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Understanding Consumer Protection Act Claims & Business Litigation

Usually, claims under the state’s Consumer Protection Act, or CPA, created in RSA 358-A, are asserted by consumers against businesses. It's not uncommon in litigation among businesses for the antagonists to assert CPA claims against each other, however.

Businesses, disgruntled shareholders and partners, and even employers have asserted CPA claims. Business litigants like to include CPA claims because they offer the possibility of collecting double or triple damages, as well as costs and attorneys fees, which typically cannot otherwise be recovered.

What's Unlawful Under The CPA

The CPA makes it “unlawful for any person to use any unfair method of competition or any unfair or deceptive act or practice in the conduct of any trade or commerce within this state.”

“Trade and commerce'' includes “the advertising, offering for sale, sale, or distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situate, and shall include any trade or commerce directly or indirectly affecting the people of this state.” The Act prohibits a list of specific business practices, and extends to any other unfair or deceptive act or practice that “attain[s] a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce.” A long list of statutes defines other conduct to be unlawful under the CPA, as well.

Although CPA claims can be brought in business-versus-business lawsuits, you must understand these limitations:

  1.  conduct not considered to be “trade or commerce”;
  2.  transactions exempt from the Act; and
  3. conduct that falls within the acceptable “rough and tumble” of the marketplace.

Conduct That's Not Trade or Commerce

Drawn by the promise of recovering multiple damages, costs, and attorneys’ fees, parties to business and employment disputes often assert CPA claims in their lawsuits. The courts, however, have frowned on this. One case found that an employee may not recover under the CPA for an employer’s refusal to pay severance benefits. Another case held that the CPA does not provide relief for conduct occurring within a partnership or joint venture partnership. A third case found that an officer, director, or shareholder of a company acting in that capacity and not as part of an arm’s length commercial transaction between distinct entities can’t be sued under the CPA. The rationale underlying these decisions is that while disputes between business entities are “trade or commerce,” disputes within business entities are not.

Trade or Commerce That's Exempt

Some acts or practices that admittedly do constitute “trade or commerce” still fall outside the CPA because they are specifically exempted from it. The most important of these exempts trade or commerce that is subject to the jurisdiction of the bank commissioner, the director of securities regulation, the insurance commissioner, the public utilities commission, the financial institutions and insurance regulators of other states, or federal banking or securities regulators who possess the authority to regulate unfair or deceptive trade practices.

Conduct Not Rising to Rascality

Finally, some conduct that constitutes trade or commerce because it is business-to-business, but is not expressly prohibited by the CPA, nevertheless falls within the Act because it rises to “a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce.” What a description!

Whether conduct rises to this level requires a detailed analysis of the conduct and the business context in which it occurs. What is “rascality” in a transaction between a seller and an ultimate consumer may be nothing more than “rough and tumble” where two businesses are involved. It’s especially difficult to prove rascality where the case involves arms-length dealings between sophisticated business entities.


CPA claims often arise in business litigation. These claims can be dismissed if the conduct complained of arose from disputes within the business entity, shareholder, partner, and employment disputes. They can also be dismissed if the conduct complained of is subject to the jurisdiction of the banking commissioner, the insurance commissioner, the PUC, or other exemptions enumerated in the Act. But conduct that rises to a level of rascality that would raise an eyebrow in the rough and tumble of the marketplace can subject businesses to enormous liability.

Whether conduct meets that standard demands a detailed analysis that business litigants need to work closely with their lawyers to analyze, assess, and address.

New Hampshire Business Lawyer Consultation

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