Tag: Commercial Litigation

On February 19, 2015 the Gamma Phi Chapter of Delta Kappa Epsilon (the “Fraternity” or “DKE”) filed suit against Wesleyan University, its President Michael S. Roth, and its Vice President for Student Affairs, Michael J. Whaley (collectively “Wesleyan University” or the “University”).  The lawsuit was filed as a result of the University denying DKE Program Housing status for the 2015-2016 academic year.  This denial meant that the Fraternity brothers who were, at the time, living in the house had to move out, and that those who planned to live in the house for the upcoming year had to make other living arrangements.

The twelve count complaint included one count which stood out among the rest.  DKE asserted that Wesleyan University had violated the Connecticut Unfair Trade Practices Act.

In 2014, Wesleyan University began implementing co-educational policies throughout their housing programs.  As such, it required DKE, along with all other organizations seeking Program Housing status, to submit plans to comply with the newly imposed co-educational requirements.  The center of the dispute surrounds DKE’s efforts to comply and Wesleyan University’s rejection of DKE’s plan.

DKE is an all-male international fraternity.  When informed of the new co-educational requirement, DKE sought clarification of what Wesleyan University meant by “substantial co-education” and “full and meaningful co-education.”  Despite the lack of clarity, DKE submitted a plan to make the house co-educational, but explained that it could not commit to “fully co-educate” the house given Wesleyan University’s refusal to define the term.  That plan was rejected, and the DKE house was eliminated as Program Housing for the 2015-2016 year.  In 2015, DKE made a second attempt to obtain Program Housing status, but that too was rejected, and again the DKE house was denied Program Housing status for the 2016-2017 year.

DKE argued that this was all part of Wesleyan University’s plan, that began in April 2014, to eliminate all all-male, Greek organizations from Program Housing.  Thus, any and all representations made concerning DKE as eligible for Program Housing were deceptive because Wesleyan University knew before the plan was submitted that any plan would be rejected.  On June 15, 2017 a jury found in favor of DKE, awarding $368,000 in damages.

The Connecticut Unfair Trade Practices Act (“CUTPA”) states, generally, that “[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  Conn. Gen. Stat. § 42-110b(a).  It has been long established that CUTPA “provides a private cause of action to [a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice . . . .”  Ulbrich v. Groth, 78 A.3d 76 (2013);  Harris v. Bradley Memorial Hospital & Health Center, Inc., 994 A.2d 153 (2010);  Landmark Inv. Grp., LLC v. CALCO Constr. & Dev. Co., 124 A.3d 847 (2015) (internal quotation marks omitted.)

Connecticut has adopted the Federal Trade Commission’s “cigarette rule” definition of unfairness:

1. whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness;
2. whether it is immoral, unethical, oppressive, or unscrupulous;
3. whether it causes substantial injury to consumers (or competitors or other businessmen).

Statement of Basis and Purpose of Trade Regulation Rule 408, Unfair or Deceptive Advertising and Labeling of Cigarettes in Relation to the Health Hazards of Smoking. 29 Fed. Reg. 8355 (1964);  FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 244 n.5 (1972).

In support of their CUTPA claim, DKE first asserted that Wesleyan University is engaged in trade or commerce within the meaning of CUTPA.  DKE argued that Wesleyan University advertises and offers for rent or lease various properties to students as residential housing, and markets such housing as an integral part of their educational experience.  Further, DKE argued that the Fraternity, as well as the named Plaintiffs, are consumers within the meaning of the statute.  The crux of their argument was the Wesleyan University’s representations that it was to offer upperclassman housing in the DKE House were false, and that these representations were deceptive.

CUTPA on its face is broad, and thus it is no surprise to see that broad application and liberal interpretation has followed suit.  See Marinos v. Poirot, 66 A.3d 860 (2013);  Associated Investment Co. Ltd. Partnership v. Williams Associates IV, 645 A.2d 505 (1994).  The Connecticut General Assembly “deliberately chose not to define the scope of unfair or deceptive acts proscribed by CUTPA so that courts might develop a body of law responsive to the marketplace practices that actually generate such complaints.”  Associated Inv. Co., 645 A.2d at 510 (quoting Sportsmen’s Boating Corp. v. Hensley, 474 A.2d 780 (1984) (emphasis added)).  Therefore, “CUTPA has come to embrace a much broader range of business conduct than does the common law tort action” and  because it is “a self-avowed ‘remedial’ . . .  measure, it is construed liberally in an effort to effectuate its public policy goals.”  Id.  “Indeed, there is ‘no . . . unfair method of competition, or unfair [or] deceptive act or practice that cannot be reached [under CUTPA].” Id. (quoting the Conn. Joint Standing Committee Hearings, General Law, Pt. 2, 1973 Sess., p. 705, remarks of Attorney Robert Sils, Dept. of Consumer Protection).

This liberal interpretation and broad application is important because CUTPA “provides for more robust remedies than those available under analogous common-law causes of action.”  Marinos, 66 A.3d at 867.  Punitive damages and attorney’s fees and costs are available in addition to actual damages and injunctive or other equitable relief.  See Conn. Gen. Stat. § 42-110g (a).

Given the liberal interpretation, broad application and extensive penalties available thereunder, the case of DKE’s successful CUTPA claim against Wesleyan University ­­­should serve as a cautionary warning for Connecticut litigators and persons sued for violating Connecticut General Statutes § 42-110 et seq., alike.