CHAPTER 470

FORMERLY

HOUSE BILL NO. 258

AN ACT TO AMEND TITLE 6 OF THE DELAWARE CODE RELATING TO PROHIBITED TRADE PRACTICES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 25, Title 6 of the Delaware Code by adding a new subchapter to read as follows:

"Subchapter XI. Cumulative Remedies and Enhanced Penalties.

§ 2598. Violation of order or injunction; penalty.

(a) A person who violates any order or injunction issued pursuant to this chapter or who breaches an agreement forming the basis of a cease and desist order issued pursuant to this chapter shall forfeit and pay to the State a civil penalty of not more than $25,000 per violation.

(b) The Attorney General may petition the Superior Court in the county in which an order, injunction or cease and desist order was issued, in order to obtain recovery of a civil penalty as provided pursuant to this section. Such petition may be made whenever it appears to the Attorney General that a person subject to any order, injunction or cease and desist order issued pursuant to any provision of this chapter has violated such order or injunction or breached a material term of an agreement forming the basis for such cease and desist order.

(c) Nothing in this section shall prevent the Attorney General from initiating any additional or alternative action under his or her lawful powers which otherwise seeks enforcement of any statute or requests sanctions for any such violation of an order, injunction or cease and desist order."

Section 2. Amend § 2521, Title 6 of the Delaware Code by deleting said section and substituting in lieu thereof the following:

"§ 2521. Cease and desist agreements.

(a) At any time after it appears to the Attorney General that a person has engaged in, is engaging in, or is about to engage in any practice declared by this chapter to be unlawful, the Attorney General may issue a cease and desist order pursuant to an agreement with the person who is alleged to have engaged in, is engaged in, or is about to engage in an activity declared by, this chapter to be unlawful. Each such agreement may provide for:

(1) the immediate discontinuance of each practice set forth in the agreement;

(2) any such relief, remedies, penalties, fines or recoveries authorized by § 2517 of Title 29, §§ 2522-26 of this Title, and/or §2533 of this Title; and

(3) any other action deemed by the Attorney General to be necessary to remedy such practice or practices.

(b) No legal action or proceeding shall be instituted or maintained by the Attorney General against any person who is the subject of an order issued pursuant to this section with respect to the specific activities covered by the order unless the agreement forming the basis of the order shall have been breached or violated by such person."

Section 3. Amend § 2522, Title 6 of the Delaware Code by deleting said section and substituting in lieu thereof the following:

"§ 2522. Proceedings brought by the Attorney General.

(a) Whenever it appears to the Attorney General that a person has engaged in, is engaging in, or is about to engage in any practice declared by this subchapter to be unlawful, he or she may institute an action in accordance with the provisions of § 2517(c)(2) of Title 29 in order to enjoin such practices or any acts being done in furtherance thereof. The complaint shall state the nature of the conduct constituting a violation of this subchapter and the relief sought thereunder. Such action shall be brought in a court of competent jurisdiction in the county in which the alleged unlawful practice has been, is, or is about to be performed.

(b) Ha court of competent jurisdiction finds that any person has willfully violated this subchapter, upon petition to the court by the Attorney General in the original complaint or made at any time following the court's finding of a willful violation, the person shall forfeit and pay to the State a civil penalty of not more than $10,000 for each violation. For purposes of this subchapter, a willful violation occurs when the person committing the violation knew or should have known that his or her conduct was of the nature prohibited by this subchapter".

Section 4. Amend § 2519(3), Title 6 of the Delaware Code by deleting the phrase "the Rules of the Court of Chancery" as it appears in said paragraph and substituting in lieu thereof the phrase "the procedural rules of the court authorizing the issuance of the demand".

Section 5. Amend § 2520, Title 6 of the Delaware Code by deleting said section and substituting in lieu thereof the following:

§ 2520. Failure to respond; order; penalties.

If any person fails to respond to any investigative demand issued by the Attorney General under § 2514 of this Title, the Attorney General may, after due notice, apply to the court which authorized the issuance of the demand for an order, and the court, after a hearing on said application, may enter an order:

(1) requiring said person to respond to the demand;

(2) granting injunctive relief restraining any practice or act declared by this chapter to be unlawful;

(0) vacating, annulling or suspending the corporate charter of a corporation created by or under the laws of this State or revoking or suspending the certificate of authority to do business in this State of a foreign corporation, or revoking or suspending any other licenses, permits or certificates issued pursuant to law to such person which are used to further the allegedly unlawful practice;

(1) adjudging such person in contempt of court; and

(2) granting such other relief or imposing any other penalty or fine as may be determined by the court in its discretion to be appropriate to obtain compliance with the Attorney General's investigative demand."

Section 6. Amend § 2518, Title 6 of the Delaware Code by deleting the phrase "Pursuant to an order of the Court of Chancery" and substituting in lieu thereof the phrase "Pursuant to an order of the Superior Court or the Court of Chancery".

Section 7. Amend § 2514, Title 6 of the Delaware Code by deleting the word "subchapter" as it appears in said section and substituting in lieu thereof the word "chapter".

Section 8. Amend § 2514(1), Title 6 of the Delaware Code by deleting the phrase "sale or advertisement" as it appears in said paragraph and substituting in lieu thereof the phrase "sale, lease or advertisement".

Section 9. Amend § 2514(2), Title 6 of the Delaware Code by deleting said paragraph and substituting in lieu thereof the following:

"(2) Answer oral interrogatories under oath at such places and times as the Attorney General may reasonably specify as to all facts and circumstances concerning the sale, lease or advertisement of merchandise by such person; and".

Section 10. Amend § 2514(3), Title 6 of the Delaware Code by adding the phrase "for examination" between the word "produce" and the word "the" and by deleting the phrase "or paper" and substituting the phrase ", paper or computer record" in said paragraph.

Section 11. Amend § 2511, Title 6 of the Delaware Code by deleting paragraph (4) and substituting in lieu thereof the following:

"(4) 'Sale' means any sale, offer for sale, or attempt to sell any merchandise for any consideration.

(5) 'Lease' means any lease, offer to lease, or attempt to lease any merchandise for any consideration.

(6) 'Examination' means inspection, study or copying."

Section 12. Amend § 2513(a), Title 6 of the Delaware Code by deleting the phrase "sale or advertisement" as it appears in said subsection and substituting in lieu thereof the phrase "sale, lease or advertisement".

Section 13. Amend § 2513(c), Title 6 of the Delaware Code by deleting said subsection in its entirety.

Section 14. Amend § 2517, Title 6 of the Delaware Code by deleting said section in its entirety and substituting in lieu thereof the following:

"§ 2517. Same--Issuance of protective order.

(a) On motion promptly made by a person who receives such a demand from the Attorney General, the judge who authorized the issuance of the investigative demand, if available, and if not, another member of his or her court, upon notice and good cause shown, may make any order which he or she deems appropriate and just to protect the person from an improper demand from the Attorney General.

(b) If the Attorney General determines that it would not be in the best interests of the investigation to disclose the evidence on which he or she relied to establish his or her belief that unlawful conduct has occurred, is occurring, or is about to occur, the Attorney General may request, and the court may examine, in camera, the evidence upon which the Attorney General relied in order to rule on such a motion."

Section 15. Amend Chapter 25, Title 6 of the Delaware Code to add a new section 2506 to read as follows:

"§ 2506. Limitation of Actions.

Notwithstanding any other statute to the contrary, no action at law by the Attorney General brought under this chapter shall be initiated after the expiration of 5 years from the time the cause of action accrued; however, the provisions of Sections 8117 and 8118 of Title 10 and any applicable tolling or savings provisions created under the common law shall apply."

Section 16. Amend § 2533(d), Title 6 of the Delaware Code by deleting said subsection in its entirety and substituting in lieu thereof the following:

"(d) The Attorney General shall have standing to seek, on behalf of the State, any remedy enumerated in this section for any violation of § 2532 that is likely to harm any person, including but not limited to individual retail purchasers and consumers of goods, services or merchandise.

(e) If a court of competent jurisdiction finds that any person has willfully violated this subchapter, upon petition to the court by the Attorney General in the original complaint or at any time following the court's finding of a willful violation, the person shall forfeit and pay to the State a civil penalty of not more than $10,000 for each violation. For purposes of this subchapter, a willful violation occurs when the person committing the violation knew or should have known that the conduct was of the nature prohibited by this subchapter."

Approved July 17, 1998