Consumer protection act applies to lawyer ads, Colorado court roles.

In a case of first impression for the state, the Colorado Supreme Court has held that attorneys are subject to liability for deceptive advertising under the state's consumer protection act, rejecting a law firm's argument that the statute exempts the practice of law.

"The proper test of ... liability under our law is whether or not an attorney's conduct constitutes deceptive trade practice with the requisite intent and meets the elements of public impact and causation," wrote Judge Mary Mullarkey for the court, ruling that the suit alleging deceptive advertising may go forward. (Crowe v. Tull, No. 04SA385, 2006 WL 39248 (Colo. Jan. 9, 2006).)

The plaintiff, Richard Crowe--a former client of the defendant law firm who said he chose it to represent him in a personal injury suit on the basis of its television ads--claimed legal malpractice, violation of the Colorado Consumer Protection Act (CCPA), and breach of fiduciary duty. He alleged that his claim was not settled according to promises made in the advertisements.

Crowe, of Colorado Springs, was injured when a teenager drove a truck into his car. He hired Marc Tull, an attorney at the time with Franklin Azar & Associates, to represent him after seeing TV ads the firm runs in the state. The ads, said Crowe, promised that the firm was skilled at negotiating with insurance companies and would obtain full value for its clients' claims: "as much as we can, as fast as we can."

Crowe said Tull advised him to settle for the amount the teenager's insurance company offered, although Crowe had accrued more than four times that amount in medical bills and lost wages at the time of settlement. In his complaint, Crowe called the firm "a personal injury mill" with a plan to advertise widely, take on more cases than it could try, and settle them prematurely to maintain cash flow without regard to obtaining full value for clients.

Tull and the law firm argued that subjecting attorneys to the consumer protection law duplicates Crowe's legal malpractice claims, that it creates a separation-of-powers conflict with the judicial branch, and that the act does not cover the practice of law.

The court wrote that in an "ever-evolving marketplace," the consumer protection act applies to anyone engaged in a deceptive trade practice in the course of his or her business, vocation, or occupation. Mullarkey noted that the legal profession isn't explicitly excluded from the act and wrote that the court "will not grant lawyers a blanket exemption from liability under the CCPA where the general assembly has not done so."

The claim neither duplicates the legal malpractice claim nor creates a conflict with the judiciary, the court found. Rather, the judicial and legislative branches work together to protect the public interest. "Applied to attorneys, the CCPA complements, rather than contradicts, this court's implementation of the professional rules," Mullarkey wrote.

The court also rejected the defendants' arguments based on the distinction between "entrepreneurial aspects of the practice of law" and "actual practice of law" that other courts have made in excluding attorneys from regulation under consumer protection acts.

"We are convinced by our reading of the CCPA that a judicially forged distinction between the professional and entrepreneurial activities of attorneys, exempting the 'actual practice' of law from CCPA liability, is not the proper vehicle for analyzing a deceptive trade practice claim against a lawyer," wrote Mullarkey.

The defendants argued that the cause of Crowe's alleged financial injury was the legal advice Tull gave Crowe, not the ads. But the court found a significant nexus between the ads and Crowe's injury. "The injury was the result of legal services that Crowe sought out as a consumer based on his reliance on the allegedly false or misleading advertising," Mullarkeywrote. "Reliance on the advertising was the first link in a chain of causation that led to the undervalued settlement." The court found this chain sufficient to allow the case to go forward.

To argue the CCPA violation before the trial court, the supreme court said, Crowe should replead his claim, adding to his "bare-bones original complaint" and alleging "facts sufficient to support the inference that Tull and [the firm] knowingly engaged in a deceptive trade practice which Crowe relied upon."

Trial lawyer groups applauded the court's reasoning.

"Our role is to protect consumers, not to be protected from consumers," said Murray Ogborn, president of the Colorado Trial Lawyers Association, which filed an amicus brief in the case. "The ruling said nothing about the merits of the case, just that lawyers are in no special position with regard to being subject to redress from people who have been harmed. We should be subject to the same rules and statutes as any other person, any business, any profession."