State ex rel. Miller v. Vertrue, Inc.

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The Attorney General brought an action against Corporation, which sold memberships in buying programs giving members the option to purchase various goods and services at discounted rates, alleging violations of the Buying Club Membership Law (BCL) and the Iowa Consumer Fraud Act (CFA) and seeking civil penalties for consumer frauds committed against the elderly. The district court concluded (1) many of Corporation's marketing and sales practices violated the BCL and CFA; (2) Corporation did not commit consumer frauds against the elderly; and (3) application of the BCL to Corporation's solicitation practices did not violate the dormant Commerce Clause. The court awarded more than $25 million in consumer reimbursement, civil penalties, and attorney fees. The Supreme Court affirmed in part, reversed in part, and modified, holding (1) Corporation's telemarketing and Internet practices violated the CFA; (2) Corporation's solicitations and its memberships offering one or more discount features were subject to the terms of the BCL; (3) application of the BCL to Corporation's solicitations did not violate the dormant Commerce Clause; (4) affirmed the reimbursement award for BCL violations as modified; and (5) reversed the ruling that the State was not entitled to civil penalties for consumer frauds committed by the elderly. View "State ex rel. Miller v. Vertrue, Inc." on Justia Law