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50-632. Remedies of the attorney general or any county or district attorney; procedure for sequestration. (a) The attorney general or any county or district attorney may bring an action:

(1) To obtain a declaratory judgment that an act or practice violates this act;

(2) to enjoin, or to obtain a restraining order against a supplier who has violated, is violating, or is otherwise likely to violate this act; or

(3) to recover damages on behalf of consumers by reason of violations of this act; and

(4) to recover reasonable expenses and investigation fees.

(b) In lieu of instigating or continuing an action or proceeding, the attorney general may accept a consent judgment with respect to any act or practice declared to be a violation of this act. Such a consent judgment shall provide for the discontinuance by the supplier entering the same of any act or practice declared to be a violation of this act, and it may include a stipulation for the payment by such supplier of reasonable expenses and investigation fees incurred by the attorney general. The consent judgment also may include a stipulation for restitution to be made by such supplier to consumers of money, property or other things received from such consumers in connection with a violation of this act and also may include a stipulation for specific performance. Any consent judgment entered into pursuant to this section shall not be deemed to admit the violation, unless it does so by its terms. Before any consent judgment entered into pursuant to this section shall be effective, it must be approved by the district court and an entry made thereof in the manner required for making an entry of judgment. Once such approval is received, any breach of the conditions of such consent judgment shall be treated as a violation of a court order, and shall be subject to all the penalties provided by law therefor.

(c) In any action brought by the attorney general or the county or district attorney, the court may, without requiring bond of the attorney general or the county or district attorney:

(1) Make such orders or judgments as may be necessary to prevent the use or employment by a supplier of any practices declared to be a violation of this act;

(2) make such orders or judgments as may be necessary to compensate any consumer for damages sustained;

(3) make such orders or judgments as may be necessary to carry out a transaction in accordance with consumers' reasonable expectations;

(4) appoint a master or receiver or order sequestration of property whenever it shall appear that the supplier threatens or is about to remove, conceal or dispose of property to the damage of consumers to whom restoration would be made under this subsection or whenever it shall appear that the property was derived or is commingled with other property derived from transactions involving violations of the act, the court shall assess the expenses of a master or receiver against the supplier;

(5) revoke any license or certificate authorizing that supplier to engage in business in this state;

(6) issue a temporary restraining order or enjoin any supplier from engaging in business in this state;

(7) award reasonable expenses and investigation fees, civil penalties and costs; and

(8) grant other appropriate relief.

(d) If an order of sequestration is issued pursuant to paragraph (4) of subsection (c):

(1) Application for such order shall be by motion verified by an affidavit setting forth facts in support thereof and the court may hear such motion ex parte;

(2) such order shall operate as a lien on the sequestered property and may contain other provisions as the court deems appropriate;

(3) if such order of sequestration was issued ex parte, such order shall be served upon the supplier whose property is sequestered not later than five days after such order is issued. Service shall be by any manner permitted by the code of civil procedure or by ordinary first class mail to the last known address of the supplier;

(4) a supplier whose property is sequestered may file a motion to dissolve the sequestration, verified by affidavit, putting in issue the sufficiency of the proceedings, the supplier's claim of exemption as to any property which has been sequestered, or the truth of the facts alleged in the affidavit on which the sequestration was ordered. The court shall hold a hearing on the motion within five days after the filing; and

(5) upon a finding that the party which obtained an ex parte order of sequestration knew or should have known that grounds for sequestration did not exist, the court, upon a motion to dissolve, may allow actual damages for the wrongful sequestration.

History: L. 1973, ch. 217, § 10; L. 1991, ch. 159, § 6; L. 1993, ch. 177, § 2; L. 2001, ch. 187, § 1; July 1.

KANSAS COMMENT, 1973

1. Subsection (a) authorizes the attorney general to obtain declaratory and injunctive relief in addition to the recovery of actual damages on behalf of individual consumers. Recovery of actual damages does not include a class action; the latter if available, however, to an aggrieved consumer as a private remedy in certain limited cases under K.S.A. 1975 Supp. 50-634(d). In those actions which are proper for the attorney general, he may recover reasonable expenses and investigation fees.

2. Subsection (b) authorizes the attorney general to terminate investigative and enforcement proceedings upon acceptance of a consent judgment, which does not in itself constitute an admission of any violation. If the terms of the judgment are breached by the supplier, however, the breach will be treated like any other violation of a court order. Fees and expenses, as well as provisions for restitution, may be included in a consent judgment under this subsection. This provision is somewhat analogous to the "assurance of discontinuance" established in the old Buyer Protection Act.

3. Subsection (c) provides for broad and flexible remedies available to the attorney general when he recovers a judgment against violations of the act.

Law Review and Bar Journal References:

Powers of attorney general mentioned in discussion of new consumer legislation in Kansas, Barkley Clark 42 J.B.A.K. 147, 189 (1973).

Landlord-tenant implied warranty of habitability, 22 K.L.R. 666, 683 (1974).

Consumer protection in Tenth Judicial District, William P. Coates, Jr., 44 J.B.A.K. 67, 70, 104, 105 (1975).

"A New Kansas Approach to an Old Fraud," consumer protection, Polly Higdon Wilhardt, 14 W.L.J. 623, 637 (1975).

"U.C.C.—Limitations on Personal Injury Damages for Breach of Warranty," 14 W.L.J. 714 (1975).

"2001 Legislative Wrap-Up," Paul T. Davis, 70 J.K.B.A. No. 7, 14 (2001).

"Why Punitive Damages Should Be a Jury's Decision in Kansas: A Historical Perspective," Ryan Fowler, 52 K.L.R. 631 (2004).

CASE ANNOTATIONS

1. Debt collection agency is "supplier" within meaning of Consumer Protection Act. State ex rel. Miller v. Midwest Service Bureau of Topeka, Inc., 229 K. 322, 324, 623 P.2d 1343.

2. Application of act to direct mail business did not violate Art. 1, § 8 or first, fifth or 14 th amendments to U.S. Constitution; federal interest in preventing fraud does not preclude state law on subject. Conte & Co., Inc. v. Stephan, 713 F.Supp. 1382 (1989).

3. Discussed in holding a university student is not considered an aggrieved consumer under 50-634. Finstad v. Washburn University, 252 K. 465, 470, 473, 845 P.2d 685 (1993).

4. Insuring against civil penalties associated with wrong doer's own actions violates state public policy. State Farm Fire & Cas. Co. v. Martinez, 26 K.A.2d 869, 873, 995 P.2d 890 (2000).


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