Nicholas T. Long v. Dell, Inc. , 93 A.3d 988 ( 2014 )

Supreme Court
No. 2012-248-Appeal.
No. 2012-249-Appeal.
(PB 03-2636)
Nicholas T. Long et al. :
v. :
Dell, Inc., et al. :
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island,
250 Benefit Street, Providence, Rhode Island 02903, at Telephone
222-3258 of any typographical or other formal errors in order that
corrections may be made before the opinion is published.
Supreme Court
No. 2012-248-Appeal.
No. 2012-249-Appeal.
(PB 03-2636)
(Dissent and concurrence begin on Page 28)
Nicholas T. Long et al. :
v. :
Dell, Inc., et al. :
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
OPINION
Justice Goldberg, for the Court. In this putative class action, the plaintiffs allege that
Dell1 violated the Deceptive Trade Practices Act (DTPA), G.L. 1956 chapter 13.1 of title 6, and
that Dell was negligent by improperly collecting sales taxes on certain services purchased in
conjunction with the sales of its computer products. A justice of the Superior Court granted
summary judgment in favor of Dell on both counts. This case has been pending for more than
ten years and thus far has resulted in two opinions of this Court. It is not over. For the reasons
set forth below, we affirm the grant of summary judgment on the negligence count and on the
request for injunctive relief by the plaintiff, Nicholas T. Long. However, the grant of summary
judgment on the DTPA count by the plaintiff Julianne Ricci is vacated. Additionally, we affirm
1
The named defendants are Dell Computer Corporation, Dell Catalog Sales Limited Partnership,
Dell Marketing Limited Partnership, QualxServ, LLC, and BancTec, Inc. The nuances of the
legal relationships among these entities were discussed in our previous opinions in this case. See
Long v. Dell, Inc., 984 A.2d 1074, 1076 (R.I. 2009); DeFontes v. Dell, Inc., 984 A.2d 1061,
1062 (R.I. 2009). In this opinion, “Dell” and “defendants” refer to the collective Dell entities
(Dell Computer Corporation, Dell Catalog Sales Limited Partnership, and Dell Marketing
Limited Partnership).
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the Superior Court justice’s grant of the plaintiffs’ motion to strike the tax administrator’s
affirmative defenses.2
Facts and Travel
This Court discussed the facts of this case in detail in two previous opinions. See Long v.
Dell, Inc., 984 A.2d 1074, 1075-78 (R.I. 2009); DeFontes v. Dell, Inc., 984 A.2d 1061, 1062-65
(R.I. 2009). Therefore, we will only recount recent events and those facts that are necessary for
context.
The named plaintiffs, Nicholas Long (Long) and Julianne Ricci (Ricci) (collectively and
on behalf of the putative class, plaintiffs), purchased Dell computers in late 2000. Along with
their computers, they also selected an optional service contract, which essentially amounted to an
extended warranty on the computers.3 As the receipt for payment, Ricci received a three-page
“acknowledgment” with her order. The first item listed on the acknowledgement is a
“Dimension 4100 Series, Pentium Processor at 866 MHz”—presumably the main computer
component. The “Unit Price” and “Amount” set forth for this item were both “1,576.00.” The
next thirty lines in the acknowledgement contained different item numbers and product
descriptions, all of which set forth the “Unit Price” and “Amount” as “0.00.” Finally, a printer
cable was listed with a “Unit Price” and “Amount” of “24.95.” A box on the front page of the
acknowledgement summarized the charges. The computer, the printer cable, and a shipping and
handling charge of $105 brought the subtotal to $1,705.95. The box also set forth that $233 of
that amount was taxable, and thus a tax of $16.31 was added. The total paid by Ricci to Dell was
$1,722.26. Ricci purchased her computer for personal use.
2
We consolidate the two appeals for purposes of this opinion.
3
These service contracts were actually third-party contracts, whereby third parties, including
defendants BancTec and QualxServ, would handle any repairs. Long, 984 A.2d at 1076.
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Long received a similar “acknowledgment” with his order. Only the first line contained a
“Unit Price” and “Amount”—both were “2,804.00.” The summary box added a shipping and
handling charge of $35 for a subtotal of $2,839. The box denoted that the entire $2,839 subtotal
was taxable and charged $198.73 in tax. Thus, Long ultimately paid a total of $3,037.73 to Dell.
Unlike Ricci, Long purchased his Dell computer for business purposes.
This class action lawsuit commenced in May 2003.4 The crux of the complaint is that
Dell charged both Ricci and Long sales tax on nontaxable services.5 The two-count complaint
alleged that defendants violated the DTPA and were liable for negligence. In their prayer for
relief, plaintiffs requested damages, as well as declaratory and injunctive relief. The defendants
moved to stay the proceedings and compel arbitration, arguing that by accepting delivery of the
goods, plaintiffs agreed to the terms and conditions agreement, which contained an arbitration
provision. The Superior Court justice denied that motion and entered an order of final judgment
on March 29, 2004. The defendants appealed from that judgment.
In March 2005, Dell requested a determination from the Rhode Island Division of
Taxation regarding the application of the sales and use tax. The Division of Taxation responded
with a letter ruling.6 The letter ruling, which was written by the Chief Revenue Agent, began its
4
Mary DeFontes initially filed this action, but she is no longer a plaintiff. See DeFontes, 984
A.2d at 1062, 1072. Long joined the suit as a plaintiff in July 2003. Id. at 1062. Ricci replaced
DeFontes in June 2005, upon discovery that DeFontes was an employee of plaintiffs’ counsel.
Id. at 1065.
5
There is no allegation that Dell retained the tax collected; it is undisputed that Dell remitted the
tax collected to the state.
6
The Division of Taxation describes a “letter ruling” as follows:
“A General Informational Letter, (commonly referred to as a ‘Letter Ruling’) is
unlike a Declaratory Ruling in that it generally seeks an interpretation of tax law
or regulation without applying it to a specific set of facts. A General
Informational Letter may be issued where it appears that general information only
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discussion by referencing Regulation SU 00-126, entitled “Optional Service, Maintenance, and
Extended Warranty Contracts,” which stated, inter alia, that “[t]he charge for the optional
service, maintenance, or extended warranty contract is not subject to tax when such a charge is
separately stated by the retailer to the purchaser.” The letter stated that “[t]he intent of the
regulation is to exempt an optional service, maintenance, and extended warranty contract from
sales tax when the contract is optional to the buyer, and the charge is separately stated by the
retailer to the purchaser.” Initially, the ruling stated that when a Dell invoice or acknowledgment
“provided to a customer showed a total sales price for all items in the order and a unit price of
‘0.00[’] for each individual item, including the service contract and extended warranty, the sales
tax was properly applied to the total sales price.” Directly applying the facts here, however, the
letter concluded, “Since the service contract is optional to the buyer and a separate charge under
‘taxable amount’ is noted elsewhere on the invoice or acknowledgement as being for a 3rd party
service contract, [Dell] Catalog should not have imposed the sales tax.”
In March 2007, while the appeal of the order denying the motion to compel arbitration
was pending, defendants moved for summary judgment. In response, plaintiffs requested that the
Tax Administrator for the Rhode Island Division of Taxation (the tax administrator) be notified
of the proceeding because defendants’ contentions on summary judgment implicated Rhode
Island tax law. The tax administrator then moved to intervene in the case. The Superior Court
justice permitted the tax administrator to intervene solely “for the purpose of appearing and
is requested, or where a request for a Declaratory Ruling does not comply with all
the requirements for a Declaratory Ruling. General Informational Letters may not
be relied upon by any taxpayer other than the taxpayer who requested the
information. General Informational [L]etters are not binding on the Tax Division
if there has been a misstatement or omission of material facts or, on a prospective
basis, if there has been a change in law or applicable regulations or a decision on
point is issued by the Rhode Island or Federal Courts.” Regulation DR 03-01.
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being heard on the issues of subject matter jurisdiction, the proper interpretation and construction
of tax regulations and statutes, and the application and constitutional validity of tax statutes.”
The tax administrator moved to dismiss the case for lack of subject-matter jurisdiction. The
Superior Court justice denied the motion to dismiss. The defendants and the tax administrator
petitioned this Court for writs of certiorari to review the question of subject-matter jurisdiction,
and we granted the petitions.
On December 14, 2009, this Court issued separate opinions on these preliminary issues.
In DeFontes, 984 A.2d at 1073, we held that the Superior Court justice properly denied
defendants’ motion to compel arbitration because plaintiffs did not agree to be bound by the
terms and conditions in the shrinkwrap agreement contained in the computer’s packaging. In
Long, 984 A.2d at 1081, we held that that the Superior Court had subject-matter jurisdiction over
the DTPA claim and ancillary jurisdiction over the negligence claim. We remanded the case to
the Superior Court. Id. at 1082.
With the arbitration and subject-matter jurisdiction issues resolved, the Superior Court
turned to defendants’ summary judgment motion. First, the Superior Court justice decided to
consider only the facts and claims of the individual plaintiffs—not the purported class of
plaintiffs—because the class had not yet been certified. Additionally, he noted that after his
previous decision and this Court’s opinions, the only claims that remained as to Long were those
seeking equitable or declaratory relief because Long’s claims under the DTPA and for
negligence had been dismissed. Addressing those claims, the Superior Court justice concluded
that the prayer to enjoin defendants from collecting improper taxes was moot because there was
no evidence to suggest that defendants continue to improperly collect the tax. Accordingly, for
purposes of summary judgment, the Superior Court justice considered “only the claims of
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improper collection of tax on the optional service contract, as evidenced in Ricci’s
acknowledgment of her purchase of a Dell computer, and the facts associated therewith.”
Next, the Superior Court justice concluded that Ricci should not have been charged a
sales tax on her service contract. Although service contracts were not taxable in Rhode Island,
Dell contended that Rhode Island Tax Regulation SU 00-126, which provided that “[t]he charge
for the optional service, maintenance or extended warranty contract is not subject to tax when
such charge is separately stated by the retailer to the purchaser,” nonetheless mandated that a tax
be charged because Dell contends the “acknowledgement” it sent to Ricci did not separately state
the service contract price. However, in its 2005 letter ruling, the Division of Taxation concluded
that Dell’s “acknowledgement” did, in fact, separately state the service contract price, and Dell
should not have taxed the service contract. Based on the letter ruling, the tax regulation, and the
opinions of this Court, in particular language from our opinion in Long, the Superior Court
justice found that Dell improperly charged Ricci $16.31 in sales tax on the optional service
contract.
Having concluded that Ricci was improperly taxed, the Superior Court justice next
addressed Dell’s legal arguments that it was nonetheless not liable under the DTPA or in
negligence.7 Addressing the negligence claim, he concluded that “[a] seller’s duty with regard to
the collection of sales tax is to the State, not the consumer.” He reasoned that the seller is
subject to state penalties for failing to properly remit sales taxes to the state. Further, he noted
that there is little incentive for a seller to over-collect taxes. Comparatively, any injury to a
consumer is relatively minor. Finally, consumers now have an independent right to seek a
7
The trial justice concluded that three other theories—DTPA exemption for collection of sales
tax, sovereign immunity, and unclean hands—did not preclude Dell’s potential liability to Ricci.
Dell did not raise these issues on appeal.
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refund if they are inappropriately taxed. Accordingly, the Superior Court justice concluded that
Dell did not owe a duty to Ricci, and therefore Ricci did not have an actionable tort claim.
Turning to the DTPA claim, the Superior Court justice first addressed whether the
practice was “unfair.” The court concluded that “Dell’s honest misinterpretation of a delicate
area of the state tax law cannot be held to be an unfair act.” The Superior Court justice noted
that Ricci did not come forth with any evidence tending to prove that Dell acted immorally or
unethically. He also questioned whether Ricci’s monetary injury of $16.31 was “substantial.”
Next, the court addressed whether Dell’s actions were “deceptive” under the DTPA. Although
the Superior Court justice found that charging a sales tax constituted a representation that was
misleading, he concluded that the misrepresentation was not “material” to constitute a deceptive
act under the statute because it was so paltry as to have no effect on Ricci’s decision to purchase
the product.8 Accordingly, the court concluded that “as a matter of law, Dell’s actions did not
constitute negligence or violate the DTPA.”
In the same decision, the Superior Court justice also addressed plaintiffs’ motion to strike
the tax administrator’s affirmative defenses.9 Noting that no claims had been asserted against the
tax administrator and that the conditions precedent to the allegedly conditional defenses had not
arisen in this case, the Superior Court justice struck the defenses as immaterial under Rule 12(f)
of the Superior Court Rules of Civil Procedure.
On April 9, 2012, an order and final judgment entered, granting defendants’ motion for
summary judgment and plaintiffs’ motion to strike. The plaintiffs appealed the order granting
8
The Superior Court justice drew this conclusion from Ricci’s deposition testimony, where she
stated that she did not care about the sales tax, only the total price of the computer.
9
The affirmative defenses were (1) statute of limitations; (2) unclean hands; (3) “he who
demands equity must do equity”; (4) setoff and recoupment; (5) statutory setoff; (6) failure to
state a claim upon which relief may be granted; and (7) failure to exhaust administrative
remedies.
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summary judgment to defendants, and the tax administrator appealed the order striking his
affirmative defenses.
Standard of Review
“[T]his Court reviews a grant of summary judgment de novo.” Sullo v. Greenberg, 68
A.3d 404, 406 (R.I. 2013) (quoting Sacco v. Cranston School Department, 53 A.3d 147, 149-50
(R.I. 2012)). We examine the case “from the vantage point of the trial justice who passed on the
motion for summary judgment, [and] ‘[w]e view the evidence in the light most favorable to the
nonmoving party * * *.’” Id. (quoting Sacco, 53 A.3d at 150). In performing this review, we
draw all reasonable inferences in favor of the nonmoving party. See Peloquin v. Haven Health
Center of Greenville, LLC, 61 A.3d 419, 424-25 (R.I. 2013) (noting that “the facts and all
reasonable inferences therefrom” are viewed “in the light most favorable to the nonmoving
party”) (quoting Derderian v. Essex Insurance Co., 44 A.3d 122, 126-27 (R.I. 2012)).
“Ultimately, the ‘purpose of the summary judgment procedure is issue finding, not issue
determination.’” DeMaio v. Ciccone, 59 A.3d 125, 130 (R.I. 2013) (quoting Estate of Giuliano
v. Giuliano, 949 A.2d 386, 391 (R.I. 2008)). Summary judgment is appropriate only when “there
is no genuine issue as to any material fact and * * * the moving party is entitled to judgment as
[a] matter of law.” Sola v. Leighton, 45 A.3d 502, 506 (R.I. 2012) (quoting Plunkett v. State,
869 A.2d 1185, 1187 (R.I. 2005)). If the evidence submitted permits an inference that creates a
genuine issue of material fact, the motion must be denied. See DeMaio, 59 A.3d at 132 (holding
that a Superior Court justice may not choose between conflicting inferences at summary
judgment stage). “[S]ummary judgment is a drastic remedy, and a motion for summary
judgment should be dealt with cautiously.” Cruz v. DaimlerChrysler Motors Corp., 66 A.3d 446,
451 (R.I. 2013) (quoting DeMaio, 59 A.3d at 129).
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Furthermore, this case presents the issue of whether, for purposes of a motion for
summary judgment, the Court should treat the alleged class as certified, or whether the Court
should only consider the facts pertaining to the named plaintiffs.10 At the outset of his analysis,
the Superior Court justice stated, “Because the class is not certified, this Court will consider the
[m]otion on the facts and claims of the individually-named Plaintiffs, and not those of any
purported class.” The defendants contend that this is the correct approach and cite federal case
law purporting to support that proposition. The plaintiffs, however, argue that the Court must
treat the class as certified because the Court views the evidence in the light most favorable to the
nonmoving party at the summary judgment stage.
This Court previously has stated that, “[b]ecause we review this evidence in the light
most favorable to plaintiffs [i.e., the nonmoving party], to the extent that it relates to our
decision, we treat this case as though it were certified as a class action.” Chavers v. Fleet Bank
(RI), N.A., 844 A.2d 666, 679 n.12 (R.I. 2004). We adhere to that reasoning in the case at bar.
Such a rule is most consistent with our summary judgment jurisprudence, which requires that,
when performing de novo review, we view the evidence in the light most favorable to the
nonmoving party. See Sullo, 68 A.3d at 406. Furthermore, this approach promotes the class
action objectives of compensation for small injuries and efficiency. See 1 William B.
Rubenstein, Newberg on Class Actions § 1:7 at 17-21 (5th ed. 2013) (noting that, when
individual claims are for small amounts of money, a class action is the only practical means to
10
The defendants contend that plaintiffs waived this issue by failing to claim it as a ground of
error in their opening brief. We disagree. Although plaintiffs did not address the issue in the
context of the standard of review, they did contend that it was “plain error” for the Superior
Court justice to question whether the improperly charged sales tax caused substantial injury
because the class had not been certified; for this proposition, plaintiffs cited Chavers v. Fleet
Bank (RI), N.A., 844 A.2d 666, 679 n.12 (R.I. 2004). Thus, we are satisfied that plaintiffs
sufficiently raised the issue, and it is appropriately before the Court.
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seek compensation); id. § 1:9 at 26 (“Aggregate litigation promotes administrative efficiency.”).
This principle of treating the class as certified, however, does not mean that a plaintiff can
simply multiply a small injury to an individual plaintiff by a large number with no basis in fact.
There must be evidence in the record from which a factfinder could infer facts that may apply
class-wide.
The legal basis underpinning the cases cited by defendants is that a precertification ruling
does not bind absent class members. While that is true, we decline to draw the conclusion that
such a rule then compels this Court to disregard the procedural standard when confronted with a
summary judgment motion. The question of who will be bound by a judgment is markedly
different from the question of what is the appropriate decisional standard. Furthermore, none of
the cases cited by defendants addresses the unique summary judgment issue that confronts us in
this case. In Lewis v. Casey, 518 U.S. 343, 357-58 (1996), the United States Supreme Court
merely commented that the named plaintiffs in a class action must have standing. Also, the
Court was reviewing a bench trial; it was not reviewing a summary judgment ruling. Id. In
Jackson v. Resolution GGF Oy, 136 F.3d 1130, 1132 (7th Cir. 1998), the Seventh Circuit
dismissed a defendant because no individual plaintiff had standing against that defendant; again,
the summary judgment standard was not a concern. Finally, defendants cite a quote from an
unreported trial court decision, Evans v. Taco Bell Corp., CIV. 04CV103JD, 2005 WL 2333841,
at *3, *4 (D.N.H. Sept. 23, 2005), that was made in the context of a motion to strike. There, the
court refused to consider a doctor’s affidavit that contained a medical opinion regarding a person
who was not a plaintiff because the class was not yet certified. Id. at *4. Although the court in
Evans went on to address a summary judgment motion, the relevant issue in that case was direct
evidence submitted regarding a nonparty in an uncertified class action. Id. Treating a class as
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certified for summary judgment purposes—and thus permitting an inference of class-wide injury
from facts in the record—is different from submitting evidence regarding a specific person or
entity that is not a party to the case.
We pause to note that the timing of class certification is a complex question which
depends on the circumstances of each case. See 3 William B. Rubenstein, Newberg on Class
Actions § 7:8 at 38 (5th ed. 2013) (“Given that policy concerns cut different ways in different
circumstances, a court’s decision to consider dispositive motions before or after a ruling on class
certification depends greatly on the individual circumstances of the particular case.”); id. § 7:10
at 48-58 (discussing factors to evaluate timing of class certification to summary judgment). Our
conclusion in this case should not be read as an endorsement of delayed class certification. We
accord great deference to a Superior Court justice’s decision to certify a class. DeCesare v.
Lincoln Benefit Life Co., 852 A.2d 474, 487-88 (R.I. 2004) (“A trial court’s decision to certify a
class is accorded great deference and will not be disturbed unless the trial court misconceived
material evidence, substantially abused its discretion or was otherwise clearly wrong.”). Given
the long duration of this case, however, we must remind the parties that Rule 23(c)(1) of the
Superior Court Rules of Civil Procedure contains a timeliness requirement. See Zarrella v.
Minnesota Mutual Life Insurance Co., 824 A.2d 1249, 1262 n.16 (R.I. 2003) (discussing
timeliness requirement). While we previously have looked to Rule 23 of the Federal Rules of
Civil Procedure for interpretative guidance, we also note that this state has not adopted the 2003
amendments to the federal rule, with its more liberal timeliness requirement. Compare Super. R.
Civ. P. 23(c)(1) (“As soon as practicable after the commencement of an action brought as a class
action, the court shall determine by order whether it is to be so maintained.”), with Fed. R. Civ.
P. 23(c)(1)(A) (“At an early practicable time after a person sues or is sued as a class
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representative, the court must determine by order whether to certify the action as a class
action.”). But cf. 3 Rubenstein, § 7:5 at 24 (“By excising the ‘as soon as’ formulation, the new
language gives courts more time to address certification, bringing the rule in line with what had
become a de facto practice even under the older, more urgent language.”).
Analysis
I
Motion for Summary Judgment
Negligence
In count 2 of the complaint, plaintiffs allege that Dell breached its duty “to properly
calculate and collect sales tax * * * due on purchases made by Rhode Island residents and
businesses.” The defendants argue that no such duty exists, and, therefore, the Superior Court
justice properly granted summary judgment to defendants on count 2.
“To properly set forth a claim for negligence, a plaintiff must establish a legally
cognizable duty owed by a defendant to a plaintiff, a breach of that duty, proximate causation
between the conduct and the resulting injury, and the actual loss or damage.” Brown v. Stanley,
84 A.3d 1157, 1161-62 (R.I. 2014) (quoting Willis v. Omar, 954 A.2d 126, 129 (R.I. 2008)). If a
defendant does not owe a legal duty to the plaintiff, then the defendant cannot be liable for
negligence. Id. at 1162.
“It is well settled that ‘[w]hether a defendant is under a legal duty in a given case is a
question of law.’” Brown, 84 A.3d at 1162 (quoting Willis, 954 A.2d at 129). We assess the
question of legal duty on a case-by-case basis, and we examine “all relevant factors, including
the relationship of the parties, the scope and burden of the obligation to be imposed upon the
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defendant, public policy considerations, and notions of fairness.” Gushlaw v. Milner, 42 A.3d
1245, 1252 (R.I. 2012) (quoting Volpe v. Gallagher, 821 A.2d 699, 705 (R.I. 2003)).
The provision of the General Laws that imposes a sales tax provides that a tax “is
imposed upon sales at retail” and “is paid to the tax administrator by the retailer at the time and
in the manner provided.” G.L. 1956 § 44-18-18. The state further effectuates the payment of
taxes by retailers through a number of penalties for failure to properly remit sales taxes to the
state. See, e.g., G.L. 1956 § 44-19-12 (10 percent penalty for deficiency “due to negligence or
intentional disregard of [sales and use tax provisions]”); § 44-19-31 (A retailer may be, “in
addition to any other penalties in this chapter or elsewhere prescribed, guilty of a felony,
punishment for which is a fine of not more than ten thousand dollars ($10,000), or imprisonment
for one year, or both.”). Thus, the retailer’s duty with regard to the tax is to the tax
administrator, not the consumer.
The plaintiffs contend that G.L. 1956 § 44-18.1-26, entitled “Customer refund
procedures,” “constitutes a legislative acknowledgement that Rhode Island law already allow[ed]
a purchaser to seek a return of over-collected sales or use tax from the seller.” Section 44-18.1-
26 provides:
“Customer refund procedures.
“(A) These customer refund procedures are provided to
apply when a state allows a purchaser to seek a return of over-
collected sales or use taxes from the seller.
“(B) Nothing in this section shall either require a state to
provide, or prevent a state from providing, a procedure by which a
purchaser may seek a refund directly from the state arising out of
sales or use taxes collected in error by a seller from the purchaser.
Nothing in this section shall operate to extend any person’s time to
seek a refund of sales or use taxes collected or remitted in error.
“(C) These customer refund procedures provide the first
course of remedy available to purchasers seeking a return of over-
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collected sales or use taxes from the seller. A cause of action
against the seller for the over-collected sales or use taxes does not
accrue until a purchaser has provided written notice to a seller and
the seller has had sixty days to respond. Such notice to the seller
must contain the information necessary to determine the validity of
the request.
“(D) In connection with a purchaser’s request from a seller
of over-collected sales or use taxes, a seller shall be presumed to
have a reasonable business practice, if in the collection of such
sales or use taxes, the seller: (i) uses either a provider or a system,
including a proprietary system, that is certified by the state; and (ii)
has remitted to the state all taxes collected less any deductions,
credits, or collection allowances.”
This provision—a section of the uniform Streamlined Sales And Use Tax Agreement—does not
apply to this case, the events of which took place in 2000, because it was not enacted until 2006
and became effective in 2007. See P.L. 2006, ch. 246, art. 30, §§ 12, 21. Even if § 44-18.1-26
did apply, it merely provides a procedural mechanism to seek recovery; the act did not establish
a new legal tort duty.11
The public policy of the state is to collect taxes that are due and owing. As discussed
above, the General Assembly has chosen to compel retailers to collect the appropriate amount of
taxes by imposing penalties for failure to remit the proper amount of sales tax. If this Court
recognized the duty proposed by plaintiffs, the result would be an opposing incentive to under-
collect sales taxes when the tax law is unclear. This, in turn, would lead to a decrease in the
amount of taxes collected by the state, in contravention of the state’s interest in receiving
revenue. Furthermore, the over-collection of sales taxes by retailers is rarely a problem.
Retailers are under economic pressure to minimize the total price paid by the consumer. A
charge of more sales tax than required typically serves no business purpose—it increases the
11
Notably, plaintiffs did not follow the requisite procedure by providing the written notice
required in G.L. 1956 § 44-18.1-26(C); this is understandable, however, because the statute did
not exist at the time.
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price to consumers (thus making them less likely to buy the product), and it does not increase the
profits of the businesses because the money collected is simply remitted to the state.
Finally, notions of fairness also favor our conclusion that a retailer does not owe a duty
to consumers to properly collect sales tax. As discussed above, retailers already owe a duty to
the state and are subject to penalties for under-collection. It would be untenable to make retailers
subject to state penalties for under-collection and civil suit for over-collection. Such a policy
would force retailers to be perfectly accurate in their tax calculations or face legal action. Given
the complexity of tax law, which is rife with nuance and exceptions, it would be unfair to subject
retailers to this additional duty.
Accordingly, we are satisfied that defendants did not owe a legal duty to plaintiffs
regarding the collection of taxes, and therefore plaintiffs cannot establish the tort of negligence.
The Superior Court justice properly granted defendants’ motion for summary judgment as to
count 2.
Deceptive Trade Practices Act
The heart of this case is plaintiffs’ DTPA claim. The plaintiffs allege that Dell’s
collection of sales tax on service contracts constituted an unfair and deceptive trade practice
under the DTPA. Dell argues that its practice of charging sales tax was neither unfair nor
deceptive and that it was merely following its understanding of Rhode Island tax law at the time.
The Superior Court justice granted summary judgment to defendants on plaintiffs’ DTPA claim.
The DTPA provides that “unfair or deceptive acts or practices in the conduct of any trade
or commerce are declared unlawful.” Section 6-13.1-2. To redress such unlawful practices, the
DTPA provides a private right of action to “[a]ny person who purchases or leases goods or
services primarily for personal, family, or household purposes and thereby suffers any
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ascertainable loss of money or property, real or personal * * *.” Section 6-13.1-5.2(a). The
statute also permits a class action. Section 6-13.1-5.2(b). “It is clear that in enacting the DTPA,
the Legislature intended to declare unlawful a broad variety of activities that are unfair or
deceptive, as well as to provide a remedy to consumers who have sustained financial losses as a
result of such activities.” Park v. Ford Motor Co., 844 A.2d 687, 692 (R.I. 2004). Thus, “[t]he
DTPA is a remedial act and it should be liberally construed.” Long, 984 A.2d at 1081.
This Court has stated that “a plaintiff must establish that he or she is a consumer, and that
defendant is committing or has committed an unfair or deceptive act while engaged in a business
of trade or commerce.” Kelley v. Cowesett Hills Associates, 768 A.2d 425, 431 (R.I. 2001). In
the DTPA, the General Assembly provided interpretive guidance by declaring that “due
consideration and great weight shall be given to the interpretations of the federal trade
commission and the federal courts relating to § 5(a) of the Federal Trade Commission Act.”
Section 6-13.1-3. Different analyses have developed regarding what constitutes an “unfair”
practice and a “deceptive” practice, and we discuss them seriatim.
1. Unfair
To determine whether a trade practice is “unfair” under the DTPA, this Court has stated
that the following factors apply:
“(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).” Ames v. Oceanside Welding
- 16 -
and Towing Co., 767 A.2d 677, 681 (R.I. 2001) (quoting FTC v.
Sperry & Hutchinson Co., 405 U.S. 233, 244-45 n.5 (1972)).12
The plaintiffs need not establish every factor, and they may prove unfairness by showing that a
trade practice meets one factor to a great degree or two or three factors to a lesser degree. See
Cheshire Mortgage Service, Inc. v. Montes, 612 A.2d 1130, 1143-44 (Conn. 1992) (“All three
criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair
because of the degree to which it meets one of the criteria or because to a lesser extent it meets
all three.”) (quoting Statement of Basis and Purpose, Disclosure Requirements and Prohibitions
Concerning Franchising and Business Opportunity Ventures, 43 Fed. Reg. 59,614 and 59,635
(1978)).
12
The Superior Court justice applied these factors, and both parties present their DTPA
arguments in their briefs by applying these factors. Therefore, we will apply these factors here.
Nevertheless, we pause to note that the Federal Trade Commission (FTC) adjusted its
interpretation of unfairness in a 1980 Policy Statement. See FTC Policy Statement on
Unfairness, appended to In re International Harvester Co., 104 F.T.C. 949, 1070 (1984).
Additionally, in 1994, Congress further defined the FTC’s role in determining an unfair trade
practice:
“Standard of proof; public policy considerations
“The Commission shall have no authority under this section
or section 57a of this title to declare unlawful an act or practice on
the grounds that such act or practice is unfair unless the act or
practice causes or is likely to cause substantial injury to consumers
which is not reasonably avoidable by consumers themselves and
not outweighed by countervailing benefits to consumers or to
competition. In determining whether an act or practice is unfair,
the Commission may consider established public policies as
evidence to be considered with all other evidence. Such public
policy considerations may not serve as a primary basis for such
determination.” 15 U.S.C. § 45(n).
What effect the FTC’s 1980 policy statement and 15 U.S.C. § 45(n) have on the unfairness
analysis is not before us.
- 17 -
Addressing the first factor, the Superior Court justice concluded that Dell’s collection of
sales tax on a nontaxable item offended public policy. We agree. Statutes passed by the
Legislature are the state’s declaration of public policy. Thus, acting in contravention of those
laws, as Dell clearly did, violates public policy.13
Regarding the second factor, the Superior Court justice concluded that Dell’s actions
were not “immoral, unethical, oppressive, or unscrupulous.” The Superior Court justice accepted
Dell’s argument that “the charge of sales tax on the optional service contract sold to Ricci was a
good faith, reasonable interpretation of the tax law and regulations in effect.” Further, he stated
that “Dell’s honest misinterpretation of a delicate area of the state tax law cannot be held to be an
unfair act.” Dell takes this conclusion even a step further in its brief by arguing that the DTPA
requires evidence of bad faith. This is incorrect. The DTPA does not require a showing of bad
faith. It only requires an “unfair or deceptive” act or practice. Section 6-13.1-2. While trade
practices undertaken in bad faith are also likely to be unfair or deceptive, bad faith is not the
statutory standard.14
Whether Dell’s sales tax calculation and collection practice was in good faith and
resulted in an honest misinterpretation is a question of material fact. Dell certainly can argue to a
jury that it was acting under a good faith interpretation of tax law and therefore its conduct was
not unfair. However, a jury could also draw the inference that Dell’s efforts to avoid its own tax
nexus with Rhode Island unfairly resulted in consumers being charged for taxes that they should
13
We note that, on appeal, Dell did not challenge the Superior Court justice’s determination that
it was improper for Dell to charge Ricci a tax on the optional service contract.
14
“Bad faith” is defined as “[t]he malicious intention to be dishonest or to violate the law, as in
negotiations over a contract.” American Heritage Dictionary of the English Language 133 (5th
ed. 2011). Neither “unfair” itself nor its elaborative siblings—immoral, unethical, oppressive, or
unscrupulous—carry a connotation of malice necessary to show “bad faith.”
- 18 -
not have been charged.15 Although taking steps to avoid a tax nexus to the state is not illegal, if
those steps include overcharging consumers in order to achieve that goal, a factfinder can
determine the weight of such evidence on the ultimate question of whether Dell’s trade practice
was unfair under the DTPA.
Additionally, the record contains internal records from Dell which make clear that Dell
allocated a certain value to the service contracts. Yet, Dell chose not to clearly list that value in
its acknowledgments sent to consumers. Nevertheless, Dell charged a sales tax on only the
service contract value, and not the full purchase price. We note that a consumer could take a
number of steps to figure out the service contract price: on the acknowledgement, the line items
for the service contract include asterisks; the asterisk denotes, “service contract may be subject to
sales tax”; and the first page of the acknowledgment states, “Dell Catalog Sales collects tax only
in FL, KY, NC, NV, TN & TX. For other states the tax shown relates only to 3rd party service
contracts and the buyer is responsible for remitting any additional tax directly to the taxing
authorities.”16 But it is for a jury to decide which inference to draw from Dell’s decision not to
state clearly the service contract price on its acknowledgment. Indeed, a factfinder could
conclude that Dell deliberately omitted the price of that item, resulting in a tax to the consumer
in order to avoid a tax nexus for its own products. Accordingly, under the second factor in
Ames, a jury could find that Dell’s improper collection of sales tax was immoral, unethical,
oppressive, or unscrupulous. See Ames, 767 A.2d at 681; see also Long, 984 A.2d at 1081
15
Dell did not have a tax nexus to Rhode Island and therefore was not registered with the
Department of Taxation. However, BancTec, a third party contractor that serviced Dell products
under optional service contracts purchased by Dell’s customers, did have a tax nexus to Rhode
Island. Under agreements between Dell and BancTec, Dell was required to collect any
applicable sales and use tax on BancTec’s behalf.
16
It was this combination of information that led the letter ruling to conclude that the service
contract price was, in fact, separately stated for tax collection purposes.
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(noting liberal construction of DTPA); Park, 844 A.2d at 692 (noting legislative intent “to
declare unlawful a broad variety of activities that are unfair or deceptive”).
Regarding the third factor, the Superior Court questioned whether Ricci’s $16.31 loss
constituted a substantial injury. Our conclusion regarding the standard of review becomes
crucially important on this point. If the only injury to be considered in the light most favorable
to plaintiff was $16.31, we may well agree with the Superior Court justice. However, because
we treat the class as certified for purposes of drawing reasonable inferences in favor of the
nonmoving party, and viewing evidence in the most favorable light to the nonmoving party, we
will consider the evidence in the record of potential injury to the class. Chavers, 844 A.2d at 679
n.12. The record contains multiple claims filed with the tax administrator for refunds of sales
taxes remitted by multiple defendants. Dell Marketing LP claimed a refund of $900,000 for the
period October 1, 2001 to December 31, 2003. BancTec, Inc. claimed a refund of $540,454 for
the period October 1, 2001 to December 31, 2003. QualxServ, LLC claimed a refund of
$145,451.07 for the period January 1, 2002 to October 30, 2004. All of these refund claims were
prepared by the same attorney and all contained an explanation that they were “protective
claim[s]” related to the outcome of this litigation. Accordingly, viewing the evidence in the light
most favorable to the nonmoving party, a factfinder could infer an injury of over $1 million to
the class. An injury of such monetary magnitude certainly qualifies as substantial.17
17
The dissent draws a distinction between treating the plaintiff class as certified for purposes of
summary judgment (on which the dissent takes no position) and aggregating the damages of the
plaintiff class (on which the dissent disagrees). First, we reiterate that the aggregation to which
the dissent refers is not automatic or culled out of thin air; an inference of class-wide injury can
be drawn from competent evidence before the trial justice. Regardless, if the class is treated as
certified, for purposes of viewing the evidence in the light most favorable to the nonmoving
party on summary judgment, an inference of class-wide injury should be drawn when competent
evidence permits. Under the dissent’s view, a named plaintiff in a class action must provide
evidence that he or she individually suffered “substantial” injury by a trade practice of the
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Therefore, a factfinder could conclude that Dell’s sales tax calculation and collection
practice offended public policy, was immoral, unethical, oppressive, or unscrupulous, and caused
substantial injury to consumers. Given that all three factors could weigh in favor of plaintiffs, a
factfinder could conclude that the trade practice was unfair under the DTPA.
2. Deceptive
Although this Court has not defined a “deceptive” act or practice under the DTPA, we are
statutorily required to accord great weight to the FTC’s interpretation of § 5(a) of the Federal
Trade Commission Act, and therefore we adopt that standard. Section 6-13.1-3. Therefore, to
prove that a trade practice is deceptive under the DTPA, a plaintiff must set forth three elements:
“[1] a representation, omission, or practice, that [2] is likely to mislead consumers acting
reasonably under the circumstances, and [3], the representation, omission, or practice is
material.”18 F.T.C. v. Verity International, Ltd., 443 F.3d 48, 63 (2d Cir. 2006) (quoting In re
Cliffdale Associates, Inc., 103 F.T.C. 110, 165 (1984)). “The deception need not be made with
intent to deceive; it is enough that the representations or practices were likely to mislead
consumers acting reasonably.” Id.
The Superior Court justice found that “Dell represented that there was sales tax,
misleading the consumers who paid the tax,” but that the sales tax portion of the purchase price
was not material under the DTPA because it had no effect on Ricci’s choice to purchase the
product. Thus, the Superior Court justice found that Dell’s sales tax collection practice was not
deceptive under the DTPA. The plaintiffs argue that Dell’s trade practice was material because it
defendant. This confounds the injury-in-fact requirement for standing—which is satisfied by
Ricci’s $16.31 injury—and the substantial injury prong of the DTPA analysis, and effectively
eliminates the possibility of a class action under the DTPA surviving summary judgment prior to
certification.
18
The Superior Court justice applied this standard, and neither party on appeal suggests that
another standard should apply.
- 21 -
affected how much Ricci would have to pay. Dell argues that charging the tax was not likely to
mislead consumers, and it was not material.
We agree with the Superior Court justice that Dell’s charge of the sales tax was a
representation likely to mislead consumers acting reasonably under the circumstances. Dell
represented that there was a sales tax on the service contract. That representation misled Ricci to
pay the sales tax, when none was in fact due.
Regarding the third element, a representation is material if it “involves information that is
important to consumers and, hence, likely to affect their choice of, or conduct regarding, a
product.” F.T.C. v. Patriot Alcohol Testers, Inc., 798 F. Supp. 851, 855 (D. Mass. 1992)
(quoting Cliffdale Associates, Inc., 103 F.T.C. at 165). Importantly for this case, “[e]xpress
representations that are shown to be false are presumptively material.” Id. (citing Cliffdale
Associates, Inc., 103 F.T.C. at 168, 182). Here, Dell made the express representation that sales
tax was due on the service contract portion of Ricci’s purchase. But that representation was
false. Therefore, Dell’s representation presumptively is material.
Dell points out that Ricci testified in her deposition that she was most concerned with the
bottom-line price rather than the amount of the sales tax. And if she had properly been charged,
i.e., charged no tax, the price would have been lower, thus making her more likely to buy the
product. Nevertheless, on summary judgment, these factors are insufficient to rebut the
presumption of a material misrepresentation. Viewing the evidence in the light most favorable to
plaintiff, the proper amount of sales tax is “information that is important to consumers,” and
defendants’ trade practice affected plaintiffs’ conduct regarding the product—the total price paid
for it. See Patriot Alcohol Testers, Inc., 798 F. Supp. at 855 (quoting Cliffdale Associates, Inc.,
- 22 -
103 F.T.C. at 165). Accordingly, a factfinder could conclude that the practice was deceptive
under the DTPA.
Because a factfinder could conclude that Dell’s practice of charging sales tax on service
contracts was unfair or deceptive under the DTPA, we vacate the grant of summary judgment on
count 1 of the complaint.
Requests for Injunctive and Declaratory Relief
In Long, 984 A.2d at 1078, we noted that “plaintiffs conceded that Mr. Long could not
bring a DTPA claim because his purchase was made for a business purpose.” We also
acknowledged that the Superior Court justice dismissed Long’s claims to “the extent he sought
damages arising from Dell’s alleged negligence,” but that “[i]t is possible that Mr. Long may
have a claim for equitable or declaratory relief—an issue that is not before us.” Id. at 1078 n.8.
In the case at bar, the Superior Court justice addressed the issue of equitable relief on summary
judgment, and he found that “[p]laintiffs’ prayer that the Court enjoin [d]efendants from
collecting the allegedly improper taxes is moot, as Dell no longer collects [such taxes].”
The plaintiffs here allege only two counts—DTPA and negligence. Long’s concession
that he has no DTPA claim because he purchased his computer for business purposes, Long, 984
A.2d at 1078, and our conclusion herein that summary judgment properly was granted on the
negligence count, signal the end to Long’s case because neither cause of action remains.
An injunction is a remedy, not a cause of action. See Thompson v. JPMorgan Chase
Bank, N.A., No. 13-2230, 2014 WL 1586992, at *1 n.1 (6th Cir. Apr. 22, 2014) (“‘Injunctive
relief’ is not a cause of action, it is a remedy.”); Koufos v. U.S. Bank, N.A., 939 F. Supp. 2d 40,
46 (D. Mass. 2013) (“An injunction is not a cause of action, but a remedy.”); see also Davis v.
Passman, 442 U.S. 228, 239-40 n.18 (1979) (noting that a “cause of action is a question of
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whether a particular plaintiff is a member of the class of litigants that may, as a matter of law,
appropriately invoke the power of the court; and relief is a question of the various remedies a
federal court may make available”). Because Long has no underlying cause of action remaining,
he has no right to seek the remedy of injunctive relief. Furthermore, the request for declaratory
relief in the complaint requested a declaration that Dell’s practices were unfair or deceptive
under the DTPA, were unlawful under the DTPA, and were breaches of Dell’s duty to properly
calculate and collect sales tax. Because that request for declaratory relief relates solely to
underlying rights or causes of action unavailable to Long, he may not pursue a declaratory
judgment. Accordingly, the Superior Court justice properly dismissed Long’s requests for
declaratory and injunctive relief. Ricci, however, may be entitled to seek declaratory or
injunctive relief because, as discussed above, her DTPA claim survives, and “[t]he DTPA
provides a private right of action to recover * * * equitable relief for violations of its provisions.”
Long, 984 A.2d at 1080-81 (quoting Chavers, 844 A.2d at 670).
II
Motion to Strike
In a separate appeal, the tax administrator challenges the Superior Court justice’s grant of
a motion to strike the tax administrator’s affirmative defenses. The Superior Court justice struck
the defenses as immaterial under Rule 12(f) of the Superior Court Rules of Civil Procedure
because no claims had been asserted against the tax administrator, and because the conditions
precedent to the allegedly conditional defenses had not arisen in this case. The tax administrator
argues that his affirmative defenses improperly were stricken.
Our discussion begins by addressing the standard of review; this Court has yet to declare
the standard under which we will review a motion to strike in accordance with Rule 12(f). The
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plaintiffs contend that this Court should review a grant of a motion to strike for an abuse of
discretion. The tax administrator argues that the standard of review is de novo.
Rule 12(f) provides: “the court may order stricken from any pleading any insufficient
defense, or any redundant, immaterial, impertinent, or scandalous matter.” This Court has stated
that, “where the Federal rule and our state rule are substantially similar, we will look to the
Federal courts for guidance or interpretation of our own rule.” Heal v. Heal, 762 A.2d 463, 466-
67 (R.I. 2000) (citing Smith v. Johns-Manville Corp., 489 A.2d 336 (R.I. 1985)). Rule 12(f) of
the Federal Rules of Civil Procedure is nearly identical to our state rule. See Fed. R. Civ. P.
12(f) (“The court may strike from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.”).
Federal circuit courts hold that the standard of review of a Rule 12(f) motion to strike is
abuse of discretion. See, e.g., Branch Banking and Trust Co. v. Lichty Bros. Construction, Inc.,
488 F. App’x 430, 434 n.2 (11th Cir. 2012) (“We review a district court’s decision to strike any
defenses that are insufficient as a matter of law for abuse of discretion.”); Whittlestone, Inc. v.
Handi-Craft Co., 618 F.3d 970, 974 (9th Cir. 2010) (noting that “Rule 12(f) motions are
reviewed for ‘abuse of discretion’”) (quoting Nurse v. United States, 226 F.3d 996, 1000 (9th
Cir. 2000)); Cambridge Toxicology Group, Inc. v. Exnicios, 495 F.3d 169, 178 (5th Cir. 2007)
(“This court reviews a motion to strike for abuse of discretion.”); Hatchett v. United States, 330
F.3d 875, 887 (6th Cir. 2003) (“We review the grant of a motion to strike a pleading for abuse of
discretion.”); Nationwide Insurance Co. v. Century Missouri Electric Cooperative, Inc., 278 F.3d
742, 748 (8th Cir. 2001) (“Because a district court enjoys liberal discretion under Rule 12(f), * *
* we review this claim for an abuse of discretion.”). Therefore, we will review this motion to
strike under the abuse of discretion standard.
- 25 -
This is not a tax case, as we already have stated:
“This is a negligence action coupled with a claim alleging
deceptive trade practices. Here, the gravamen of plaintiffs’
complaint is whether Dell (not the tax administrator) committed a
deceptive trade practice by collecting taxes on the purchase of
optional service contracts. The plaintiffs argue that these service
contracts are not taxable in Rhode Island and that Dell, not the tax
administrator, ignored the relevant statutes and regulations when it
collected the tax. The fact that Dell may have paid over the money
to the Division of Taxation does not change this result.” Long, 984
A.2d at 1080.
This case is about allegedly unfair or deceptive trade practices brought against Dell under the
DTPA. While tax issues are implicated by the nature of plaintiffs’ DTPA claim, no party has
filed a claim against the tax administrator in this case. Although some defendants have filed
“protective” claims for refunds with the tax administrator, those claims are, or may become,
separate cases with different standards and can be reviewed under the appropriate procedures
when (or if) a decision in the case before us is made adverse to Dell. Because there are no
claims against the tax administrator, there is nothing for the tax administrator to raise as an
affirmative defense.
Furthermore, the tax administrator’s intervention in this case was limited; the Superior
Court justice permitted the tax administrator to intervene “for the purpose of appearing and being
heard on the issues of subject-matter jurisdiction, the proper interpretation and construction of
tax regulations and statutes, and the application and constitutional validity of tax statutes.” This
Court already has decided the subject-matter jurisdiction issue, and there is no challenge to the
constitutional validity of the tax statutes. Thus, although the tax administrator may still appear
and be heard on the proper interpretation, construction, and application of tax regulations and
statutes, to the extent that these issues become germane, he may not defend against claims that
are illusory in the context of this case. The maintenance of these affirmative defenses only
- 26 -
distracts the parties from the real remaining issue in this case—whether Dell’s practice of
collecting sales tax on service contracts was an unfair or deceptive trade practice.
We pause to note that the tax administrator cannot be collaterally estopped from raising
any defenses that he was precluded from asserting in this case. The resolution of the tax refund
claims is a separate matter. If a party files a claim against the tax administrator in this case,
obviously, he may file an answer and assert affirmative defenses appropriate for the claims
asserted. But unless and until that time comes, the tax administrator’s affirmative defenses are
immaterial. See Super. R. Civ. P. 12(f). Accordingly, the Superior Court justice did not abuse
his discretion by striking the tax administrator’s affirmative defenses.
Conclusion
For the reasons set forth in this opinion, we affirm the Superior Court justice’s rulings on
count 2, negligence, and the declaratory and injunctive relief claims. We also affirm the
Superior Court justice’s order striking the tax administrator’s affirmative defenses. However, we
vacate the Superior Court justice’s ruling on count 1 (DTPA), and we remand the case to the
Superior Court.
- 27 -
Justice Robinson, concurring in part and dissenting in part. I am pleased to be able
to concur with the majority’s ruling concerning: (1) its affirmance of the Superior Court’s grant
of summary judgment in Dell’s favor on count 2 of the complaint (negligence); (2) its affirmance
of the Superior Court’s dismissal of the requests of plaintiff Nicholas T. Long for injunctive and
declaratory relief; and (3) its affirmance of the Superior Court’s granting of plaintiffs’ motion to
strike the tax administrator’s affirmative defenses. However, as for the majority’s vacating the
Superior Court’s granting of Dell’s motion for summary judgment on count 1 of the complaint
(alleging violation of the Deceptive Trade Practices Act), I must respectfully, but very
vigorously, record my dissent. Taking into account settled principles of law as well as the plain
meaning of the following words—immoral, unethical, oppressive, unscrupulous, and material—I
am convinced that no reasonable jury could conclude that Dell violated the Deceptive Trade
Practices Act (DTPA).
I have on several prior occasions insisted on (and I remain committed to) the principle
that the courts should be chary about too unreflectingly disposing of cases pursuant to Rule 56 of
the Superior Court Rules of Civil Procedure. See, e.g., DeMaio v. Ciccone, 59 A.3d 125, 129
(R.I. 2013); Pichardo v. Stevens, 55 A.3d 762, 765-66 (R.I. 2012); Employers Mutual Casualty
Co. v. Arbella Protection Insurance Co., 24 A.3d 544, 553 (R.I. 2011); Shelter Harbor
Conservation Society, Inc. v. Rogers, 21 A.3d 337, 346 (R.I. 2011).
However, being “chary” in that regard is not the equivalent of rendering Rule 56 entirely
nugatory. In my judgment, there is absolutely nothing in the record before us that would justify
a reasonable jury rendering a verdict for Ms. Ricci; and, as such, I am of the decided opinion that
the hearing justice did not err when he granted Dell’s motion for summary judgment on Ms.
Ricci’s DTPA claim. Because the DTPA is violated if a practice is either “unfair or deceptive,” I
- 28 -
shall address the majority’s opinion as to each of those terms seriatim. See G.L. 1956 § 6-13.1-2
(“Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any
trade or commerce are declared unlawful.”) (emphasis added).
With respect to whether or not Dell’s actions in the instant case could be found by a
reasonable jury to have been unfair, I most particularly take issue with the majority’s
determination that it is possible for a reasonable jury to find such actions “immoral, unethical,
oppressive, or unscrupulous.” Ames v. Oceanside Welding and Towing Co., 767 A.2d 677, 681
(R.I. 2001) (internal quotation marks omitted). One need only look to the definitions of those
terms to determine that Dell’s actions simply do not fall within their scope.1 “Immoral” is
defined as “[c]ontrary to established moral principles.” The American Heritage Dictionary of the
English Language 879 (5th ed. 2011). “Unethical” is obviously the antonym of “ethical,” which
is defined as “[b]eing in accordance with the accepted principles of right and wrong that govern
the conduct of a profession * * * .” Id. at 610. “Oppressive” conduct is that which involves
“[e]xercising power arbitrarily and often unjustly;” it is further defined as “tyrannical” and
“[d]ifficult to cope with; causing hardship or depressed spirits * * * .” Id. at 1237. Finally, an
1
I note that this Court has on numerous occasions, in past opinions, relied on dictionary
definitions to provide the plain meaning of certain words. See, e.g., Olamuyiwa v. Zebra
Atlantek, Inc., 45 A.3d 527, 535 (R.I. 2012) (“It is well established that [w]hen * * * a statute
does not define a word, courts will often apply a common meaning as provided by a recognized
dictionary.”) (internal quotation marks omitted); Palin v. Palin, 41 A.3d 248, 250 n. 3, 251 n. 5
(R.I. 2012) (defining “aesthetics” and “[c]osmetology”); Drs. Pass and Bertherman, Inc. v.
Neighborhood Health Plan of Rhode Island, 31 A.3d 1263, 1269 (R.I. 2011) (“This meaning is
consistent with the common sense, dictionary definition of ‘public’ with respect to
expenditures.”); In re Proposed Town of New Shoreham Project, 25 A.3d 482, 513 (R.I. 2011)
(“When, as is the case here, a statute does not define a word, courts will often apply a common
meaning as provided by a recognized dictionary.”) (internal quotation marks omitted). Indeed,
not only does the majority opinion rely on a dictionary definition in footnote 14, but it actually
relies on the same dictionary from which I have extracted the definitions on which I base my
dissent.
- 29 -
action done “unscrupulous[ly]” is done in a manner “[h]aving or showing no regard for what is
right or honorable; devoid of scruples.” Id. at 1899.
After my review of the record and my consideration of the just-quoted definitions, I am in
complete agreement with the hearing justice’s statement that “Dell’s honest misinterpretation of
a delicate area of the state tax law cannot be held [by a reasonable jury] to be an unfair act.” In
my respectful but unblinking view, it defies common sense to contend that charging too much
tax, in an effort to comply with (somewhat confusing)2 state tax regulations, is somehow
contrary to moral principles or is an arbitrary exercise of power. It defies logic even further to
contend that Dell’s actions were “tyrannical” or done with “no regard for what is right or
honorable.” It is clear to me beyond a peradventure that Dell was attempting to charge the
appropriate tax in order to do what was right, honorable, ethical, and moral—namely, to pay the
state of Rhode Island what it believed to be the appropriate amount of sales tax.
The majority opinion states that, while Dell can argue that it was operating under a “good
faith interpretation of tax law,” a jury could also infer that “Dell’s efforts to avoid its own tax
nexus with Rhode Island unfairly resulted in consumers being charged for taxes that they should
not have been charged.” Contrary to the stance adopted by my colleagues in the majority, I am
completely unable to perceive any evidence presented by Ms. Ricci suggesting that Dell’s
actions were anything other than a “good faith interpretation of tax law.” It is a settled legal
principle that the party against whom a motion for summary judgment has been filed “must do
more than simply show that there is some metaphysical doubt as to the material facts.”
Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “The mere
2
I note that the interpretation of the tax regulations at issue was not fully clear until a letter
ruling was obtained from the Division of Taxation on March 16, 2005—approximately five years
after Ms. Ricci bought her Dell computer and the service contract, which form the basis of the
instant case.
- 30 -
existence of a scintilla of evidence in support of the [non-moving party’s] position will be
insufficient; there must be evidence on which the jury could reasonably find for the [non-moving
party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); see also Classic
Entertainment & Sports, Inc. v. Pemberton, 988 A.2d 847, 849 (R.I. 2010) (“In opposing a
motion for summary judgment, the nonmoving party carries the burden of proving by competent
evidence the existence of a disputed issue of material fact and cannot rest on allegations or
denials in the pleadings or on conclusions or legal opinions.”) (internal quotation marks omitted).
Ms. Ricci has failed to provide even such a “scintilla” of evidence; there is nothing in the record
on which a reasonable jury could determine that Dell was acting in any way nefariously or
underhandedly. Thus, summary judgment in Dell’s favor, even where the issue of intent was
arguably involved, was proper. See Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8
(1st Cir. 1990) (“Even in cases where elusive concepts such as motive or intent are at issue,
summary judgment may be appropriate if the non-moving party rests merely upon conclusory
allegations, improbable inferences, and unsupported speculation.”); Meiri v. Dacon, 759 F.2d
989, 998 (2d Cir. 1985) (“The summary judgment rule would be rendered sterile * * * if the
mere incantation of intent or state of mind would operate as a talisman to defeat an otherwise
valid [summary judgment] motion.”); Brule v. Nerac, Inc., 13 A.3d 723, 727 (Conn. App. Ct.
2011) (“Although the determination of whether the parties intended to undertake a contractual
commitment is generally a question of fact * * * when the proposed language could not
reasonably be construed as a basis for a contractual promise, the issue should not be submitted to
the trier of fact.”).
Moreover, in what I consider to be a further departure from common sense, the majority
perceives a possible deception and unfairness in a practice from which Dell does not profit one
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whit. DeFontes v. Dell, Inc., 984 A.2d 1061, 1063 (R.I. 2009) (“There is no allegation that Dell
improperly retained any of the collected tax.”); see State v. Bergevine, 883 A.2d 1158, 1159 (R.I.
2005) (mem.) (“‘That seems to us to be the common sense of the matter; and common sense
often makes good law.’”) (quoting Peak v. United States, 353 U.S. 43, 46 (1957)).
For the reasons which I have just discussed, I must dissent from the majority’s
determination that a genuine issue of material fact remains with respect to whether Dell’s actions
were immoral, unethical, oppressive, or unscrupulous and, accordingly, unfair.3
Turning next to the majority’s determination that a reasonable jury could have found
Dell’s actions to be deceptive, even if I were to accept that those actions are considered a
“practice * * * likely to mislead consumers acting reasonably under the circumstances,” I simply
cannot agree that the actions were material—i.e., that they were likely to affect the consumer’s
choice. F.T.C. v. Verity International, Ltd., 443 F.3d 48, 63 (2d Cir. 2006); see F.T.C. v. Patriot
Alcohol Testers, Inc., 798 F. Supp. 851, 855 (D. Mass. 1992). As was helpful in determining
the issue of unfairness, a dictionary definition of “material” provides helpful contextual guidance
in the present circumstance; and I note that “material” is defined as “[b]eing both relevant and
consequential; crucial.” The American Heritage Dictionary of the English Language 1083 (5th
ed. 2011). Under that definition, even accepting the majority’s statement that false
representations are “‘presumptively material,’” the dearth of evidence tending to show that
3
I recognize that, for the purposes of analyzing a claim under the DTPA, one is not
necessarily required to prove every factor of the articulated standard. Indeed, the majority
opinion expressly acknowledges that point: “The plaintiffs need not establish every factor, and
they may prove unfairness by showing that a trade practice meets one factor to a great degree or
two or three factors to a lesser degree. See Cheshire Mortgage Service, Inc. v. Montes, 612 A.2d
1130, 1143-44 (Conn. 1992) * * * .” However, in my opinion, Dell’s actions which form the
basis of the DTPA claim at issue in the instant case are so obviously not immoral, unethical,
oppressive, or unscrupulous that I consider that conclusion sufficient to establish that summary
judgment in favor of Dell was appropriate.
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Dell’s actions were “relevant and consequential” because they affected a consumer’s choice with
respect to the product overcomes any such presumption. Ms. Ricci testified that she was
concerned only with the full price of the computer and the service contract which she was
purchasing—and not with the amount of tax being applied to her purchase. Therefore, Dell’s act
of charging an amount in taxes that was minimally excessive did not change Ms. Ricci’s decision
to purchase the computer. See Patriot Alcohol Testers, Inc., 798 F. Supp. at 855. As reflected in
Ms. Ricci’s own admission, she was not concerned with the amount of tax being charged.
Ironically, had Dell charged the appropriate amount of tax, the overall price of Ms. Ricci’s
computer would have been lower, not higher, thus giving her a further incentive to purchase the
computer. Therefore, contrary to the majority, I can perceive absolutely no evidence on which a
reasonable jury could find Dell’s actions to be deceptive.
In conclusion, based on our settled law with respect to summary judgment and the
application of the plain meaning of English words, it is my opinion that the hearing justice acted
appropriately when he determined, in ruling on Dell’s motion for summary judgment, that there
were no genuine issues of material fact and that Dell was entitled to judgment as a matter of law.
See DeMaio, 59 A.3d at 129; see also Leavitt v. Correctional Medical Services, Inc., 645 F.3d
484, 503 (1st Cir. 2011) (stating that “[b]ased on [the previously described] series of events, no
reasonable factfinder could conclude that [an employee of the defendant corporation] acted with
deliberate indifference” and, consequently, affirming a grant of summary judgment in that
employee’s favor); Estate of Frusher v. ABT Associates, Inc., 643 F. Supp. 2d 220, 227 (D.R.I.
2009) (determining that, based on the evidence presented, a reasonable jury could not conclude
that the decedent had an “unsound mind” and, that, therefore, summary judgment was
appropriate); Empire Acquisition Group, LLC v. Atlantic Mortgage Co., 35 A.3d 878, 884 (R.I.
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2012) (stating that “if the sequence of events in the case admits of only one reasonable
[disposition], then the court should intervene and resolve the matter as a question of law”)
(internal quotation marks omitted).
For these reasons, I must respectfully, but very emphatically, dissent.4
4
I raise a final concern, which, while not an actual basis of my dissent, is a point on which
I find it important to opine. The majority opinion states that, for the purposes of summary
judgment, it will treat the class in the instant case as if it had already been certified—which it has
not been. (I explicitly decline to take a position as to the correctness vel non of that very broad
interpretation of what Rule 56 of the Superior Court Rules of Civil Procedure permits.) As a
consequence of that rather ipse dixit “as if” assumption, when the majority considers whether or
not Ms. Ricci suffered a “substantial injury” for the purpose of determining whether Dell’s
actions were “unfair,” it aggregates the damages suffered by the entire class; it states as follows:
“If the only injury to be considered in the light most favorable to
plaintiff was [Ms. Ricci’s injury of] $16.31, we may well agree
with the Superior Court justice. However, because we treat the
class as certified for purposes of drawing reasonable inferences in
favor of the nonmoving party, and viewing evidence in the most
favorable light, we will consider the evidence in the record of
potential injury to the class.”
In my view, the majority’s statement aggregating the damages of the entire class is
completely inconsistent with established law with respect to class actions. One treatise
summarizes as follows the state of American law in this regard:
“Named plaintiffs who represent a class must allege and
show that they personally have been injured, not that injury has
been suffered by other members of the class that they purportedly
represent. If a named plaintiff has not been injured by the wrong
alleged in the complaint, then no case or controversy is presented,
and the plaintiff has no standing to sue either on his or her own
behalf or on behalf of a class. A plaintiff without a claim cannot be
allowed to bring suit by making a class-action allegation. A
representative cannot adequately represent a class when the
representative does not state a valid cause of action.” 59
Am.Jur.2d Parties § 61 at 507 (2012) (footnotes omitted).
It follows (from the just-quoted statement and the cases relied on by defendants, which the
majority disregards—namely, Lewis v. Casey, 518 U.S. 343 (1996); Jackson v. Resolution GGF
Oy, 136 F.3d 1130 (7th Cir. 1998); and Evans v. Taco Bell Corp., CIV. 04CV103JD, 2005 WL
2333841 (D.N.H. Sept. 23, 2005)) that, if a named plaintiff must state a valid claim, including
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alleging an injury, then in a rare case like the one before us (where the amount of injury is a
factor in meeting the requirements to prove the claim alleged), the named plaintiff must also
individually meet those requirements.
I look to the 2003 Advisory Committee’s Notes to Rule 23 of the Federal Rules of Civil
Procedure, which, in addressing factors that could affect the timing of a class certification
decision, stated: “The party opposing the class may prefer to win dismissal or summary
judgment as to the individual plaintiffs without certification and without binding the class that
might have been certified.” See also 3 William B. Rubenstein, Newberg on Class Actions § 7:10
at 50 (2013); cf. 6A Federal Procedure, § 12:284 at 396 (Lawyers Ed. 2004) (stating that the
failure by a district court to address the class action issue on a Fed. R. Civ. P. 12(b)(6) motion to
dismiss “does limit the scope of the court of appeals’ judgment in that, because no class of
plaintiff or defendants is certified, * * * the plaintiffs’ claims must be treated as being brought
solely by the named plaintiffs against the named defendants”). The statement in the Advisory
Committee Notes clearly contemplates that, when a motion for summary judgment is brought
prior to the certification of the class, the motion for summary judgment is, with respect to the
individual claims of the named plaintiffs, not those of the entire class. I further note that, in
arguing to the contrary, the majority opinion cites to only one legal source in the paragraph that it
devotes to the issue of “substantial injury;” that source does not discuss and is not relevant to the
issue of “substantial injury.” In fact, the majority opinion does not cite to any direct source
anywhere in support of its apparent conclusion that, if a class were to be treated as having been
certified for the purposes of summary judgment, the damages could then be aggregated.
Moreover, the majority’s holding muddies the waters with respect to who is bound by a
Superior Court’s grant of summary judgment in a defendant’s favor prior to a ruling on class
certification. See 6A Federal Procedure, § 12:276 at 377 (stating the typical rule that, if a motion
for summary judgment is “granted before a class is certified, the ruling binds only the individual
parties”); see also id. § 12:404 at 561 (“A summary judgment entered in favor of the party
opposing a class will not bind absent class members * * * prior to a class action determination.
However, if a summary judgment is granted to the party opposing the class after the class has
been certified * * * the judgment will have classwide res judicata effect on all those class
members who do not opt out of the class upon being provided with notice.”).
For the foregoing reasons, it is my opinion that, in accordance with the law on class
actions and irrespective of the majority’s having, for the purposes of summary judgment, treated
the class as having been certified, the named plaintiff representing the class must individually
meet the requirements for stating a claim under the DTPA, including (as one factor) whether he
or she sustained a “substantial injury.”
In order to make clear my exact line of reasoning, I reiterate that I explicitly decline to
opine on the propriety of the majority’s decision to treat the plaintiff class as if it had been
certified. For that reason, I need not contend with Chavers v. Fleet Bank (RI), N.A., 844 A.2d
666 (R.I. 2004), which is cited by the majority. The opinion in Chavers is used by the majority
only to support its decision to treat the plaintiff class as having been certified; Chavers does not
support, and indeed could not support, the portion of the majority opinion with which I take
issue; my point, succinctly stated, is that the majority errs in aggregating the damages of the
potential plaintiff class, regardless of whether or not the majority treats the plaintiff class as
having been certified.
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RHODE ISLAND SUPREME COURT CLERK’S OFFICE
Clerk’s Office Order/Opinion Cover Sheet
TITLE OF CASE: Nicholas T. Long et al. v. Dell, Inc., et al.
CASE NO: No. 2012-248-Appeal.
No. 2012-249-Appeal.
(PB 03-2636)
COURT: Supreme Court
DATE OPINION FILED: June 27, 2014
JUSTICES: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
WRITTEN BY: Associate Justice Maureen McKenna Goldberg
SOURCE OF APPEAL: Providence County Superior Court
JUDGE FROM LOWER COURT:
Associate Justice Michael A. Silverstein
ATTORNEYS ON APPEAL:
For Plaintiffs: Joseph Makalusky, Pro Hac Vice
Edward Rapacki, Pro Hac Vice
For Defendants: John Shope, Pro Hac Vice
Bernard J. Lemos, Esq., Intervenor