As a preliminary matter, persons must be aware that the UTPA, S.C. Code Ann. § 39-5-10 to -160 (1991), is patterned after section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1). Section 39-5-20 (b) of the UTPA states “It is the intent of the legislature that in construing [the Act’s prohibition against unfair and deceptive trade practices] the courts will be guided by the interpretations given by the Federal Trade Commission and the Federal Courts to § 5 (a) (1) of the Federal Trade Commission Act.” To protect consumers and to prevent anticompetitive behavior in the market, the FTC Act prohibits “unfair methods of competition” and “unfair or deceptive acts or practices.” These prohibitions are intentionally broad; “Congress advisedly left the concept flexible to be defined with particularity by the myriad of cases from the business field.”1
Like the FTC Act, the UTPA prohibits “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce” and addresses both consumer protection and anticompetitive behavior in the marketplace. Unlike the FTC Act, the UTPA provides for a private cause of action.2 Moreover, a party may recover attorney fees and treble damages for a “willful” violation of the UTPA.3
The scope of the UTPA is not strictly tied to the FTC Act.4 South Carolina courts, therefore, “`are . . . free to find [violations of the UTPA through] methods, acts or practices not heretofore specifically declared unlawful by the FTC or the Federal courts.'”5
A. Unfair or Deceptive
Our courts define the terms “unfair” and “deceptive” according to the facts of each case.6 Some practices, such as padding repair bills7 or misrepresenting a used car’s history8 or its condition9 are undeniably unfair. In more questionable cases, however, one must consider whether the trade practice is “offensive to public policy or . . . immoral, unethical, or oppressive.”10
Proving deception under the UTPA is easier than proving deception under common law fraud. Rather than show a claim or representation was intended to deceive, a litigant need only show “that it had the capacity, effect, or tendency to deceive.”11 Moreover, the capacity to deceive can be found without a finding that anyone has actually been deceived.12 In fact, “[e]ven a truthful statement may be deceptive if it has a capacity or tendency to deceive.”13
To date, our courts have not decided whether unfulfilled promises or statements regarding future events, which are not actionable under common law are actionable under the UTPA. Nevertheless, given the broad reach of the UTPA as indicated by Young and State ex rel. McLeod, a party may have a valid cause of action under the UTPA regardless of whether the representation in issue relates to a present or pre-existing fact.
Notwithstanding whether a statement has a capacity for deception, if the statement was made negligently, then it is not actionable under the UTPA. “[I]f the fault is negligence or inattention, is simply not the kind of deceptive practice the [UTPA] was intended to reach.”14
B. Public Impact
In addition to establishing that an act or practice is unfair or deceptive, to be successful, a litigant must show the act or practice has an “impact upon the public interest.”15 In other words, “[t]he act is not available to redress a private wrong where the public interest is unaffected.”16
The rationale behind the public impact requirement is two-fold. First, because the UTPA is a derivation of the FTC Act, our courts are mindful that a proceeding by the FTC under the FTC Act must be predicated upon the FTC’s determination that the action would be in the interest of the public.17
Second, the UTPA is limited to unfair or deceptive acts or practices “in the conduct of any trade or commerce.”18 Trade or commerce is defined to include “any trade or commerce directly or indirectly affecting the people of this State.”19 Construing the legislature’s intent, therefore, South Carolina courts have determined the UTPA is enforceable only where there is an effect on the public’s interest.
Proving “public impact” is more difficult than proving deception or unfairness. On the one hand, as previously indicated, our courts have articulated broad standards by which a litigant may establish unfairness or deception. On the other hand, “South Carolina courts . . . consistently reject[ ] speculative claims of adverse public impact and require[ ] evidentiary proof of such effects.”20 One way a litigant may establish an “impact on the public interest” is by showing the unfair or deceptive acts or practices have a “potential for repetition.”21 There is no requirement, however, that the defendant still be engaged in the unlawful practice in order to bring suit.22
In an action between businesses, the potential for repetition must be shown to affect consumers and not just other businesses who are not parties to the suit.23 Further, a showing of public “impact” is necessary whether the claim is either for unfair or deceptive acts or for unfair competition.24 In dictum, the South Carolina Supreme Court recognized public impact may be inherent in unfair methods of competition.25 For example, the Fourth Circuit Court of Appeals stated that “a finding of conspiracy to restrain competition is tantamount to a finding that the underlying conduct has “an impact upon the public interest.”26 Such impact was not inherent, however, where a former company officer formed a competing company and utilized privileged customer information.27
Certain activities do not inherently have an impact on the public interest. For example, a “mere” breach of contract does not violate the UTPA28 because the breach does affect the rights or interests of anyone other than the parties to the contract.29 Case law, however, does not clarify whether “mere” breach of contract means breach without public impact, breach without fraudulent conduct, or breach not affecting trade or commerce.
C. Trade or Commerce
In order for unfair methods of competition and unfair and deceptive acts to be actionable under the UTPA, they must occur “in the conduct of any trade or commerce.”30 Under the UTPA, trade and commerce “shall include the advertising, offering for sale, sale or distribution of any service and any property, tangible or intangible, real, personal, or mixed, and any other article, commodity or thing of value wherever situate, and shall include any trade or commerce directly or indirectly affecting the people of this state.”31 These examples are illustrative and not exhaustive.32 Additionally, the words “trade” and “commerce” are synonymous.33 Thus, trade is defined as both the business of buying and selling.34
Despite the broad scope of the UTPA’s definition of trade or commerce, a party’s noncommercial acts are not within the UTPA’s scope even though they may effect another’s trade or commerce.35 For example, in Sunshine Sportswear & Electronics, Inc. v. WSOC Television, Inc.,36 the plaintiff claimed defendant’s reporting of plaintiff’s alleged deceptive advertising damaged the plaintiff’s reputation and business interests and thus violated the UTPA. The court held the defendant’s statements fell outside the scope of the UTPA because the defendant did not make the statements in the conduct of trade or commerce.37 Logically, although the consumer report may have affected trade or commerce by turning potential customers away from the plaintiff, the defendant was not directly engaged in trade or commerce, rather, it was simply reporting the news.
Arguably, however, WSOC may have engaged in trade or commerce. The definition of trade or commerce includes the providing of services.38 By providing services such as the news, WSOC acquires additional viewers. The more viewers the station can attract through its services and programming, the more profitable it becomes for advertisers to buy air time during the programming, and, consequently, the greater the station’s earnings. Under this analysis, WSOC was engaged in trade or commerce. However, in order to subject the station to liability under the UTPA, the court needed to examine issues of free speech and freedom of the press. Thus, the court may have wished to avoid this difficulty, and hence its decision that WSOC’s actions did not fall under the UTPA.
Corporate officers are subject to individual liability under the UTPA. For the UTPA’s purposes, a “person” is defined to include “natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations and any other legal entity.”39 This definition encompasses controlling persons in a corporation.40 A controlling person is defined as “one who makes formulates and directs corporate policy or who is deeply involved in the important affairs of the corporation.”41 Under this definition, an upper echelon officer, such as the C.E.O. or secretary, is subject to individual liability under the UTPA.42 Furthermore, unlike common law, a principal can be held liable under the Act for the misrepresentations of his agent regardless of whether the principal had actual knowledge.43 Corporate employees, however, typically are not subject to individual liability.44
The UTPA does not apply to “[a]ctions or transactions permitted under laws administered by any regulatory body or officer acting under statutory authority of this State or the United States or actions or transactions permitted by any other South Carolina State law.”45 The statutory exemption is an affirmative defense, thus, the burden is on the party seeking the exemption to show that one exists.46
Initially the South Carolina Supreme Court utilized the “general activity” test to determine whether the conduct in issue was exempted from the Act.47 Under the “general activity” test, the party claiming the exemption must show that the general activity is regulated by a “regulatory body or officer” and, in response, the opposing party has the burden of proving that the acts are not covered by the exemption.48
As noted by some, “[the general activity test] frustrates the purpose of the UTPA as an act of general application and creates inconsistencies, superfluities, and confusion with the remaining UTPA exemptions.”49 For example, though no banking regulation permitted the activities pursued by the defendant, the defendant bank was held to be exempt from liability under the UTPA in connection with deceptive lending practices because the State Board of Financial Institutions regulates the banking industry.50 Additionally, under the “general activity” test, because a seller of mobile homes was regulated by the South Carolina Manufacturing Housing Board, the seller was exempt from the Act although its conduct was in direct violation of a Housing Board regulation.51
The Court of Appeals recognized the dilemma created by the “general activity” test and stated:
“[I]f the scope of the exemption were a question of first impression, we could only conclude unfair and deceptive acts in connection with the sale of mobile homes are not exempt from the Act because they are not “permitted” actions . . . . Our Supreme Court, however, has already given Section 3-5-40 a broader interpretation.”52
In Ward v. Dick Dyer & Assoc., Inc.,53 the South Carolina Supreme Court recognized that the “general activity” test defeated much of the UTPA’s purpose and overturned its use. Holding the exemption only excludes actions or transactions which are allowed or authorized by regulatory agencies or other statutes, the court stated:
“[t]he purpose of the exemption is to insure that a business is not subjected to a lawsuit under the Act when it does something required by law, or does something that would otherwise be a violation of the Act, but is allowed under other statutes or regulations. It is intended to avoid conflict between laws, not to exclude from the Act’s coverage every activity that is authorized or regulated by another statute or agency. Virtually every activity is regulated to some degree.”54
The statutory exemption does not resolve the issue of preemption by other state or federal statutes. The exemption merely deals with situations or entities that are regulated by other statutory or regulatory schemes. The issue of preemption was addressed in Tousley v. North American Van Lines, Inc.,55 where the court applied traditional preemption doctrine principles. The supremacy clause56 negates state laws that impede or are adverse to the laws of Congress. Where Congress has expressly declared the authority under a statute is exclusive, the state law is preempted.57 In the absence of express language, a two-tier inquiry is made to determine: “(1) whether Congress in passing the statute intended to occupy the field [at issue], or (2) whether the state statute is void because it conflicts with federal regulations.”58 If preemption is not found, the court examines the issue of exemption.59 Thus, the issues of preemption and exemption are issues to be analyzed in a bifurcated approach beginning with preemption.
Despite Tousley, the UTPA should not be preempted by other statutory schemes to the extent the Act provides additional protection for the injured party because the UTPA states “[t]he powers and remedies provided by this article shall be cumulative and supplementary to all powers and remedies otherwise provided by law.”60
Under the UTPA, a private party may recover damages for “any ascertainable loss of money or property . . . as a result of . . . an unfair or deceptive method, act or practice.”61 Additionally, a party may recover attorney fees.62 Actual damage is defined as “the difference in value between that with which the plaintiff parted and that which he received.”63 However, where a UTPA action is based on a fraudulent misrepresentation to induce the plaintiff to enter into a contract, if the plaintiff elects to affirm the contract rather than rescind, the measure of actual damages is “the difference between the value the plaintiff would have received if the facts had been as represented and the value he actually received.”64 If a party alternatively pleads and establishes both fraud and a violation of the UTPA, he or she must elect between the remedies provided by each cause of action.65 Finally, a party may not recover damages for claims of both unfair trade practices and unfair competition in the same suit because such awards would constitute double recovery.66
Where “the unfair or deceptive method, act or practice was a willful or knowing violation of [the UTPA], the court shall award three times the actual damages sustained. . . .”67 Under the UTPA, “willful” does not have the same meaning as in common law. At common law, willful is defined as “a determination to exercise one’s own will in spite of and in defiance of the law.”68 Furthermore, “[c]onduct committed with a deliberate intention under such circumstances that a person of ordinary prudence would be conscious of it as an invasion of another’s rights is ‘willful.'”69
In contrast, “willful” under the UTPA is found where a party “should have known” that his or her conduct violates the UTPA.70 “The standard is not one of actual knowledge, but of constructive knowledge. If, in the exercise of due diligence, persons of ordinary prudence engaging in trade or commerce could have ascertained that their conduct violates the Act, then such conduct is ‘willful’ within the meaning of the statute.”71 To determine willfulness, a court considers only the actions at the time of the sale.72 Thus, parties cannot mitigate the determination of treble damages through good deeds subsequent to their wrongful acts. If a party seeks treble damages, he or she cannot collect punitive damages.73
Although § 39-5-140 states “the court” shall award treble damages for willfulness, the section does not specify whether “the court” consists of a determination of willfulness made by the jury or the judge. The reported cases offer limited guidance on this point due to the procedural posture and scope of appellate review. Nevertheless, in State ex rel. Medlock v. Nest Egg Soc’y Today,74 the South Carolina Court of Appeals found that defendant’s conduct was willful within the meaning of the UTPA. This finding, however, may have been prompted by defendant’s argument that their conduct was not willful as a matter of law.75 It is clear, however, that in Haley Nursery Co. v. Forrest,76 the trial judge ruled there was no willful violation of the UTPA.77
II. STATUTORY PROHIBITIONS
The UTPA itself sets forth certain specific practices which are deemed unfair and deceptive. Given the broad definitions of both deception and unfairness under the UTPA, an examination of the statutory scheme of the UTPA and its corresponding judicial interpretations is necessary in order to categorize what conduct constitutes an unfair or deceptive trade act.
A. Pyramid Schemes
Section 39-5-30 states pyramid schemes are unlawful.78 Section 39-5-30 describes a pyramid as:
“[a]ny contract or agreement between and individual and any pyramid club, or other group organized or brought together under any plan or device whereby fees or dues or anything of material value to be paid or given by members thereof are to be paid or given to any other member thereof, which plan or device includes any provision for the increase in such membership through a chain process of new members and thereby advancing themselves in the group to a position where such members in turn receive fees, dues or things of material value from other members.”79
Despite the extensive description set forth in § 39-5-30, courts have indicated the section’s definition of a pyramid is illustrative rather than all-encompassing.
In State ex. rel. McLeod v. V.I.P. Enterprises, Inc.,80 the Attorney General sought an injunction and civil damages against V.I.P. on the grounds its marketing scheme constituted a pyramid scheme in violation of section 39-5-30. V.I.P. sold “Clout” merchandise discount cards for twenty-five dollars and the right to sell the “Clout” card for fifty dollars. A person could not buy a card without additionally purchasing the right to sell cards. Initially, when a person made a sale on behalf of V.I.P., he or she received commissions directly from V.I.P in the amount of ten dollars for the sale of each card and an additional ten dollars for the sale of the right to sell cards. Later, V.I.P. changed the sale compensation to ten dollars for the sale of each card and “advancement points” from the sale of the right to sell cards. After the seller, his buyers, and the buyer’s buyer accrued 300 “advancement points,” the seller received other commissions.
V.I.P. argued its organization was not a pyramid scheme because members received commissions directly from V.I.P. rather than from “other members.”81 The Court of Appeals disagreed: “Where in all other respects a plan meets the UTPA’s description of a pyramid, the use of a corporation as a conduit will not place the plan beyond the reach of the Act.”82 Further, the court held that V.I.P.’s scheme was unlawful under the FTC’s test for pyramids: [Pyramid schemes] are characterized by the payment of money by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to the sale of the product to ultimate users.83
Because members received value for bringing in new members, the court held the marketing scheme provided rewards unrelated to the sale of the “Clout” merchandise cards.84
B. Required Insurance Coverage
Section 39-5-35 states it is unlawful “for any person engaged in the business of lending money to make it a condition of obtaining a loan for the purchase of an automobile that the borrower carry full coverage comprehensive or fifty dollars collision coverage.”85 Ostensibly, the specific language of the prohibition does not lead to confusion and unwitting transgression and, thus, there are no cases under this section.
C. Related Statutes
A violation of the Business Opportunity Sales Act (BOA)86 results in a violation of the UTPA.87 Under the BOA, a seller of a “business opportunity”88 must provide to the potential purchaser a written disclosure document89 at least forty-eight hours before the purchase is made.90 Further, the disclosure statement must be filed with the Secretary of State.91 The rationale for such disclosure, similar to securities law, is the purchaser is making a decision regarding an investment risk. Thus, fairness and market efficiency dictate that the purchaser must have complete and accurate information in order to make a wise investment decision.92
Similar to section 2(a) of the Clayton Act (the Robinson-Patman Act),93 the South Carolina Merchandising Unfair Trade Practices Act (MUTPA)94 prohibits price discrimination between competitors. Generally, the Robinson-Patman Act states it is unlawful “for any person engaged in commerce . . . to discriminate in price between different purchasers of commodities of like grade and quality . . . where the effect of such discrimination may be substantially to lessen competition . . . or to injure, destroy, or prevent competition.”95 Unlike the Robinson-Patman Act, however, the MUTPA declares certain price setting illegal regardless of whether the effect of such pricing substantially lessens competition. Under the MUTPA, it is an unfair trade practice for any person who is in both the wholesale and retail business to retail merchandise of like grade and quality at a price as low or lower as such person sells the same merchandise at wholesale in the same town or locality.96
Although the MUTPA declares price discrimination “an unfair trade practice,” it does not contain a provision, like section 39-57-80(e) of the Business Opportunity Sales Act stating a violation of the MUTPA results in a violation of the UTPA. Further, there are no reported cases which address this issue.97 Given that the UTPA is patterned after and interpreted by decisions regarding the FTC Act,98 and that a violation of section 2(a) of the Clayton Act necessarily results in a per se violation of the FTC Act,99 price discrimination should be actionable under the UTPA.
III. ANTITRUST VIOLATIONS
Despite the unanswered issue of price discrimination, a violation of the federal antitrust laws is a violation of the UTPA.100 As previously indicated, the purpose of the FTC Act, after which the UTPA was patterned, is to bolster the Sherman and Clayton Acts.101 The Sherman Act states that “[e]very person who shall monopolize or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize . . . shall be deemed guilty of a felony . . . .”102 Thus, attempts to monopolize a market violate the UTPA103 in addition to section 2 of the Sherman Act.
A. Attempts To Monopolize
In Bobcook Outdoor Media, Inc. v. Summey Outdoor Advertising, Inc.,104 Bobcook alleged Summey attempted to monopolize the market for outdoor advertising in Anderson County. At trial, Bobcook offered evidence that: (1) Summey entered into an agreement with a third outdoor advertiser to neither compete in Anderson County nor to hire each other’s employees, (2) Summey paid its employees a three-hundred dollar bonus for each Bobcook billboard face that was removed due to Summey securing a lease from the corresponding property owner, and (3) Summey made several attempts to buy Bobcook. The jury found Summey had violated the UTPA and the Court of Appeals affirmed. Although the court was unable to review the trial judge’s jury charge on the law of unfair competition, the court held “the issue of alleged unfair competition was a matter for the jury to decide based upon its assessment of the testimony.”105
B. Vertical Restrictions
Vertical restrictions are limitations placed on the buyer by the seller.106 Some vertical restrictions violate the antitrust laws and subsequently violate the UTPA. One example is resale price maintenance.
1. Resale Price Maintenance — Resale price maintenance occurs when a manufacturer sets price for the product’s resale and attempts to enforce that price by refusing to sell to transgressors or by terminating their distributorship. It is a per se violation of section 1 of the Sherman Act107 for a seller to contractually set either a minimum108 or maximum price109 at which the buyer can resell the product.
Resale price maintenance cases often involve allegations that a manufacturer terminated a distributor pursuant to an agreement with other distributors. Until Business Electronics Corp. v. Sharp Electronics Corp.,110 vertical non-price restraints were analyzed under the rule of reason (whether there is an anticompetitive effect on the market) whereas vertical price restraints were per se illegal. Although terminating a dealer is a non-price restraint, terminating a “price cutting” dealer was per se illegal because it was in response to and affected price.111
The Court in Sharp found manufacturers frequently are motivated to terminate a “price cutting” dealer to encourage other dealers to provide services for the manufacturer’s products, thus promoting sales and goodwill for the manufacturer.112 This is so because “price cutters” often reduce their prices by sparing the expenses of providing services for the manufacturer’s products and “free riding” on the services and support provided by dealers of the same product. Thus, “free riding” by one dealer becomes a disincentive for other dealers to provide services.113
Ultimately, non-price restraints that prevent “free riding” do not have an anticompetitive effect on the market, rather, they stimulate intra-brand competition.114 Given the pro-competitive effects non-price restraints may have, the Court in Sharp modified the long-standing per se rule and stated that “a vertical restraint is not illegal per se unless it includes some agreement on price or price levels.”115 In the absence of an agreement on price, therefore, the manufacturer’s decision to terminate a dealer will be judged by the “rule of reason” — whether the act has an anticompetitive effect on the defined product market.
To sustain an action for termination, the dealer must prove there was a “contract, combination, or conspiracy” between the manufacturer and other dealers to terminate the party.116 Proof of this combination requires “evidence that tends to exclude the possibility that the manufacturer and non-terminated distributors were acting independently.”117 Manufacturers are free to deal, or refuse to deal, with whomever they chose provided the decision is made independently.118 Thus, evidence of complaints from dealers to the manufacturer regarding the “price cutting” dealer alone is not sufficient to establish a combination.119
In Bostick Oil Co., Inc. v. Michelin Tire Corp., Commercial Div.,120 Bostick alleged that it had been terminated as a dealer of Michelin tires pursuant to complaints from other dealers regarding Bostick’s pricing practices and in the alternative that Bostick was terminated to enforce a resale price maintenance scheme (the National Accounts program). Bostick consistently “price cut” other local Michelin dealers. Bostick supplied tires by “drop-shipping”; Bostick delivered the tires without mounting them or providing any other initial service. Due to Bostick’s “free riding,” other dealers found themselves providing services for Bostick’s customers. Although one dealer testified that customers paid for future service on the tire and that he made substantial profits from the service portion of his dealership, Michelin received complaints from various other dealers regarding Bostick’s price cutting.
Before the renewal date of Bostick’s dealership contract, Michelin encouraged Bostick to enroll in its National Accounts program. Under the National Accounts program, large volume purchasers were billed directly by Michelin while dealers continued to sell and service tires. Also, prices were quoted directly by Michelin. Dealers were not required to enroll in the National Accounts program to maintain their dealerships; they could chose to sell to accounts as they had done in the past or enroll some of them in the program in any combination.
Although Bostick prospered in the National Accounts program, it continued to cut prices by offering program members rebates. Subsequently, Bostick’s dealership was terminated.
The court in Bostick held the plaintiff had stated a cause of action under the UTPA and that “evidence sufficient to withstand a motion for directed verdict on the federal causes of action provides at least as sufficient a basis for also requiring jury determination of the [UTPA] claim.”121 The UTPA does not require a showing of a contract, combination, or conspiracy.122 Moreover, the UTPA is not limited to practices which are unlawful under section 5 of the FTC Act.123 Thus, the burden of proving a UTPA violation is easier than proving an antitrust violation.
2. Consignment Arrangements — A consignment arrangement can be a form of retail price maintenance if it is coercively used to fix prices. As previously noted, vertical price fixing is illegal per se under the Sherman Act. If the arrangement is a true consignment rather than a disguised sale of goods, it is not a price fixing agreement and, thus, despite the broad scope of the UTPA,126 if the consignment arrangement does not violate the federal antitrust laws, the consignment can not be held violate the UTPA.127
3. Exclusive Dealing Arrangements — Another form of vertical restraint is an exclusive dealing arrangement. An exclusive dealing arrangement occurs when a manufacturer requires a dealer to deal exclusively in the products of the manufacturer. Exclusive dealing arrangements are not illegal per se.128 Rather, the Supreme Court has set forth two tests for illegality. The first is the “quantitative substantiality” test — if the manufacturer’s exclusive dealing contracts cover a substantial dollar amount of the market, an anticompetitive effect is presumed.129 The second is the “market share” test — exclusive dealing arrangements violate federal antitrust laws only if performance of the contract will foreclose competing product entries in a substantial share of the market.130
Analyzing an exclusive dealing arrangement under the UTPA, the Fourth Circuit applied the “market share” test:
“[T]he appropriate analysis to apply to an exclusive dealing arrangement under the FTC Act, and therefore under the South Carolina act was well, is as follows. First, the court must determine the nature of the relevant market by identifying the particular type of goods and the geographical area involved. Second, the court must determine how much of that market has been closed off to the products of competing manufacturers because of the exclusive dealing arrangements required by the defendant. In conjunction with this, the court should look at all relevant evidence indicating whether or not competitors have found or are likely to find it difficult to enter or remain in the market. Third, the court should consider any pro-competitive effects of the exclusive dealing arrangements that would justify their use.”131
Presumably, although South Carolina state courts are not constrained to follow the market share approach,132 if a party can show that the manufacturer’s exclusive dealing arrangement foreclosed a substantial share of the product market, the party can sustain a cause of action under the UTPA.
IV. OTHER VIOLATIONS
In addition to the statutory prohibitions set out in the UTPA and federal antitrust laws, infractions of other laws, both statutory and common, may result in a violation of the UTPA.
A. Trademark / Copyright
Subject to the requirement of public impact,133 a violation of Federal trademark or copyright law may subsequently result in a violation of the UTPA.134 Significantly, although pecuniary damages may be unavailable under federal trademark or copyright law, they are available under the UTPA135 if such damage is an ascertainable loss within the meaning of the UTPA.136
As previously noted, mere negligence is not a deceptive act under the UTPA.137 Moreover, wrongful discharge in an employer-employee relationship does not violate the UTPA because there is no public impact arising out of a private contractual relationship.138 Various “economic” torts, however, may result in a violation of the UTPA. For example, the UTPA may be violated by either wrongful termination, intentional interference with contractual relations, or fraudulent misrepresentation.139
Wrongful termination involves a relationship between distributors and suppliers. Under South Carolina law, “a dealer terminated in accordance with the terms of the contract has . . . a cause of action only when the supplier act[s] arbitrarily or in bad faith.”140 In other words, in order to sustain an action for wrongful termination, the dealer must show that the supplier acted “maliciously and without reasonable business justification for ending the relationship with the distributor.”141 Although the issue of whether such conduct violates the UTPA is undecided, it is clear that in order to claim a UTPA violation concurrent with a wrongful termination claim, the plaintiff must show public impact.142
In addition to wrongful termination, intentional interference with contractual relations will support a UTPA claim. The elements of a claim for intentional interference with contractual relations are “(1) the existence of the contract; (2) the wrongdoer’s knowledge of the contract; (3) the intentional procurement of its breach; (4) the absence of jurisdiction; and (5) resulting damages.”143 If the conduct in issue amounts to an intentional interference, and meets the UTPA requirements of trade or commerce and public impact, a cause of action under the UTPA exists.144
Although the UTPA does not require proof of common law fraud, negligent misrepresentation is not actionable. Any potential floodgate of consumer actions for merchant misrepresentation has been limited by the public impact requirement for private actions. Despite the fact that the UTPA’s scope is not strictly tied to the FTC Act and that South Carolina courts are free to find methods, acts or practices not previously declared unlawful by the FTC or the Federal courts, the courts have not strayed wildly from FTC Act interpretations. For\ example, in the case of consignment contracts, the courts have declined to find a UTPA violation where the consignment does not violate the federal antitrust laws. The general activity test for statutory exemption under the UTPA has been replaced by the “authorization” test and thus, the exemption only exists where the actions or transactions are allowed or authorized by regulatory agency or statute.