C. 1984)). The Court of Appeals
concluded the display, with an estimated value of $10, was financially immaterial
to a $36,000 transaction and Young had not established it was material in any other
way. Id. at 35-36. Judge Fearing joined in result but did not join the majority
4 Young v. Toyota Motor Sales, USA, No. 97576-1
opinion. Id. at 43 (Fearing, J., concurring). Instead, he wrote separately, noting
that no Washington State Supreme Court case had held that to be unfair or
deceptive under the CPA, an affirmative misrepresentation of fact must be
material. Id. at 40-42 (Fearing, J., concurring). We granted review.
ANALYSIS
Under Washington’s CPA, “unfair or deceptive acts or practices in the
conduct of any trade or commerce are . . . unlawful.” RCW 19.86.020. The
legislature has directed that the CPA “be liberally construed that its beneficial
purposes may be served.” RCW 19.86.920. Both our attorney general and injured
plaintiffs may enforce the CPA. RCW 19.86.080, .090. To prevail, a private
plaintiff must establish “(1) an unfair or deceptive act or practice, (2) occurring in
trade or commerce, (3) affecting the public interest, (4) injury to a person’s
business or property, and (5) causation.” Panag, 166 Wn.2d at 37 (citing
Hangman Ridge, 105 Wn.2d at 784). “[A] claim under the Washington CPA may
be predicated upon a per se violation of statute, an act or practice that has the
capacity to deceive substantial portions of the public, or an unfair or deceptive act
or practice not regulated by statute but in violation of public interest.” Klem v.
Wash. Mut. Bank, 176 Wn.2d 771, 787, 295 P.3d 1179 (2013).
We will sustain findings of fact if substantial evidence supports them.
Soltero v. Wimer, 159 Wn.2d 428, 433, 150 P.3d 552 (2007) (citing Nordstrom
5 Young v. Toyota Motor Sales, USA, No. 97576-1
Credit, Inc. v. Dep’t of Revenue, 120 Wn.2d 935, 942, 845 P.2d 1331 (1993)). The
unchallenged findings here are verities on appeal. See Humphrey Indus., Ltd. v.
Clay St. Assocs., LLC, 176 Wn.2d 662, 675, 295 P.3d 231 (2013) (citing Davis v.
Dep’t of Labor & Indus., 94 Wn.2d 119, 123, 615 P.2d 1279 (1980)). Questions of
law are reviewed de novo. Schroeder v. Excelsior Mgmt. Grp., LLC, 177 Wn.2d
94, 104, 297 P.3d 677 (2013) (citing Dreiling v. Jain, 151 Wn.2d 900, 908, 93 P.3d
861 (2004)).
1. UNFAIR OR DECEPTIVE ACTS
Where, as here, the relevant operative facts are undisputed, whether that act
or practice is “unfair or deceptive” is a question of law. See Leingang v. Pierce
County Med. Bureau, Inc., 131 Wn.2d 133, 150, 930 P.2d 288 (1997). “A plaintiff
need not show the act in question was intended to deceive, only that it had the
capacity to deceive a substantial portion of the public.” Panag, 166 Wn.2d at 47
(citing Leingang, 131 Wn.2d at 150). “Deception exists ‘if there is a
representation, omission or practice that is likely to mislead’ a reasonable
consumer.” Id. at 50 (quoting Sw. Sunsites, Inc. v. Fed. Trade Comm’n, 785 F.2d
1431, 1435 (9th Cir. 1986)).
To satisfy the first element of a CPA claim, a plaintiff need not show that
they—or anyone—was in fact deceived. Panag, 166 Wn.2d at 47; Indoor
Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 162 Wn.2d 59, 74-75, 170
6 Young v. Toyota Motor Sales, USA, No. 97576-1
P.3d 10 (2007). Instead, the plaintiff must establish that the unfair or deceptive act
or practice had the capacity to deceive a substantial portion of the public. Panag,
166 Wn.2d at 47 (citing Leingang, 131 Wn.2d at 150). This is consistent with the
foundational case, Hangman Ridge, where we observed that “[t]he purpose of the
capacity-to-deceive test is to deter deceptive conduct before injury occurs.” 105
Wn.2d at 785 (citing Jeffrey M. Koontz, Washington Lawyers under the Purview
of the State Consumer Protection Act—The “Entrepreneurial Aspects” Solution—
Short v. Demopolis, 103 Wn. 2d 52, 691 P.2d 163 (1984), 60 WASH. L. REV. 925,
944 (1985)).
Nor is there a need to prove reliance to establish the first element. State v.
Ralph Williams’ N. W. Chrysler Plymouth, Inc., 87 Wn.2d 298, 317, 553 P.2d 423
(1976) (finding numerous false statements in advertisements violated the CPA)
(citing Vacu-Matic Carburetor Co. v. Federal Trade Comm’n, 157 F.2d 711 (7th
Cir. 1946)); Panag, 166 Wn.2d at 47 (finding mailings sent in an attempt to collect
subrogation amounts from insureds were deceptive because they “may induce
people to remand payment in the mistaken belief they have a legal obligation to do
so”).
Similarly, materiality is not a necessary component of the first element. See
Hangman Ridge, 105 Wn.2d at 785. While we have mentioned materiality in
passing, generally in noting that a deceptive framing or omitted fact was
7 Young v. Toyota Motor Sales, USA, No. 97576-1
sufficiently material to establish the element, we have never found materiality was
necessary as a matter of law. See, e.g., Indoor Billboard, 162 Wn.2d at 65-66, 78.
We specifically reject that proposition now.
The misapprehension that materiality is necessary (as opposed to merely
sufficient) seems to have arisen from an out-of-context-statement in an overruled
case, Hiner v. Bridgestone/Firestone, Inc., 91 Wn. App. 722, 730, 959 P.2d 1158
(1998), rev’d in part, 138 Wn.2d 248, 978 P.2d 505 (1999). The Hiner court said
in passing that “[i]mplicit in the definition of ‘deceptive’ is the understanding that
the actor misrepresented something of material importance.” Id. (emphasis
omitted) (citing Potter v. Wilbur-Ellis Co., 62 Wn. App. 318, 327, 814 P.2d 670
(1991)). But both Hiner and the case it relied on, Potter, concerned an omitted
fact, not a positive misrepresentation. Id. (citing Potter, 62 Wn. App. at 327
(finding it is “unfair or deceptive” to “fail[] to reveal a material fact known to the
seller . . . that the seller in good faith [was] bound to disclose”)); Potter, 62 Wn.
App. at 327 (finding a seller’s failure to reveal a known material fact that the seller
in good faith is bound to disclose may be classified as an unfair or deceptive act
due to its inherent capacity to deceive).3 Neither of these cases speak to an
3 Several Court of Appeals opinions have followed Hiner and Potter on this point in dicta. See, e.g., State v. Kaiser, 161 Wn. App. 705, 719, 254 P.3d 850 (2011); Stephens v. Omni Ins. Co., 138 Wn. App. 151, 166, 159 P.3d 10 (2007), aff’d sub nom. Panag, 166 Wn.2d 27; Holiday Resort Cmty. Ass’n v. Echo Lake Assocs., LLC, 134 Wn. App. 210, 226, 135 P.3d 499 (2006). This court quoted Kaiser’s summary of the requirements in Bain, 175 Wn.2d at 115-16 (quoting 8 Young v. Toyota Motor Sales, USA, No. 97576-1
affirmative misrepresentation of fact. As our attorney general noted, “Here, the
Court is not addressing whether an omission of fact known to a seller is material;
rather, just the converse: Toyota marketed a feature on certain vehicles that was
not actually included in the sale.” Amicus Br. of Att’y Gen. for State of Wash. at
8. Given the short duration of the mistake, this is a close call. However, we hold
that Toyota’s affirmative misrepresentation in advertising had the capacity to
deceive a substantial portion of the public.
Toyota notes, correctly, that under analogous federal consumer protection
law, a showing of materiality may be required. Cliffdale Assocs., 103 F.T.C., app.
at 175-76. Since at least 1983, the FTC has interpreted its organic act as requiring
any deception be material. Id. (citing FTC’s 1983 policy statement on deception).
Our CPA was modeled on federal consumer protection law, and we do often look
to federal laws for guidance. Klem, 176 Wn.2d at 787 (citing RCW 19.86.920).
But when Washington law is different from its federal counterpart, we give effect
to Washington law. See, e.g., State v. LG Elecs., Inc., 186 Wn.2d 1, 9-11, 375 P.3d
636 (2016) (declining to follow the federal statute of limitations analysis based on
the plain language and legislative history of our CPA); Klem, 176 Wn.2d at 787
(“Although we have been guided by federal interpretations, Washington has
Kaiser, 161 Wn App. at 719). The issue there was whether it was false or deceptive to designate Mortgage Electronic Registration System Inc. as the beneficiary for purposes of the deed of trust act when it did not meet the statutory requirements. Materiality was not at issue. 9 Young v. Toyota Motor Sales, USA, No. 97576-1
developed its own jurisprudence regarding application of Washington’s CPA.”).
The 1983 FTC policy requiring a showing of materiality predates our leading case,
Hangman Ridge, and despite that policy being in existence at the time we
formulated the elements of a private CPA claim, we did not adopt it. Our
legislature has not amended the CPA in response.
A material misrepresentation is likely sufficient to satisfy the first element of
a CPA action. But merely because something is sufficient in one case does not
make it necessary in the next. “Unfair or deceptive” must be liberally construed.
RCW 19.86.920. “‘It is impossible to frame definitions which embrace all unfair
practices. There is no limit to human inventiveness in this field. Even if all known
unfair practices were specifically defined and prohibited, it would be at once
necessary to begin over again.’” Klem, 176 Wn.2d at 786 (internal quotation
marks omitted) (quoting Panag, 166 Wn.2d at 48).
It is undisputed and unchallenged that for nearly two months, both the
Monroney label on the 2014 limited package Toyota Tacoma and its advertising
stated it included an outside temperature gauge and display when it did not.
Toyota’s affirmative misrepresentation had the capacity to deceive a substantial
portion of the public and was thus sufficient to meet the first element.
10 Young v. Toyota Motor Sales, USA, No. 97576-1
2. CAUSATION AND RELIANCE
We turn now to whether the trial court erred in finding Young did not prove
Toyota’s acts caused him injury. Finding no error, we affirm.
Young does not challenge the underlying factual determinations the trial
judge made in ruling that he failed to show causation. The trial court found that
Young was not charged for the missing temperature gauge and display. The trial
judge found Young’s testimony that he was induced to buy the car because of the
missing temperature gauge was not credible for seven separate reasons. Instead,
the trial judge found that Young’s actions were “much more consistent with
someone who learned that Toyota had made a mistake and wanted to take
advantage of it, than someone who relied upon that item in good faith, and then did
very little until Toyota actually admitted their error.” Clerk’s Papers at 415.
While the details in these findings were not included in the formal findings of fact
and conclusions of law, they are all set forth in the trial judge’s memorandum
decision and were not challenged. As the findings of fact are consistent with the
judge’s memorandum decision, the findings are read in light of that memorandum
decision. Abbott Corp. v. Warren, 53 Wn.2d 399, 402, 333 P.2d 932 (1959) (citing
Browning v. Browning, 46 Wn.2d 538, 283 P.2d 125 (1955)). Taken together, they
support the trial court’s conclusion that Young failed to establish causation. This
is fatal to Young’s particular CPA claim.
11 Young v. Toyota Motor Sales, USA, No. 97576-1
Young attempts to frame the trial court’s decision as requiring him to show
reliance, which would have been error under Indoor Billboard, 162 Wn.2d at 83
(citing Wash. State Physicians Ins. Exch. & Ass’n v. Fisons Corp., 122 Wn.2d 299,
311, 858 P.2d 1054 (1993)). The defendant in Indoor Billboard, a
telecommunications company, had billed a customer a surcharge in a way that
deceptively suggested the surcharge was a tax or Federal-Communications-
Commission-approved fee the customer was obligated to pay. 162 Wn.2d at 76.
The customer was sophisticated and skeptical that the company was in fact
required to pass through the surcharge to its customers, but, after a failed attempt
to have the charge rescinded, he paid it anyway because he did not want “‘to start
things off on a sour note.’” Id. at 67 (quoting record). We rejected the company’s
argument that as a matter of law, any false or deceptive act it committed could not
be the cause of the plaintiff’s injury because the customer could not show he relied
on the deceptive act in deciding to pay the bill. Id. at 81. We also rejected the
customer’s argument that he had proved causation by proving he had paid the bill.
Id. at 83. Instead we held that to establish causation the plaintiff must “establish
that but for the defendant’s unfair or deceptive act or practice the plaintiff's injury
would not have occurred” as a matter of fact. Id. at 82-83.
It is true that the trial judge mentioned reliance at several points in his
detailed memorandum decision. Most relevantly, the trial judge found that Young
12 Young v. Toyota Motor Sales, USA, No. 97576-1
had not established that in fact he relied on the misrepresentation in deciding to
purchase the vehicle. Out of context, this analytical approach would be
inconsistent with Indoor Billboard. See 162 Wn.2d at 83 (citing Wash. State
Physicians Ins. Exch., 122 Wn.2d at 311). But Young’s own causation theory as
pleaded in this particular case was reliance and we find no other substantial theory
of causation in his arguments. The trial judge did not hold him to the reliance
standard. Reliance was Young’s theory and he failed to prove it.
Because we find Young has not shown the trial judge erred in finding he had
not met this element, we do not reach the remaining issues. Young’s request for
attorney fees is denied.
CONCLUSION
We hold that a plaintiff need not show that an affirmative misrepresentation
of fact about a product offered for sale was material to satisfy the first element of a
CPA claim. However, Young has failed to show that any unfair or deceptive act or
practice on the part of the defendant caused him injury. Accordingly, we affirm
the courts below in result.
13 Young v. Toyota Motor Sales, USA, No. 97576-1
____________________________
WE CONCUR:
_____________________________ ____________________________
_____________________________ ____________________________ Result Only
14 Young v. Toyota Motor Sales, USA, No. 97576-1 (Gordon McCloud, J., concurring)
No. 97576-1
GORDON McCLOUD, J. (concurring)—I concur in most of what the
majority says. This case involves an affirmative misrepresentation: Toyota
inaccurately asserted that the 2014 Toyota Tacoma purchased by Duane Young
had an outside temperature gauge. When a case involves an affirmative
misrepresentation, as opposed to a failure to disclose, the plaintiff does not have to
prove materiality in order to establish the first element of a Consumer Protection
Act (CPA) claim. RCW 19.86.020. And like the majority, I would affirm the trial
court’s conclusion that Young failed to prove causation.
I write separately, however, because I read the majority to suggest that
Young may have been able to recover had he brought a causation theory other than
reliance. See majority at 12-13. But Young could not possibly have established
causation in this case without proving that he had relied on Toyota’s
misrepresentation. And I do not read our precedent to suggest otherwise.
1 Young v. Toyota Motor Sales, USA, No. 97576-1 (Gordon McCloud, J., concurring)
In Indoor Billboard/Washington, Inc. v. Integra Telecom of Washington,
Inc., we explained that “where a defendant has engaged in an unfair or deceptive
act or practice, and there has been an affirmative misrepresentation of fact, our
case law establishes that there must be some demonstration of a causal link
between the misrepresentation and the plaintiff’s injury.” 162 Wn.2d 59, 83, 170
P.3d 10 (2007). “A plaintiff must establish that, but for the defendant’s unfair or
deceptive practice, the plaintiff would not have suffered an injury.” Id. at 84.
In Indoor Billboard, we did explain that proximate cause, and not
necessarily reliance, is the touchstone for causation under the CPA. Id. at 82-84.
But we did not entirely do away with reliance. In a subsequent case, we noted that
sometimes “the plaintiff may need to prove reliance to establish causation.” Panag
v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 59 n.15, 204 P.3d 885 (2009) (citing
Indoor Billboard, 162 Wn.2d at 84).
This is one of those cases. Young could not establish causation without
proving reliance. If he did not rely on Toyota’s misrepresentation, then that
misrepresentation could not possibly have caused Young any injury. As the
majority explains, the trial court, serving as fact finder, found that Young bought
the vehicle for reasons unrelated to Toyota’s misrepresentation, subsequently
learned of Toyota’s mistake, and then tried to take advantage of the situation.
2 Young v. Toyota Motor Sales, USA, No. 97576-1 (Gordon McCloud, J., concurring)
Majority at 11. The misrepresentation did not cause Young to do anything at all;
Toyota’s acknowledgement of its mistake caused him to sue. Under no theory of
causation (short of eliminating the causation element altogether) may Young
recover.
In sum, I would not imply that Young may have been able to recover under
some nonreliance theory of causation. I therefore respectfully concur.
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