Commonwealth v. Monumental Properties, Inc.

POMEROY, Justice

(dissenting).

The opinion of the Court, while conceding that the words of the Unfair Trade Practices and Consumer Protection Law are “not . . . free of all ambiguity,” (opinion of the Court at 820) (a conclusion I do not share) nevertheless concludes that the leasing of residential real estate is covered by the Law, and that in so holding “this Court faithfully gives effect to the legislative mandate” (opinion of the Court at 826). Believing that this result is reachable only by a forced and strained *488 reading of the statute, I must respectfully dissent. The highly laudable objective of consumer protection, including the modernization of the typical archaic forms of printed leases in widespread use, should not, in the name of a “pragmatic approach” and “a functional stance,” serve to change the normal rules of statutory construction.

The Law starts with a section of definitions. “Trade” and “Commerce” are defined in terms of “sale”, viz., “the advertising, offering for sale, sale or distribution of any services and any property, tangible or intangible, real, personal or mixed . . . .” It then defines the phrases “unfair methods of competition” and “unfair or deceptive acts or practices” (which are used synonymously) as meaning any one or more of ten enumerated practices relating to “goods or services.” 1 The eleventh *489 unfair practice has to do with making false or misleading statements as to price reductions and the twelfth with promising any compensation “for the procurement of a contract of purchase.” The thirteenth and last unfair trade practice is a catch-all, viz., “[e]ngaging in any other fraudulent conduct which creates a likelihood of confusion or of misunderstanding.” Having thus defined its terms, the legislature in the next section (Section 3) of the Law declares these unfair trade practices in the conduct of any trade or commerce to be unlawful. Section 7 provides for the avoidance by a consumer under certain conditions of a contract of sale or sale where the “merchandise” involved has a sales price of $25.00 or more.

It seems obvious that the leasing of real estate is not embraced within the definitional provisions, which are solely directed to the sale and distribution of “goods or services.” Indeed, the plain design and purpose of the Law is the protection of persons involved in the purchase of consumer goods. The Commonwealth in its brief (p. 22) points to the catch-all clause (xiii) of the definitional section, supra, n. 1, which provides that “engaging in any other fraudulent conduct which creates a likelihood of confusion or misunderstanding” is an unfair trade practice, and the Court embraces this approach. Clearly, however, this clause must be read, under the familiar rule of ejusdem generis, as having reference to the same general subject matter as the specific clauses which precede it. Statutory Construction Act of 1972, 1 Pa. S. § 1903(b) (Spec.Pamphlet, 1973). Butler Fair & Agricultural Association v. Butler School District, 389 Pa. 169, 177, 178 , 132 A.2d 214 (1957). When our task is to de *490 termine the scope which the legislature intended a statute to have, it is circular in the extreme to pass off the ejusdem, generis rule by stating that it “ ‘does not warrant a court in confining the operation of a statute within narrower limits than intended by the Legislature.’ ” (opinion of the Court at 827 quoting from Commonwealth v. Klucher, 326 Pa. 587 , 193 A.2d 28 (1937).) It may be granted, as the Court suggests, that “purchasers of rental housing” (opinion of the Court at 822) are consumers, but to say as much does not convert a lease into a sale, and I cannot agree that adherence to the normal meaning of words in interpreting a statute is to be “bound by common law formalisms” (ibid.) The Statutory Construction Act of 1972, supra, commands that “[w]ords and phrases shall be construed ... according to their common and approved usage;” 1 Pa. S. § 1903(a). Indeed, we recently so held in interpreting the word “sale” as it is used in The Drug, Device and Cosmetic Act, 2 Commonwealth v. Simione, 447 Pa. 473 , 291 A.2d 764 (1972). Speaking through Mr. Justice Roberts, we held that “[t]his Court is obligated to construe words employed in the laws of this Commonwealth ‘according to their common and approved usage,’ ” and standard dictionary definitions of “sale” were employed to determine whether the conduct there involved fell within them. 447 Pa. at 480 , 291 A.2d at 768 .

Guidance for determining the reach of the Unfair Practices and Consumer Protection Law is to be found in the decision of the Supreme Court of the United States in McBoyle v. United States, 283 U.S. 25 , 51 S.Ct. 340 , 75 L.Ed. 816 (1931). The appellant had been convicted of transporting an airplane across state lines, knowing it to have been stolen. The question was whether this act was a violation of the National Motor Vehicle Theft Act. That Act defined the term “motor vehicle” to include “an automobile, automobile truck, automobile wagon, motor *491 cycle, or any other self-propelled vehicle [not designed for running] on rails." In holding that an airplane was not included within the catch-all phrase, Mr. Justice Holmes, in his opinion for the Court, said: “[T]he phrase under discussion calls up the popular picture. For after including automobile truck, automobile wagon and motorcycle, the words ‘any other self-propelled vehicle not designed for running on rails’ still indicate that a vehicle in the popular sense, that is a vehicle running on land, is the theme. It is a vehicle that runs, not something, not commonly called a vehicle, that flies. . It is impossible to read words that so carefully enumerate the different forms of motor vehicles and have no reference of any kind to aircraft, as including airplanes under a term that usage more and more precisely confines to a different class. . . . When a rule of conduct is laid down in words that evoke in the common mind only the picture of vehicles moving on land, the statute should not be extended to aircraft simply because it may seem to us that a similar policy applies, or upon the speculation that if the legislature had thought of it, very likely broader words would have been used.” 283 U.S. at 26, 27 , 51 S.Ct. at 341 . While the statute involved in McBoyle was a penal one, the applicability of Mr. Justice Holmes’ analysis to the case at bar is clear, and to my mind, compelling. The complaint of the Commonwealth is basically directed against certain provisions in the customary printed forms of lease agreements which it labels as fraudulent, illegal, unconscionable and unconstitutional. 3 It also charges that the leases fail to *492 inform the tenants of their rights under The Landlord and Tenant Act of 1951, Act of April 6, 1951, P.L. 69, as amended; 68 P.S. § 250.101 et seq. This statute, which has been several times amended since its enactment, is, as its title states, “An Act relating to the rights, obligations and liabilities of landlord and tenant and of parties dealing with them and amending, revising, changing and consolidating the law relating thereto.” It is a comprehensive statute dealing with the creation of leases, the recovery of rent by assumpsit and distress, exemptions from distress and sale, and recovery of possession. It may well be that in light of modern conditions and the emphasis that is now being placed, and properly, on the rights of consumers, further protective provisions should be enacted for the benefit of tenants. Had the legislature intended to accomplish such a purpose in 1968 when it adopted the Unfair Trade Practices and Consumer Protection Law, it seems evident to me that it would have done so, if not by explicit amendments to The Landlord and Tenant Act, 4 then at least by a method less oblique and obtuse than the majority attributes to it in finding the “legislative mandate” contained in the Unfair Trade Practices and Consumer Protection Law.

*493 Finally, I am unpersuaded that the Federal Trade Commission Act is of any help to the appellant in its construction of the Pennsylvania statute. F. T. C. v. Sperry & Hutchinson Co., 405 U.S. 233 , 92 S.Ct. 898 , 31 L.Ed.2d 170 (1972), relied upon by the majority, was concerned with trading stamps, not leases. It held that the Federal Trade Commission was not limited by Section 5 of the Act to defining and proscribing as unfair or deceptive practices, those which violated the letter or the spirit of the anti-trust laws, and that practices could be proscribed as unfair or deceptive in their effect on consumers as regardless of their nature or quality as competitive practices or their effect on competition. It is to be noted, moreover, that under that Act the Congress deliberately left it to the F.T.C. to define unfair practices, 5 whereas in the case at bar the legislature itself has made the definitions. The cases cited by the majority wherein the Federal Trade Commission has sought to enjoin practices pertaining to the leasing of personal property are not here pertinent. Furthermore, as the amicus brief of the Trade Commission in our Court acknowledges, “in none of the cases was the fact that the transaction involved a lease even raised as a defense to F.T.C. regulation.” (Brief of Federal Trade Commission, p. 11).

Since I disagree with the Court in its holdings as set forth in parts I and II of its opinion, that the Law by its terms includes the subject matter of the present litigation, I do not reach the further matters considered in parts III, IV and V of its opinion. I would affirm the order of the Commonwealth Court dismissing the complaint.

JONES, C. J., joins in this dissent.

. (4) “Unfair methods of competition” and “unfair or deceptive acts or practices” mean any one or more of the following:

(i) Passing off goods or services as those of another;

(ii) Causing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval or certification of goods or services;

(iii) Causing likelihood of confusion or of misunderstanding as to affiliation, connection or association with, or certification by, another;

(iv) Using deceptive representations or designations of geographic origin in connection with goods or services;

(v) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation or connection that he does not havé;

(vi) Representing that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used or secondhand;

(vii) Representing that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model, if they are of another;

(viii) Disparaging the goods, services or business of another by false or misleading representation of fact;

(ix) Advertising goods or services with intent not to sell them as advertised;

(x) Advertising goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;

(xi) Making false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions;

*489 (xii) Promising or offering to pay, credit or allow to any buyer, any compensation or reward for the procurement of a contract of purchase with others;

(xiii) Engaging in any other fraudulent conduct which creates a likelihood of confusion or of misunderstanding. 1968, Dec. 17, P.L. 1224, No. 387, § 2.

. Act of September 26, 1961, P.L. 1664 § 4(q), 35 P.S. § 780-4(q).

. The provisions in lease agreements alleged to violate the Unfair Trade Practices and Consumer Protection Law are described in the paragraph (9) of the complaint as follows:

“(a) lessor’s ‘right’ to distrain for rent,

(b) lessee’s unconditional warrant of attorney,

(c) lessor’s unconditional ‘right’ to confess judgment,

(d) lessee’s unconditional waiver of unexplained rights, including statutory rights,

(e) lessor’s unlimited discretion to accellerate [sic] lessee’s rent,

*492 (f) lessee’s waiver of claim for lessor’s negligence, for himself and for third parties,

(g) lessor affidavit of default is conclusive evidence of default,

(h) lessee’s waiver to oppose ‘amicable’ action in ejectment,

(i) lessee’s waiver of demand, notice, right to appeal, to a stay and standing to open or strike judgments.”

. The Landlord and Tenant Act has been amended and supplemented several times since its enactment in 1951. In 1968, for example, the same year which saw the enactment of the Unfair Trade Practices and Consumer Protection Law, there was added to the Landlord and Tenant Act a new section 512, dealing with the recovery by tenants of residential leaseholds of escrow funds improperly held by landlords. Act of May 3, 1968, P.L. 107, No. 56, § 1, 68 P.S. § 250.512. (This section was further amended by the Act of December 29, 1972, P.L. 1698, No. 363 § 2, which Act also added other provisions relative to escrow funds as set forth in §§ 511.1, 511.2 and 511.3, 68 P.S. §§ 250.511a, 511b and 511c. Any attempted waiver of these sections by a tenant is declared void and unenforceable. Ibid.)

. Section 5 of the F. T. C. Act simply provided that “Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful.” 15 U. S.C. Sec. 45 (1973).