HB-4158, As Passed House, March 17, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4158

 

 

 

 

 

 

 

 

 

 

 

     A bill to regulate certain pricing of consumer items and the

 

advertising of consumer items, goods, merchandise, and commodities;

 

to prescribe the powers and duties of certain state and local

 

officials; to provide remedies and penalties; to make

 

appropriations; and to repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. This act shall be known and may be cited as the

 

"shopping reform and modernization act".

 

     Sec. 2. As used in this act:

 

     (a) "Advertise" means the use or dissemination of an

 

advertising by a person that is subject to this act.

 

     (b) "Advertising" or "advertisement" means a communication or

 

representation that is disseminated in any manner by any means for


 

the purpose of inducing, or that is likely to induce, directly or

 

indirectly, the purchase of a consumer item, good, merchandise, or

 

commodity.

 

     (c) "Automatic checkout system" means an electronic device,

 

computer, or machine that determines the price of a consumer item

 

by using a product identity code. An automatic checkout system may

 

but is not required to include an optical scanner.

 

     (d) "Consumer item" means an article of tangible personal

 

property used or consumed, or bought for use or consumption,

 

primarily for personal, family, or household purposes.

 

     (e) A price is "displayed" for a consumer item if the price is

 

stamped, affixed, or otherwise marked on the consumer item; or the

 

price of the consumer item is displayed, by signage, by an

 

electronic reader, or by any other method that clearly and

 

reasonably conveys the current price of the consumer item, to a

 

consumer when in the store at the place where the item is located.

 

     (f) "Person" means an individual, corporation, limited

 

liability company, partnership, association, or other legal entity.

 

     (g) "Sale at retail" means a transfer of an interest in a

 

consumer item by a person that is regularly and principally engaged

 

in the business of selling consumer items to a buyer for use or

 

consumption and not for resale.

 

     (h) "Total price" means the full purchase price of a consumer

 

item, excluding sales tax and container deposit.

 

     Sec. 3. (1) All of the following apply to the director of the

 

department of agriculture and rural development:

 

     (a) He or she is responsible for the implementation and


 

administration of sections 7 and 8.

 

     (b) He or she shall investigate complaints concerning

 

violations of sections 7 and 8 and conduct any other investigations

 

he or she considers advisable.

 

     (c) As the state director of weights and measures, he or she

 

shall promulgate rules under the administrative procedures act of

 

1969, 1969 PA 306, MCL 24.201 to 24.328, to implement and

 

administer sections 7 and 8.

 

     Sec. 4. (1) A person shall not knowingly advertise the

 

availability of a consumer item for sale at retail at a sale or

 

special price, or as being reduced in price by an amount or

 

proportion, unless the advertisement meets all of the following:

 

     (a) It includes the dates that item is available at the

 

advertised price, or the quantity available at the advertised

 

price.

 

     (b) If applicable, it states that the item is available at

 

that price only as long as the advertised quantity lasts or as long

 

as quantities or supplies last.

 

     (c) If there is a limitation on the quantity available of a

 

consumer item to each customer, that limitation is clearly

 

disclosed.

 

     (2) If a person advertises a consumer item at a specific price

 

that is not indicated to be a special, sale, or reduced price, the

 

advertiser shall do 1 of the following:

 

     (a) Make the consumer item available at the advertised price

 

for not less than 5 days after the date the consumer item was last

 

advertised. If the item is not available for that period of time,


 

the requirements of subsection (3) apply. The advertiser is not

 

required to make the consumer item available nor fulfill the

 

requirements of subsection (3) if the unavailability of the

 

consumer item is due to a governmental action, a plant closing, or

 

an act of God and if the specific cause of the unavailability of

 

the consumer item is posted conspicuously for review by the

 

consumer.

 

     (b) Indicate in the advertisement the dates the consumer item

 

is available at the advertised price. If the item is not available

 

for those dates, the requirements of subsection (3) apply.

 

     (c) Indicate in the advertisement the quantity of the consumer

 

item that is available at the advertised price and include in the

 

advertisement that the consumer item is available at the advertised

 

price only as long as the stated quantity lasts.

 

     (3) If an advertisement under this section does not state the

 

quantity of a consumer item available or meet the requirements of

 

subsection (1) or (2)(c), and if the consumer item cannot be sold

 

at the advertised price throughout the advertised period of sale,

 

the advertiser shall make available to the customer a written

 

guarantee to deliver under the advertised conditions the consumer

 

item at a future date stated in the guarantee, or when notified by

 

the advertiser that the item is available. If the advertised

 

consumer item cannot be obtained to satisfy the condition of the

 

guarantee, the advertiser may provide a similar consumer item of

 

equal or greater monetary value.

 

     (4) If an advertiser elects in a written guarantee under

 

subsection (3) to notify a consumer when a consumer item will be


 

available, the notification of availability shall take place within

 

90 days after the guarantee is given. After the notice of

 

availability is given, the advertiser shall hold the consumer item

 

for delivery to the customer for at least 7 days, except the

 

advertiser is required to hold the consumer item for only 2 days if

 

it is a perishable item.

 

     (5) This section does not apply to baked goods, fresh fruit,

 

or fresh vegetables.

 

     Sec. 5. (1) A person shall not knowingly make, publish,

 

disseminate, circulate, or place before the public an advertisement

 

that contains a statement or representation that is untrue,

 

deceptive, or misleading.

 

     (2) A failure to sell goods, merchandise, or commodities in

 

the manner advertised, or a refusal to sell at the price at which

 

they are advertised or in accordance with other terms and

 

conditions of the advertisement, creates a rebuttable presumption

 

of an intent to violate this act.

 

     (3) For purposes of this section, the extent to which an

 

advertising fails to reveal facts that are material in light of the

 

representations made or suggested in a positive manner shall be

 

considered in determining whether the advertising is deceptive or

 

misleading.

 

     (4) A person shall not make, publish, disseminate, circulate,

 

or place before the public an advertisement with the intent,

 

design, or purpose not to sell the goods, merchandise, or

 

commodities at the price stated in the advertisement or otherwise

 

communicated, or with intent not to sell the goods, merchandise, or


 

commodities included in the advertisement.

 

     (5) A person shall not advertise, call attention to, or give

 

publicity to the sale of goods, merchandise, or commodities that

 

the person knows are not first class, if the manufacturer of those

 

goods, merchandise, or commodities has rejected them as not first

 

class, unless there is displayed directly in connection with the

 

name and description of the goods, merchandise, or commodities, a

 

direct and unequivocal statement, phrase, or word that clearly

 

indicates that the advertised goods, merchandise, or commodities

 

are seconds or are blemished goods, merchandise, or commodities, or

 

have been rejected by the manufacturer of the goods, merchandise,

 

or commodities. For purposes of this section, goods, merchandise,

 

or commodities that are advertised, offered for sale, and sold as a

 

unit or set consisting of more than 1 part or piece are

 

sufficiently identified as not first class if advertised, offered

 

for sale, and sold as a unit or set at the single price advertised,

 

and are displayed in connection with a direct and unequivocal

 

statement, phrase, or word identifying the goods as not first

 

class. As used in this subsection, "not first class" means the

 

goods, merchandise, or commodities are substantially defective or

 

consist of articles or units or parts commonly referred to as

 

seconds or blemished goods, merchandise, or commodities.

 

     Sec. 6. Sections 4 and 5 do not apply to an owner, publisher,

 

printer, agent, or employee of a newspaper, a person that publishes

 

any other publication, periodical, or circular, including a

 

circular prepared for national distribution, a person that provides

 

outdoor advertising, or a radio or television station, if that


 

person in good faith and without knowledge of the falsity or

 

deceptive character of the advertisement, publishes, causes to be

 

published, or takes part in the publication of an advertisement

 

that violates section 4 or 5.

 

     Sec. 7. (1) Except as otherwise provided in subsection (2), a

 

person shall display the total price of a consumer item offered for

 

sale at retail at the place of the retail sale.

 

     (2) Subsection (1) does not apply to any of the following:

 

     (a) A consumer item that is sold by weight or volume and is

 

not in a package or container.

 

     (b) A consumer item sold in a coin-operated vending machine.

 

     (c) Prepared food intended for immediate consumption, as

 

defined in section 4g of the general sales tax act, 1933 PA 167,

 

MCL 205.54g.

 

     (d) A consumer item purchased by mail or through catalog

 

order, or that is not otherwise visible for inspection by the

 

consumer at the time of the sale, and that is ordered or requested

 

by the consumer, if the price of the consumer item is on the

 

consumer's written order or request or on a bill, invoice, or other

 

notice that describes or names the consumer item and is enclosed

 

with the consumer item.

 

     (e) An unpackaged food item.

 

     (f) A consumer item that has a total weight of not more than 3

 

ounces, a total volume of not more than 3 cubic inches, and a total

 

price of not more than 30 cents.

 

     (g) Live plants.

 

     (h) Live animals.


 

     (i) Motor vehicles.

 

     (j) Motor vehicle parts.

 

     (k) Packages of 20 or fewer cigarettes.

 

     (l) Greeting cards that are sold individually and have a

 

readable coded price on the back of the card.

 

     (m) Merchandise that is ordered as a gift by a consumer and is

 

sent by mail or other delivery service to a person other than the

 

consumer by the retailer at the request of the consumer.

 

     Sec. 8. (1) A person shall not knowingly charge or attempt to

 

charge for a consumer item that is subject to section 7 a retail

 

sale price that is higher than the price displayed for that item.

 

     (2) It is not a violation of subsection (1) to charge a total

 

price for a consumer item that is subject to section 7 that is less

 

than the price displayed for that item.

 

     (3) It is prima facie evidence of a violation of this section

 

if a price a person charges or attempts to charge for a consumer

 

item that is subject to section 7 is established by electronic

 

identification or calculation by an automatic checkout system and

 

that price exceeds the price displayed for that item.

 

     Sec. 9. (1) Except as provided in subsection (4), this section

 

applies to a sale at retail that meets all of the following

 

conditions:

 

     (a) There is a price displayed for the consumer item.

 

     (b) The sale is recorded by an automatic checkout system.

 

     (c) The buyer is given a receipt that describes the item and

 

states the price charged for the item.

 

     (2) Before bringing or joining in an action under section


 

12(2), within 30 days after purchasing a consumer item, a buyer who

 

suffers loss because the price charged for the item is more than

 

the price displayed for that item shall notify the seller in person

 

or in writing that the price charged is more than the price

 

displayed for that item. The notice shall include evidence of the

 

loss suffered by the buyer. If the seller pays the buyer 1 of the

 

following amounts within 2 days after the seller receives

 

notification under this subsection, the buyer is barred from any

 

further recovery for that loss:

 

     (a) Unless subdivision (b) applies, an amount equal to the

 

difference between the price displayed and the price charged for

 

the consumer item, plus an amount equal to 10 times that difference

 

but that is not less than $1.00 or more than $5.00.

 

     (b) If a loss is suffered by a buyer on 2 or more identical

 

consumer items in a single transaction, an amount equal to the

 

difference between the price displayed and the price charged for

 

each of those identical items, plus an amount equal to 10 times

 

that difference for 1 of the identical items but that is not less

 

than $1.00 or more than $5.00.

 

     (3) If a seller does not pay a buyer who suffers a loss

 

described in subsection (2) the amount described in that subsection

 

for that loss, the buyer may bring or join in an action against the

 

seller under section 12(2).

 

     (4) This section does not apply to a sale at retail in which

 

the seller intentionally charges more for a consumer item than the

 

price displayed for the item.

 

     Sec. 10. (1) The attorney general may maintain an action to


 

enjoin a continuing violation of this act. If the court finds that

 

the defendant is violating or has violated this act, it shall

 

enjoin the defendant from continuing that violation. It is not

 

necessary that actual damages to a person are alleged or proved for

 

a court to enjoin a defendant under this section.

 

     (2) The attorney general shall not institute a proceeding for

 

an injunction under this section unless the attorney general has

 

notified the defendant of his or her intention to seek an

 

injunction if the defendant does not cease and desist or take

 

positive action to cease and desist from continuing to act in a

 

manner that violates this act. The attorney general must provide

 

this notice at least 48 hours before instituting the proceeding. A

 

court shall not issue the injunction if the defendant ceased, or

 

took positive action to cease and desist, violating this act after

 

receiving the notice from the attorney general.

 

     (3) The attorney general may accept an assurance of

 

discontinuance of an act or practice alleged to be a violation of

 

this act from the person engaging in, or that was engaged in, that

 

act or practice. An assurance of discontinuance shall be in writing

 

and be filed with the clerk of the circuit court of the county in

 

which the alleged violator resides or has its principal place of

 

business. A filing fee is not required for the filing of an

 

assurance of discontinuance with the clerk of the circuit court. An

 

assurance of discontinuance shall be signed by the alleged violator

 

and shall contain a statement describing each act or practice to

 

which the assurance of discontinuance applies and the specific

 

provisions of this act prohibiting that act or practice. An


 

assurance of discontinuance is not considered an admission of any

 

fact or issue at law.

 

     (4) If a prosecuting attorney or law enforcement officer

 

receives notice of an alleged violation of this act, of a violation

 

of an injunction, order, decree, or judgment issued in an action

 

brought under this section, or of an assurance of discontinuance

 

given under subsection (3), he or she shall immediately forward

 

written notice of the violation, and any information he or she has

 

concerning the violation, to the office of the attorney general.

 

     (5) A person that knowingly violates this act or the terms of

 

an injunction, order, decree, or judgment issued under this section

 

shall pay to the state a civil fine of not more than $1,000.00 for

 

the first violation and not more than $5,000.00 for the second and

 

any subsequent violation. For the purposes of this subsection, the

 

court that issues an injunction, order, decree, or judgment under

 

this section retains jurisdiction, the action is continued, and the

 

attorney general may petition for recovery of the civil fine

 

described in this subsection.

 

     (6) The attorney general may promulgate rules to implement and

 

administer this act under the administrative procedures act of

 

1969, 1969 PA 306, MCL 24.201 to 24.328.

 

     Sec. 11. (1) For the fiscal year ending September 30, 2011,

 

$100,000.00 is appropriated from the general fund to the department

 

of attorney general to develop and implement a public consumer

 

education program to provide general information and advice

 

regarding the advertising and pricing requirements of this act and

 

the remedies available to consumers under this act.


 

     (2) The attorney general shall establish and maintain an

 

internet website available to the public that provides general

 

information and advice regarding the advertising and pricing

 

requirements of this act and the remedies available to consumers

 

under this act.

 

     (3) The appropriation made and the expenditures authorized

 

under this section and the department of attorney general are

 

subject to the management and budget act, 1984 PA 431, MCL 18.1101

 

to 18.1594.

 

     Sec. 12. (1) Whether or not a person seeks damages or has an

 

adequate remedy at law, a person may bring an action to do either

 

or both of the following if the attorney general or prosecuting

 

attorney fails to initiate action within 60 days after receiving

 

notice of an alleged violation of this act:

 

     (a) Obtain a declaratory judgment that an act or practice

 

violates this act.

 

     (b) Enjoin by temporary or permanent injunction a person that

 

is engaging or is about to engage in an act or practice that

 

violates this act.

 

     (2) Except as provided in section 9, a person that suffers

 

loss as a result of a violation of this act may bring an individual

 

or a class action to recover actual damages or $250.00, whichever

 

is greater, for each day on which a violation of this act is found,

 

together with reasonable attorneys' fees that do not exceed $300.00

 

in an individual action.

 

     Sec. 13. A prosecuting attorney may conduct an investigation

 

under this act and may institute and prosecute an action under this


House Bill No. 4158 as amended March 17, 2011

 

act in the same manner as the attorney general.

 

     Sec. 14. (1) The remedies provided under this act are the

 

exclusive remedies for violations of section 4, 7, 8, or 9.

 

     (2) A city, village, township, or county shall not enact an

 

ordinance or other regulation that is inconsistent with this act or

 

with a rule promulgated under this act.

 

     <<Enacting section 1. 1976 PA 449, MCL 445.351 to 445.364, is

repealed effective September 1, 2011.

 

     Enacting section 2. This act takes effect September 1, 2011.>>