The Missouri Supreme Court Grants Review of Case involving the Applicability of Consumer Protection Laws to Regulated Entities
September 7, 2017
The Supreme Court granted transfer in Reed v. The Reilly Company, LLC, SC96499, on August 22, 2017. The case is not yet scheduled for argument.
After an insurance company terminated a salesperson who worked on commission, the salesperson sought declaratory judgment, injunctive relief, and damages for fraudulent misrepresentation, concealment, and violations of the Missouri Merchandising Practices Act (“MMPA”). The insurance company moved to dismiss, arguing that a contract required the plaintiff to file his claims in Johnson County, Kansas. The trial court dismissed the suit without prejudice. The trial court also dismissed the plaintiff’s MMPA claim, holding that the defendant was exempt from such claims pursuant to section 407.020.2(2) because it was an entity regulated by the department of insurance.
The Western District affirmed. It agreed that the forum selection clause required the plaintiff to file his case in Johnson County, Kansas. On the MMPA claim, the appeals court also agreed that section 407.020.2(2) exempts entities regulated by the department of insurance from MMPA claims.
In his application for transfer, the plaintiff argued that the trial court and the Western District improperly considered extraneous evidence that was not included in the motion to dismiss or the record on appeal. He also argued that he can bring an MMPA claim against his former employer because section 407.020.2(2) provides that the exemption does not apply if the powers of Chapter 407 are provided to a private citizen by statute, and sections 407.911-.915 create a private cause of action for salespersons who work on commission.
The National Consumer Law Center (NCLC) filed amicus curiae suggestions in support of transfer, arguing that the Western District failed to consider the effect of section 407.020.2(2)’s exception to the regulated entity exemption. The NCLC contended that this reading could also render regulated entities immune from all MMPA consumer claims even if section 407.025 and similar statutes give consumers and other private parties the right to bring suit for MMPA violations.
The plaintiff is represented by Bill Kenney of Bill Kenney Law Firm, LLC (https.billkenneylaw.com). The defendant is represented by Lee Smithyman of Smithyman & Zakoura, Chartered (www.smizak-law.com). The NCLC is represented by Douglass Noland of Noland Law Firm, LLC (www.nolandlawfirm.com).