Nevada is one of several states that has adopted the Uniform Trade Practices Act as a state law. Nevada’s version of the act is referred to as the Nevada Deceptive Trade Practices Act (“NDTPA”) and is codified as NRS Chapter 598, which prohibits anyone from knowingly making a false statement or representation about its product or services or those of its competitors.
Nevada law states that a person engages in a deceptive trade practice if, in the course of his or her business, he or she: knowingly passes off goods or services for sale or lease as those of another person; knowingly makes a false representation as to the source, sponsorship, approval or certification of goods or services for sale or lease; knowingly makes a false representation as to affiliation, connection, association with or certification by another person; knowingly makes a false representation as to the characteristics, ingredients, uses, benefits, alterations or quantities of goods or services for sale or lease or a false representation as to the sponsorship, approval, status, affiliation or connection of a person therewith; or knowingly makes any other false representation in a transaction. Thus, if you run a business and your competitor is exaggerating the quality of its product or wrongfully claiming your product to be inferior, this statute allows you to go to court to stop such conduct and recover damages.
WHAT DOES “KNOWINGLY” MEAN?
A significant aspect of the law is based on the term “knowingly” and what constitutes deception on the part of the business. Until recently, the Nevada appellate courts had not defined the term “knowingly” in the context of the NDTPA. However, on September 5, 2019, the Nevada Court of Appeals provided some guidance on what constitutes a “knowing” under the Act. In the case of Poole v. Nevada Auto Dealership Investments, LLC, 135 Nev. Adv. Op. 39 the Court of Appeals stated:
We therefore conclude that a “knowing” act or omission under the NDTPA does not require that the defendant intend to deceive with the act or omission, or even know of the prohibition against the act or omission, but simply that the defendant is aware that the facts exist that constitute the act or omission. For example, a defendant auto dealer “knowingly” makes a false representation of a car’s condition to a plaintiff customer if the car has been damaged in a collision and the dealer is aware that it represented to the consumer that the car has never been damaged in a collision. “[K]knowingly” does not require that the dealer intended to deceive the consumer or knew of such a misrepresentation’s prohibition – the defendant must simply be aware of the fact that it represented that the car had never been damaged in a collision.
The Court concluded that the language of NRS 5980915(1) (knowingly making any other false representation in a transaction) constitutes a deceptive trade practice. Thus, when the Act prohibits a party from “knowingly” doing something one only need be aware that they are doing it, not that they intend to deceive or that the conduct is even prohibited by the act. This is an extremely broad interpretation of the law by the Court.
ENFORCEMENT AND RECOVERY OF FEES AND COSTS
As noted by the case referenced above, action can be taken by a person who believes they have been a victim of deceptive trade practices by a Nevada business. Those actions include bringing a claim under NRS 41.600, which states that an action may be brought by any person who is a victim of consumer fraud, including a “deceptive trade practice as defined in NRS 598.0915 to 598.0925, inclusive.” NRS 41.600(3) provides that if the claimant is the prevailing party the Court shall award any damages the claimant has sustained, any equitable relief that the court deems appropriate, and the claimant’s costs in the action, including reasonable attorney’s fees.
DISPARAGEMENT OF COMPETITORS
Deceptive Trade Practices includes disparaging the goods or services of a competitor as well. Subsection 8 of NRS 598.0915 prohibits a business from disparaging the goods, services or business of another person by false or misleading representation of fact regarding the other business. In such a case, pursuant to NRS 41.600, a business that is damaged by a competitor’s disparagement of its products could bring an action in the district court to recover all damages suffered as a result of the disparagement and could also petition the court for an injunction prohibiting such conduct in the future.
“Bait and Switch”
It is all too common for consumers to be victims of a tactic that is best described as bait and switch. This is frequently utilized by unethical business owners to entice customers into believing that a product is for sale at an unbelievable price when there is either no such product available or when the supply is so limited, so as to persuade the customer into buying a different or inferior product. However, the NDTPA addresses these prohibited advertising tactics and states that a person engages in deceptive trade practices if he or she: advertises goods or services with intent not to sell or lease them as advertised; advertises goods or services for sale or lease with intent not to supply reasonable expectable public demand, unless the advertisement discloses a limitation of quantity; advertises goods of services as being available free of charge with intent to require payment of undisclosed costs as a condition of receiving the goods or services; advertises under the guise of obtaining sales personnel when the purpose is to first sell or lease goods of services to the sale personnel applicant; makes false or misleading statements of fact concerning the price of goods or services for sale or lease, or the reasons for, existence of or amounts of price reductions;
MISSTATING THE QUALITY OR CONDITION OF GOODS
Further still, the NDTPA states that a person engages in deceptive trade practices if they use deceptive representations of designations of geographic origin in connection with goods or services for sale or lease; represents that goods for sale or lease are original or new if he or she knows or should know that they are deteriorated, altered, reconditioned, reclaimed, used or secondhand; represents that goods or services for sale or lease are of a particular standard, quality or grade, or that such goods are of a particular style or model, if he or she knows of should know that they are of another standard, quality, grade, style or model.
These are just a few examples of conduct that could constitute or result in claims of engaging in deceptive trade practices. The Wright Law Group, P.C. has more than 25 years of experience prosecuting and defending claims of deceptive trade practices and is well equipped to assist you in handling your case. Please call us at 702-405-0001 to schedule a consultation or email us.