Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                              H.B. 435
Approved for Filing: C.R. Gilbert 6
         6 01-30-24 10:49 AM 6
                        TRUTH IN ADVERTISING AMENDMENTS
                                      2024 GENERAL SESSION
                                           STATE OF UTAH
                                  Chief Sponsor: James Cobb
                                Senate Sponsor: Heidi Balderree
 6
 LONG TITLE
 General Description:
        This bill modifies provisions related to truth in advertising.
 Highlighted Provisions:
        This bill:
        < modifies the definition of "advertisement";
        < provides that it is a deceptive trade practice to cause likelihood of confusion or of
 misunderstanding as to the extent to which goods or services are the product of
 human authorship;
        < increases the minimum damages award in an action alleging a deceptive trade
 practice;
        < requires a potential plaintiff alleging a deceptive trade practice to give the potential
 defendant an opportunity to remedy the alleged violation before filing an action for
 damages; and
        < makes technical changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None
                                                                                                         H.B. 435
 Utah Code Sections Affected:
 AMENDS:
     *HB0435*
       H.B. 435                                                                   01-30-24 10:49 AM
        13-11a-2, as last amended by Laws of Utah 2009, Chapter 133
        13-11a-3, as last amended by Laws of Utah 2010, Chapters 54, 378
        13-11a-4, as enacted by Laws of Utah 1989, Chapter 205
31
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 13-11a-2 is amended to read:
        13-11a-2. Definitions.
        As used in this chapter:
        (1) "Advertisement" means any written, oral, or graphic statement or representation, or
 any series of written, oral, or graphic statements or representations, made by a supplier in
 connection with the solicitation of business. It includes, but is not limited to, communication
 by noncable television systems, radio, printed brochures, newspapers, leaflets, flyers, circulars,
 billboards, banners, or signs. It does not include any oral, in person, representation made by a
 sales representative to a prospective purchaser.
        (2) To "clearly and conspicuously disclose" means:
        (a) in the print media:
        (i) to state in typeface that is sufficiently bold to be obviously seen;
        (ii) to state in type size of at least 10 point type for a 14" x 23" document, and, in larger
 documents, of a type size of proportionately the same size; and
        (iii) to place in the text so as to be obviously seen;
        (b) in radio advertising, to verbally state in the same volume as that used in the
 advertisement;
        (c) in television advertising, the method for print media or radio advertising is
 acceptable unless contrary to other governing laws.
        (3) "Generic good" means a product which is offered for sale under its common
 descriptive name rather than under a trademark, trade name, brand name, house brand, or other
 distinguishing appellation.
        (4) "Goods and services" means all items which may be the subject of a sales
 transaction.
        (5) "Nondiscounted price" means a price at which the goods or services are offered at
 the time of the price assessment without a temporary store reduction in price.
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       01-30-24 10:49 AM                                                                       H.B. 435
         (6) "Performing group" means a vocal or instrumental group that performs live music
 for a paying audience.
         (7) "Person" means an individual, including a consumer, corporation, government, or
 governmental subdivision or agency, business trust, estate, trust, partnership, unincorporated
 association, two or more of any of the foregoing having a joint or common interest, or any
 other legal or commercial entity.
         (8) "Price assessment" means the determination of the prices underlying a price
 comparison.
         (9) "Price assessor" means a firm or individual that determines the prices, including the
 reference prices, underlying the price comparison, or who makes the price comparison.
         (10) "Price comparison" means any express representation that a specific savings,
 reduction, or discount exists or will exist between the supplier's advertised price and another
 specific price. A representation which does not reasonably imply a comparison to identifiable
 prices or items does not express a price comparison. Language constituting mere sales
 "puffing" is not prohibited by this chapter.
         (11) "Product area" means the geographical area in which the prospective purchasers to
 whom the advertisement is aimed could reasonably be expected to seek the goods or services in
 question.
         (12) "Recording group" means a vocal or instrumental group at least one of the
 members of which has released a commercial sound recording under the group's name, if the
 member has a legal right to use of the group's name.
         (13) "Reference price" means a higher price to which a supplier compares a lower price
 to indicate that a reduction in price exists or will exist.
         (14) "Regular price" means the price at which a supplier has recently offered the goods
 or services for sale in good faith in the regular course of business. Every price represented in
 an advertisement is considered a regular price unless it is specifically represented as a price
 other than a regular price, such as a discount price or a manufacturer's suggested price. It is
 prima facie evidence that a price is other than a regular price when it was not offered as the
 nondiscount price of the goods or services for the 15 days immediately preceding an
 advertisement of the price, and the price change during the 15 day period was not due to price
 changes inherent in the pricing of seasonal or perishable goods, due to changes in cost of the
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        H.B. 435                                                                    01-30-24 10:49 AM
 goods or services to the supplier, or due to pricing changes made to match a competitor's price.
        (15) "Sales transaction" means a sale, lease, assignment, award by chance, or other
 written or oral transfer or disposition of goods, services, or other property, both tangible and
 intangible (except securities and insurance), to a person or business, or a solicitation or offer by
 a supplier with respect to any of these transfers or dispositions. It includes any offer or
 solicitation, any agreement, and any performance of an agreement with respect to any of these
 transfers or dispositions.
        (16) "Sound recording" means a work resulting from the fixation on a material object,
 such as a disk, tape, or phono-record, of musical or instrumental sounds.
        (17) "Supplier" means a seller, lessor, assignor, offeror, broker, or other person who
 regularly solicits, engages in, or enforces sales transactions, whether or not he deals directly
 with the purchaser.
        Section 2. Section 13-11a-3 is amended to read:
        13-11a-3. Deceptive trade practices enumerated -- Records to be kept -- Defenses.
        (1) Deceptive trade practices occur when, in the course of a person's business,
 vocation, or occupation that person:
        (a) passes off goods or services as those of another;
        (b) causes likelihood of confusion or of misunderstanding as to the source,
 sponsorship, approval, or certification of goods or services;
        (c) causes likelihood of confusion or of misunderstanding as to affiliation, connection,
 association with, or certification by another;
        (d) uses deceptive representations or designations of geographic origin in connection
 with goods or services;
        (e) represents that goods or services have sponsorship, approval, characteristics,
 ingredients, uses, benefits, or qualities that they do not have or that a person has a sponsorship,
 approval, status, affiliation, or connection that the person does not have;
        (f) represents that goods are original or new if they are deteriorated, altered,
 reconditioned, reclaimed, used, or second-hand;
        (g) represents that goods or services are of a particular standard, quality, or grade, or
 that goods are of a particular style or model, if they are of another;
        (h) disparages the goods, services, or business of another by false or misleading
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        01-30-24 10:49 AM                                                                       H.B. 435
 representation of fact;
         (i) advertises goods or services or the price of goods and services with intent not to sell
 them as advertised;
         (j) advertises goods or services with intent not to supply a reasonable expectable public
 demand, unless:
         (i) the advertisement clearly and conspicuously discloses a limitation of quantity; or
         (ii) the person issues rainchecks for the advertised goods or services;
         (k) makes false or misleading statements of fact concerning the reasons for, existence
 of, or amounts of price reductions, including the false use of any of the following expressions
 in an advertisement:
         (i) "going out of business";
         (ii) "bankruptcy sale";
         (iii) "lost our lease";
         (iv) "building coming down";
         (v) "forced out of business";
         (vi) "final days";
         (vii) "liquidation sale";
         (viii) "fire sale";
         (ix) "quitting business"; or
         (x) an expression similar to any of the expressions in Subsections (1)(k)(i) through
 (ix);
         (l) makes a comparison between the person's own sale or discount price and a
 competitor's nondiscounted price without clearly and conspicuously disclosing that fact;
         (m) without clearly and conspicuously disclosing the date of the price assessment
 makes a price comparison with the goods of another based upon a price assessment performed
 more than seven days prior to the date of the advertisement or uses in an advertisement the
 results of a price assessment performed more than seven days prior to the date of the
 advertisement without disclosing, in a print ad, the date of the price assessment, or in a radio or
 television ad, the time frame of the price assessment;
         (n) advertises or uses in a price assessment or comparison a price that is not that
 person's own unless this fact is:
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        H.B. 435                                                                    01-30-24 10:49 AM
        (i) clearly and conspicuously disclosed; and
        (ii) the representation of the price is accurate;
        (o) represents as independent an audit, accounting, price assessment, or comparison of
 prices of goods or services, when the audit, accounting, price assessment, or comparison is not
 independent;
        (p) represents, in an advertisement of a reduction from the supplier's own prices, that
 the reduction is from a regular price, when the former price is not a regular price as defined in
 Subsection 13-11a-2(14);
        (q) advertises a price comparison or the result of a price assessment or comparison that
 uses, in any way, an identified competitor's price without clearly and conspicuously disclosing
 the identity of the price assessor and any relationship between the price assessor and the
 supplier;
        (r) makes a price comparison between a category of the supplier's goods and the same
 category of the goods of another, without randomly selecting the individual goods or services
 upon whose prices the comparison is based;
        (s) makes a comparison between similar but nonidentical goods or services unless the
 nonidentical goods or services are of essentially similar quality to the advertised goods or
 services or the dissimilar aspects are clearly and conspicuously disclosed in the advertisements;
 [or]
        (t) engages in any other conduct which similarly creates a likelihood of confusion or of
 misunderstanding[.]; or
        (u) causes likelihood of confusion or of misunderstanding as to the extent to which
 goods or services are the product of human authorship.
        (2) (a) For purposes of Subsection (1)(i), if a specific advertised price will be in effect
 for less than one week from the advertisement date, the advertisement shall clearly and
 conspicuously disclose the specific time period during which the price will be in effect.
        (b) For purposes of Subsection (1)(n), with respect to the price of a competitor, the
 price shall be one at which the competitor offered the goods or services for sale in the product
 area at the time of the price assessment, and may not be an isolated price.
        (c) For purposes of Subsection (1)(o), an audit, accounting, price assessment, or
 comparison shall be independent if the price assessor randomly selects the goods to be
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        01-30-24 10:49 AM                                                                        H.B. 435
 compared, and the time and place of the comparison, and no agreement or understanding exists
 between the supplier and the price assessor that could cause the results of the assessment to be
 fraudulent or deceptive. The independence of an audit, accounting, or price comparison is not
 invalidated merely because the advertiser pays a fee for the audit, accounting, or price
 comparison, but is invalidated if the audit, accounting, or price comparison is done by a full or
 part-time employee of the advertiser.
        (d) Examples of a disclosure that complies with Subsection (1)(q) are:
        (i) "Price assessment performed by Store Z";
        (ii) "Price assessment performed by a certified public accounting firm"; or
        (iii) "Price assessment performed by employee of Store Y".
        (e) For the purposes of Subsection (1)(r), goods or services are randomly selected when
 the supplier has no advance knowledge of what goods and services will be surveyed by the
 price assessor, and when the supplier certifies its lack of advance knowledge by an affidavit to
 be retained in the supplier's records for one year.
        (f) (i) It is prima facie evidence of compliance with Subsection (1)(s) if:
        (A) the goods compared are substantially the same size; and
        (B) the goods compared are of substantially the same quality, which may include
 similar models of competing brands of goods, or goods made of substantially the same
 materials and made with substantially the same workmanship.
        (ii) It is prima facie evidence of a deceptive comparison under this section when the
 prices of brand name goods and generic goods are compared.
        (3) Any supplier who makes a comparison with a competitor's price in advertising shall
 maintain for a period of one year records that disclose the factual basis for such price
 comparisons and from which the validity of such claim can be established.
        (4) Engaging in a deceptive trade practice is prohibited.
        [(4)] (5) It is a defense to any claim of false or deceptive price representations under
 this chapter that a person:
        (a) has no knowledge that the represented price is not genuine; and
        (b) has made reasonable efforts to determine whether the represented price is genuine.
        [(5)] (6) Subsections (1)(m) and (q) do not apply to price comparisons made in catalogs
 in which a supplier compares the price of a single item of its goods or services with those of
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        H.B. 435                                                                   01-30-24 10:49 AM
 another.
        [(6)] (7) To prevail in an action under this chapter, a complainant need not prove
 competition between the parties or actual confusion or misunderstanding.
        [(7)] (8) This chapter does not affect unfair trade practices otherwise actionable at
 common law or under other statutes of this state.
        Section 3. Section 13-11a-4 is amended to read:
        13-11a-4. Jurisdiction of district courts -- Injunctive relief -- Damages --
 Attorneys' fees -- Corrective advertising -- Notification required.
        (1) The district courts of this state have jurisdiction over any supplier as to any act or
 practice in this state governed by this chapter or as to any claim arising from a deceptive trade
 practice as defined in this chapter.
        (2) (a) Any person or the state may maintain an action to enjoin a continuance of any
 act in violation of this chapter and, if injured by the act, for the recovery of damages. If, in
 such action, the court finds that the defendant is violating or has violated any of the provisions
 of this chapter, it shall enjoin the defendant from continuance of the violation. It is not
 necessary that actual damages be proven.
        (b) In addition to injunctive relief, the plaintiff is entitled