OLIVER STORES v. JCB INC

Filing 27

ORDER ON DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS granting 23 Motion for Judgment on the Pleadings. By JUDGE NANCY TORRESEN. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
THE OLIVER STORES,
Plaintiff,
v.
JCB, INC.,
Defendant.

)
)
)
) Docket no. 1:11-cv-353-NT
)
)
)
)

ORDER ON DEFENDANT’S MOTION
FOR JUDGMENT ON THE PLEADINGS
Before the Court is Defendant JCB, Inc.’s motion pursuant to Fed. R. Civ. P.
12(c) for judgment on the pleadings as to Count Two of the Complaint, which alleges
violations of Maine’s Unfair Trade Practices Act. For the reasons that follow, the
Court GRANTS Defendant’s motion.
FACTUAL AND PROCEDURAL BACKGROUND
As noted in earlier orders, this case arises out of the breakdown of the
parties’ business relationship. Defendant is a manufacturer of heavy machinery and
farm equipment. Plaintiff, The Oliver Stores, had been a distributor of Defendant’s
machinery prior to Defendant’s termination of the relationship on June 21, 2011.
On September 20, 2011, the Plaintiff filed a three-count Complaint against
Defendant. Count One alleged violations of the Maine Franchise Act, 10 M.R.S.A. §§
1361-1370 (the “MFA”); Count Two alleged violations of the Maine Unfair Trade
Practices Act, 5 M.R.S.A. §§ 205-A-214, (the “MUTPA”); and Count Three set forth
a breach of contract claim.

On September 21, 2011, the Defendant filed an answer along with a motion
to dismiss the case or stay and compel arbitration. On March 22, 2012, the Court
adopted the magistrate judge’s recommendation to refer the Plaintiff’s breach of
contract claim to arbitration and to retain jurisdiction over the MFA claim, altering
only the recommendation to submit the MUTPA claim to arbitration. Order
Affirming in Part the Recommended Decision (Doc. 17). The Court instead retained
jurisdiction of the MUTPA claim along with the MFA claim. The Court reserved
judgment on the MUTPA claim’s ultimate viability because that issue had not been
squarely presented to the Court. Defendant now moves for judgment on the
pleadings seeking dismissal of Count Two, the Plaintiff’s MUTPA claim.
LEGAL STANDARD
“A Rule 12(c) motion for judgment on the pleadings is treated much like a
Rule 12(b)(6) motion to dismiss.” Perez–Acevedo v. Rivero–Cubano, 520 F.3d 26, 29
(1st Cir. 2008). “‘Because [a Rule 12(c)] motion calls for an assessment of the merits
of the case at an embryonic stage, the court must view the facts contained in the
pleadings in the light most favorable to the nonmovant and draw all reasonable
inferences therefrom . . . .’” Id. (quoting R.G. Fin. Corp. v. Vergara–Nunez, 446 F.3d
178, 182 (1st Cir. 2006)). “[T]o survive a Rule 12(b)(6) motion (and, by extension, a
Rule 12(c) motion) a complaint must contain factual allegations that ‘raise a right to
relief above the speculative level, on the assumption that all the allegations in the
complaint are true . . . .’” Perez-Acevedo, 520 F.3d at 29 (quoting Bell Atlantic v.
Twombly, 550 U.S. 544, 555 (2007)).

2

DISCUSSION
At issue before the Court is whether a commercial franchisee may bring a
claim under the private remedies provision found in Section 213 of MUTPA. This
question requires the Court to address the interplay between the MFA and MUTPA.
I.

Statutory Background
The MFA prohibits manufacturers from engaging in certain “unfair methods

of competition and unfair and deceptive practices” in franchise relationships. 10
M.R.S.A. § 1363(3). Civil remedies for franchisees that have been damaged by a
violation of the MFA are contained in section 1362. The MFA’s civil remedies
section does not provide for attorney’s fees or costs incurred in connection with an
MFA action. The MFA provides a two-year statute of limitations. 10 M.R.S.A. §
1369. In 1993, Maine’s Legislature made significant changes to the MFA, including
the enactment of a “Penalty” provision which states simply: “Violation of this
chapter constitutes an unfair trade practice under the Maine Unfair Trade
Practices Act, Title 5, chapter 10.” 10 M.R.S.A. § 1370 (the “MFA Penalty
Section”).
MUTPA makes unlawful “[u]nfair methods of competition and unfair or
deceptive acts or practices in the conduct of any trade or commerce.” 5 M.R.S.A. §
207. MUTPA contains a “private remedies” section, which provides in pertinent
part:
Any person who purchases or leases goods, services or property,
real or personal, primarily for personal, family or household
purposes and thereby suffers any loss of money or property, real or
personal, as a result of the use or employment by another person of
3

a method, act or practice declared unlawful by section 207 or by any
rule or regulation issued under section 207, subsection 2 may bring
an action either in the Superior Court or District Court for actual
damages, restitution and for such other equitable relief, including
an injunction, as the court determines to be necessary and proper.
There is a right to trial by jury in any action brought in Superior
Court under this section.
5 M.R.S.A. § 213(1) (emphasis added). Section 213(2) allows the court to award
reasonable attorney’s fees and costs incurred with the action to a prevailing
plaintiff. MUTPA does not contain a statute of limitations provision, but the Maine
Law Court has applied the generic six-year statute of limitations for civil actions
found at 14 M.R.S.A. § 752 to claims under MUTPA. McKinnon v. Honeywell
Intern., Inc., 977 A.2d 420, 424 (Me. 2009).
MUTPA also contains a state enforcement mechanism which is not found in
the MFA. MUTPA empowers the State Attorney General to bring an action “to
restrain by temporary or permanent injunction” an unfair trade practice. 5 M.R.S.A.
§§ 209-211. As part of the state enforcement mechanism, a court may provide
restitution to “any person who has suffered any ascertainable loss” due to the unfair
trade practice. 5 M.R.S.A. § 209. Section 209 clearly anticipates involving the
Attorney General in enforcing violations of other statutes, like the MFA, which
make a violation of those statutes also a violation of MUTPA.1 The state
enforcement mechanism essentially gives the Attorney General the authority to

“The Attorney General in seeking civil penalties has the burden of proving that the conduct
was intentional and was unfair or deceptive notwithstanding any other statute which declares a
violation of that statute an unfair trade practice.” 5 M.R.S.A. § 209.
1

4

settle a case involving a MUTPA violation.2 The Attorney General also is
empowered to examine the books and records that might be relevant to any unfair
trade practice. 5 M.R.S.A. § 211. MUTPA’s Penalty Section subjects any person who
fails to cooperate with the Attorney General’s investigation to penalties. 5 M.R.S.A.
§ 212.
II.

The Meaning of the MFA Penalty Section’s Reference to MUTPA
The Plaintiff contends that the MFA Penalty Section signals the Legislature’s

intent to open Section 213’s private remedies to franchisees. The Plaintiff cites
Fitzpatrick v. Teleflex, Inc., 763 F. Supp. 2d 224 (D. Me. 2011), in support. There the
court stated that “[a] violation of the Franchise Laws constitutes an unfair trade
practice and is actionable under the Maine Unfair Trade Practices Act, Title 5,
chapter 10.” Id. at 232. In Fitzpatrick, the question before the court was whether a
plaintiff franchisee could maintain an action against the defendant franchisor under
MUTPA’s six-year statute of limitations, or whether its claims were foreclosed by
the MFA’s two-year statute of limitations. The Court found that, because the
plaintiff’s action arose out of the MFA, that act’s shorter limitations period applied.
The defendant did not argue that the plaintiff was precluded from a remedy under
Section 213 because it was a commercial entity. Although Fitzpatrick’s statement
that the plaintiff had a cause of action under MUTPA sounds dispositive, it was not
an adjudication of the question whether a commercial franchisee may bring a claim
under Section 213 of MUTPA.
MUTPA provides: “In any case where the Attorney General has authority to institute an
action or proceeding under section 209, in lieu thereof he may accept an assurance of discontinuance
of any method, act or practice in violation of this chapter . . . .” 5 M.R.S.A. § 210.
2

5

The Defendant counters that MUTPA does not provide a cause of action to
the Plaintiff because the Plaintiff is a commercial entity and Section 213’s “private
remedies” are only available to persons who purchase or lease goods, services or
property, “primarily for personal, family or household purposes.” 5 M.R.S.A. § 213.
The Defendant cites to C-B Kenworth, Inc. v. General Motors Corp., 706 F. Supp.
952, 957 (D. Me. 1988), which found that an automobile franchisee had no private
right of action under Section 213 of MUTPA. The language in C-B Kenworth also
sounds dispositive, but since the case predated the enactment of the MFA’s Penalty
Section, it is of limited value.
The plain meaning of Section 213 limits private remedies to persons who
purchase goods, services or property for “personal, family or household purposes.”
The plain meaning of MFA’s Penalty Section makes a violation of the MFA a
violation of MUTPA, but the section is silent as to whether the MFA was meant to
incorporate all of MUTPA’s provisions. The statutory history accompanying the
1993 MFA amendments contains no suggestion that the MFA was meant to alter
Section 213’s clear limitation to goods purchased “primarily for personal, family or
household purposes” in the case of franchisees. See L.D. 364 (116th Legis. 1993).
When enacting a statute, the Legislature is presumed to be aware of existing
law. See In re Dustin C., 952 A.2d 993, 994 (Me. 2008); Stockly v. Doil, 870 A.2d
1208, 1213 (Me. 2005). When it enacted the MFA’s Penalty Section, the Legislature
must be presumed to have been aware that the “private remedies” section of
MUTPA was limited to consumer actions, yet it made no changes to that statutory

6

section to accommodate MUTPA actions by commercial franchisees. In the face of
the Legislature’s failure to amend MUTPA, the Court is constrained to assume that
MUTPA’s Section 213 continues by its plain terms to apply only to consumers.
This conclusion is reinforced by other general canons of statutory
construction. Courts must interpret statutes so as to obtain “harmony” and avoid
“unreasonable or illogical” constructions. Pinkham v. Morrill, 622 A.2d 90, 95 (Me.
1993); State v. Niles, 585 A.2d 181, 182 (Me. 1990). The reference to MUTPA in
MFA’s Penalty Section logically adopts MUTPA’s state enforcement provisions. Yet
any interpretation which make MUTPA’s “private remedies” section applicable to
franchisees would render meaningless the words “primarily for personal, family or
household purposes” within Section 213 and make the MFA’s own civil remedies
section superfluous.3 Additionally, when comparing statutory provisions, the
specific controls the general. See Cumberland Farms N., Inc. v. Maine Milk
Comm’n, 428 A.2d 869, 873 (Me. 1981). The Penalty Section generally adopts and
incorporates MUTPA into the MFA, whereas the specific “private remedies”
provision of MUTPA plainly limits itself to consumer actions. The language of
The Plaintiff argues that the Legislature would not have titled the Penalty Section “Penalty”
if it intended only to incorporate MUTPA’s public enforcement mechanisms because those
mechanisms are discretionary and limited to possible restitution. The Plaintiff seems to be arguing
that such an interpretation of the Penalty Section would render the word “Penalty” meaningless.
This, however, ignores the fact that the act of labeling an MFA violation an unfair trade practice —
even if simply for purposes of providing a basis for state action — itself constitutes a penalty. With
the Penalty Section in place, any franchisor who is found to have committed an MFA violation must
now contend with the fact that it is also deemed to have committed an unfair trade practice,
triggering the possibility of a state investigation and prosecution. Moreover, the private remedies
provided under Section 213 — damages and attorney’s fees — are not considered “penalties” in
MUTPA but, rather, “remedies” for consumers who have been injured by unfair trade practices. The
only “penalty” referred to in MUTPA is the monetary penalty that may be imposed upon a person
who fails to cooperate in a state MUTPA investigation. This reinforces the understanding that the
MFA’s Penalty Section refers not to any “penalty” inherent in allowing a private MUTPA action but
to the penalty of automatically labeling an MFA violation a MUTPA violation.
3

7

Section 213 of MUTPA, and not the language of the MFA’s Penalty Section,
therefore controls the scope of actions under Section 213. For all of these reasons,
the Court concludes that the Plaintiff has no private right of action against the
Defendant under Section 213 of MUTPA.
The Plaintiff contends that the Maine Legislature routinely makes violations
of other statutes’ unfair trade practices when it wishes to level the playing field, and
it argues that the Maine Legislature intended to do so for franchisees, which are
often at the mercy of more powerful franchisors. Plaintiff’s Opposition to
Defendant’s Motion for Judgment on the Pleadings at 5 (“Plaintiff’s Opposition”)
(Doc. 24) (citing 10 M.R.S.A. §§ 1231-1233 (dealing with manufacturers’ rebates); 10
M.R.S.A. § 1496 (dealing with unsolicited telefacsimile transmissions); and 33
M.R.S.A. § 506 (dealing with undocumented mortgage agreements)). The Plaintiff
argues that in none of these other laws does the Legislature “limit the right of the
victim to hoping that the Attorney General’s Office will step in under the UTPA and
no more.” Plaintiff’s Opposition at 4-5.
The Maine Legislature has gone well beyond the three statutes cited by the
Plaintiff. The Court found roughly fifty statutes which make a violation of the
individual statute a violation of MUTPA.4 Closer scrutiny of these laws, however,

See 4 M.R.S.A. § 807-B (providers of immigration and nationality law assistance who engage
in prohibited activities violate MUTPA); 9 M.R.S.A. § 5014 (Charitable Solicitations Act); 9-A
M.R.S.A. § 3-507 (home solicitation sales); 9-A M.R.S.A. § 8-510 (Truth-In-Lending legislation); 9-A
M.R.S.A. § 9-408 (consumer credit transactions made to acquire real estate); 10 M.R.S.A. § 1110
(price protection and pre-paid contracts); 10 M.R.S.A. § 1193 (motor vehicle dealers); 10 M.R.S.A. §
1377 (Self-Service Storage Act violations involving failure to protect personal information); 10
M.R.S.A. § 1406 (manufactured housing warranties); 10 M.R.S.A. § 1477 (used cars); 10 M.R.S.A. §
1483 (insulation contractors); 10 M.R.S.A. § 1490 (home construction contracts); 10 M.R.S.A. § 1494
(warranties for sale and installation of solar energy equipment); 10 M.R.S.A. § 1496-C (Cellular
4

8

does not reveal the pattern that the Plaintiff hopes to establish.5 Most, but not all of
these laws, relate to consumers. Some protect consumers from franchisees. Some
protect businesses or license holders. Some contain independent private remedies in
addition to MUTPA violation. Others make reference to actions by the Attorney
General. There are simply too many variations to allow the Court to draw the
Telephone Customer Privacy Act); 10 M.R.S.A. § 1497 (e-mail solicitation); 10 M.R.S.A. § 1498
(telephone solicitation); 10 M.R.S.A. § 9100 (regulation of mobile home parks); 11 M.R.S.A. § 2-316
(retail sales of consumer goods and services); 17 M.R.S.A. § 2305 (multi-level distributorships); 20-A
M.R.S.A. § 9503 (private business, trade and technical schools); 22 M.R.S.A. § 1555-C (delivery sales
of premium cigars); 22 M.R.S.A. § 1555-D (tobacco products); 22 M.R.S.A. § 1711-E (confidentiality of
prescription drug information); 22 M.R.S.A. § 2500-A (menu labeling for chain restaurants); 22
M.R.S.A. § 2693 (emergency drug pricing); 22 M.R.S.A. § 2697 (profiteering in prescription drugs); 22
M.R.S.A. § 2700-A (prescription drug advertising); 24-A M.R.S.A. § 6814 (Viatical and Life
Settlements Act); 25 M.R.S.A. § 3702-C (solicitation by law enforcement officers); 28-A M.R.S.A. §
1407 (wholesale licensees for liquor sales); 29-A M.R.S.A. § 903 (applications for motor vehicle
dealers); 29-A M.R.S.A. § 953-A (document fees on motor vehicles); 29-A M.R.S.A. § 1754 (inspection
by dealers and transporters); 29-A M.R.S.A. § 2106 (tampering with odometer); 30-A M.R.S.A. § 3010
(consumer rights and protection relating to cable television service); 30-A M.R.S.A. § 3692-93
(pawnbrokers); 32 M.R.S.A. § 1406 (grave markers); 32 M.R.S.A. § 1726 (labeling of plastic
containers); 32 M.R.S.A. § 4670 (consumer solicitation sales); 32 M.R.S.A. § 4700 (regulations of the
sale of business opportunities); § 32 M.R.S.A. § 14251 (schools of barbering and cosmetology); 32
M.R.S.A. § 14512 (door to door home repair); 32 M.R.S.A. § 14713 (door to door sales of consumer
merchandise); 32 M.R.S.A. § 17305 (hearing aid sales); 33 M.R.S.A. § 1976 (agreements to locate
property).
5
An examination of just the three statutes cited by the plaintiff suggests some of the
differences in these statutes. The manufacturers’ rebates law covers only consumers who purchase
consumer goods, so it is clear that the impediment to utilizing section 213 of MUTPA faced by
franchisees would not apply to victims of manufacturer rebate violations. The manufacturers’ rebate
law contains a “violation” section which provides that if a court finds a violation, it shall award an
amount not less than $100. 10 M.R.S.A. § 1233. The violation section also indicates that a violation
of the manufacturers’ rebates law constitutes a violation of MUTPA. Id.
The undocumented mortgage law provides in total: “In a residential mortgage loan closing, a
buyer, seller or settlement agent may not knowingly be a party to a financial or other arrangement
not reflected in the loan settlement statement if the effect of that arrangement is to substantially
overstate the contract sales price. Any violation of this section constitutes a violation of the Maine
Unfair Trade Practices Act.” 33 M.R.S.A. § 506. This law apparently protects the mortgage holder
from side deals. There is no private remedy section in undocumented mortgage agreements law. It
may be that the reference to MUTPA in this law was intended to allow investigation by the Attorney
General.
The unsolicited telefacsimile transmissions statute prohibits any person from sending an
unsolicited fax for the purpose of seeking charitable contributions or to sell goods and services. A
violation constitutes an unfair trade practice. The fax statute contains no private remedy section.
The fax law does not limit its application to consumers, but how a victim of this law would proceed
under section 213 is unclear. For one, the victim would have to suffer some loss. Once again, it seems
as likely that the Legislature was intending to draw the attention of the Attorney General as it was
intending to provide a private remedy.

9

conclusion that when the Legislature refers to MUTPA it means to provide the
private remedies associated with Section 213. The statutes have to be looked at on a
case-by-case basis. And in this case, it does not make sense to incorporate MUTPA’s
private remedy section into the MFA.
The Plaintiff argues that, even if it does not have a cause of action under
Section 213 of MUTPA, it has still articulated a cause of action under Count Two
because this count requests not only damages and attorney’s fees (remedies
provided for solely under Section 213) but also a declaration from the Court that the
Defendant has violated MUTPA. The Plaintiff gains nothing by this argument.
Under both the state and federal Declaratory Judgment Acts, a court will only
undertake to declare the rights of the parties where some relief would thereby be
provided. See Ernst & Young v. Depositors Econ. Prot. Corp., 45 F.3d 530, 537 (1st
Cir. 1995) (under the federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202,
the litigant must show either that declaratory relief would confer a benefit or that
refusing declaratory relief would impose a hardship); Perry v. Hartford Acc. and
Indem. Co., 481 A.2d 133, 136 (Me. 1984) (in determining whether to entertain an
action for relief under Maine’s Declaratory Judgment Act, 14 M.R.S.A. §§ 59515963, the court should consider whether the adjudication will serve some useful
purpose).
Should the Court or a jury ultimately find that the Defendant violated the
MFA, the Court’s further declaration that this constitutes a violation of MUTPA
would not be an adjudication of any sort, but would merely repeat the language of

10

10 M.R.S.A. § 1370. Because it decides nothing and adds nothing to the Plaintiff’s
case, such a declaration would not provide the Plaintiff with any relief.
CONCLUSION
For the reasons stated, Defendant’s motion for judgment on the pleadings is
GRANTED. Count Two of the Complaint, for violations of Maine’s Unfair Trade
Practices Act, is DISMISSED.
SO ORDERED.
/s/ Nancy Torresen
United States District Judge
Dated this 5th day of October, 2012.

11