HB 2478 — Modifying the Fair Trade Practices Act

HB2478 S JUD AMAMT #1 3-2 Schindzielorz    The Committee on the Judiciary moved to amend the bill by striking out everythingthe aftertitle theand enactingsubstituting clausetherefor anda insertingnew intitle, lieuto thereofread theas following:follows:

ARTICLEEng. 11A.

UNFAIRCom. TRADE PRACTICES.

§47-11A-2.Sub.

Whenfor sellingHouse belowBill cost2478—A prohibited;Bill to amend and reenact §47-11A-2, §47-11A-6, and §47-11A-9 of the Code of West Virginia, 1931, as amended, all relating to unfair trade practices;

penalty.generally providing for invoice cost of each separate or distinct product or item of merchandise to retailer in calculation of cost to business of retailer;

Exceptincluding asapplicable otherwisetaxes provided herein in thisinvoice article,cost it shall be unlawful for any person, partnership, firm, corporation, or other entity engaged in businesscalculation as a retailer or wholesaler within this state to sell, offer for sale, or advertise for sale any product or item of merchandise at a price less than the cost thereof with the intent to destroybusiness or the effect of destroyingretailer; competition.

Eachclarifying violationapplication shallof constitute a misdemeanor and,offenses uponunder conviction thereof, any person, partnership, firm, corporation, or other entity violating this section shall be subject to the penaltyact; set forth in §47-11A-11 of this code.

§47-11A-6.eliminating markup in calculation of cost to business of retailer;

Howauthorizing costcourt determined.to award treble damages, court costs, litigation costs, and attorney fees for violation;

(a) The term “cost” when applicable to the business of retailer shall mean bona fide cost and shallmaking mean:technical changes.

(i)  The  invoice  cost  of  theAdopted eachRejected separate or distinct product or item of merchandise to the retailer to include applicable taxes, or the replacement cost thereof to the retailer within 30 days prior to the date of sale, offer for sale, or advertisement for sale, as the case may be, in the quantity last purchased, whichever is lower, from either of which there shall be deducted all trade discounts, except customary discounts for cash;

and (ii) to either of which there shall be added the following items of expense:

(1) Freight freight charges not otherwise included in the cost of the article, product, or item of merchandise, but which freight charges shall not be construed as including cartage to retail outlet if done or paid for by the retailer.

(2) A markup to cover, in part, the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be seven percent of the aggregate of invoice cost or replacement cost (whichever is used), less trade discounts as aforesaid, and plus said freight charges:

Provided, That such a markup to cover the cost of doing business as provided for in this subdivision shall be exclusive of any federal and state motor fuel taxes.

(b) The term “cost” when applicable to the business of a wholesaler shall mean bona fide cost and shall mean:

(i) The invoice cost of the merchandise to the wholesaler to include applicable taxes, or the replacement cost of the merchandise to the wholesaler within 30 days prior to the date of sale, offer for sale, or advertisement for sale, as the case may be, in the quantity last purchased, whichever is lower, from either of which there shall be deducted all trade discounts except customary discounts for cash;

and (ii) to either of which there shall be added the following items of expense:

(1) Freight charges not otherwise included in the cost of the article, product, or item of merchandise, but which freight charges shall not be construed as including cartage to the retail outlet if done or paid for by the wholesaler;

(2) A markup to cover, in part, the cost of doing business, which markup in the absence of proof of a lesser cost, shall be four percent of the aggregate of invoice cost or replacement cost (whichever is used), less trade discounts as aforesaid, and plus said freight charges:

Provided, That such a markup to cover the cost of doing business as provided for in this subdivision shall be exclusive of any federal and state motor fuel taxes.

§47-11A-9.

Injunctions;

damage suits;

and jurisdiction.

(a) Any person, partnership, firm, corporation, or other entity injured by a violation of the provisions of this article §47-11A-2 or §47-11A-3 of this code may maintain an action to enjoin a continuance of any such violation in the circuit court of the county wherein said violation is alleged to have occurred.

If a violation is established in such an action, the court shall enjoin, restrain, or otherwise prohibit such violation.

In such action, if damages are alleged and proven, the plaintiff in the action, in addition to injunctive relief, shall recover from the defendant the actual damages sustained and proven to be a result of the violation, and the court may award the plaintiff treble damages, court costs, litigation costs, and attorneys’ fees.

(b) In the event no injunctive relief is sought or required, any person, partnership, firm, corporation, or other entity injured by a violation of the provisions of this article may maintain an action for damages alone in the circuit court of the county wherein said violation is alleged to have occurred.

If a violation is established in such an action and proven, a plaintiff shall recover from the defendant the actual damages sustained and proven to be a result of the violation, and the court may award the plaintiff treble damages, court costs, litigation costs, and attorneys’ fees.

(c) In any action under subsections (a) and (b) of this section it shall be an absolute defense that the sale price of any product or item of merchandise alleged to be in violation of this article is equal to or greater than the sales price of the same product or item being sold by a competitor of the defendant.

(d) A court may dismiss any action under subsections (a) and (b) of this section upon a motion for summary judgment if the court finds pursuant to Rule 56 of the West Virginia Rules of Civil Procedure that the provisions of subsection (c) of this section have been satisfied.

(e) The circuit courts of this state shall have jurisdiction of actions under this section.

    Adopted Rejected