Is It Time to Extinguish CUTPA's "Cigarette Rule"
The Connecticut Unfair Trade Practices Act ("CUTPA"), like the Federal Trade Commission Act, prohibits "unfair acts and practices." Hoping to draw from the federal government's experience, the Connecticut General Assembly requires courts to use federal interpretations of the FTC Act as a guide for interpretations of CUTPA.1
In many ways, Connecticut courts have followed this mandate, allowing CUTPA to grow and evolve alongside federal law in areas such as deception and securities law. However, this growth has been stunted in one area—the test for measuring "unfairness." Rather than progressing with federal law, Connecticut courts continue to analyze "unfairness" under an antiquated methodology that the FTC developed in 1964, but abandoned in 1980. Known as the "Cigarette Rule," the FTC's old test allows courts and juries to find unfairness using amorphous concepts such as "immorality" or by gazing into "penumbras" of rules and regulations. The FTC abandoned the rule over 35 years ago, in recognition of the fact that the Cigarette Rule simply did not permit consistent enforcement of such nebulous concepts. This instability, needless to say, made it exceedingly difficult for businesses to conform their behavior to the agency's changing interpretations.
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1. Conn. Gen. Stat. § 42-110b(b)