From Connecticut Superior Court Judge Daniel Klau's long opinion last week in State v. Indie Guns LLC:
The principal question presented is whether the Connecticut Unfair Trade Practices Act applies to deceptive and unfair advertisements that appear on a Florida limited liability company's website. By its plain language, CUTPA only applies to unfair and deceptive acts and practices that occur in trade or commerce in Connecticut. See General Statutes § 42-110a (4) (defining trade and commerce as "the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property … in this state." (emphasis added]).
As set forth below, the court concludes that an out-of-state or foreign company that operates an interactive internet website is not, on that basis alone, engaged in trade or commerce in Connecticut. Consequently, the court lacks the statutory authority under CUTPA to impose civil penalties on such foreign companies based solely on allegedly false and deceptive advertisements on their websites. To hold otherwise would require the court to ignore the clear limits that the General Assembly placed on the geographic scope of CUTPA and would expose foreign companies across the country, if not the world, to CUTPA liability based solely on statements that appear, or allegedly should appear per Connecticut law, on their websites….
In 2019, the State of Connecticut enacted … "An Act Concerning Ghost Guns," to address the growing public safety threat posed by untraceable firearms. Ghost guns are privately made firearms that do not have serial numbers and cannot be traced back to the original owner or dealer. The act provides, in relevant part, "[n]o person shall purchase or receive or sell, deliver or otherwise transfer an unfinished frame or lower receiver, except as provided [herein]." The act does not proscribe advertising the sale of such components….
[T]he manufacture and sale of ghost guns and parts remain legal under state law throughout much of the United States, including in the State of Florida…. [T]he federal Gun Control … does not ban ghost gun parts outright. Nor does it ban advertising. Rather, it requires sellers to secure federal licenses, conduct background checks, keep sales records, and mark their products with serial numbers.
[The Act Concerning Ghost Guns] is a penal statute, the violation of which is a Class C felony. Although the Office of the Attorney General generally lacks the legal authority to enforce the state's criminal laws through criminal prosecutions, it has the authority to enforce CUTPA. In March 2023, the Office of the Attorney General announced that it had filed the present civil lawsuit against four out-of-state firearm companies. The lawsuit alleges that the companies violated CUTPA by advertising the sale, offering for sale, and selling products that are expressly prohibited under Connecticut law except in limited circumstances not relevant to this case….
Indie Guns LLC[] is a Florida limited liability corporation not registered in Connecticut as a foreign corporation. Indie Guns operated a website that advertised ghost gun parts for sale. After Indie Guns failed to file an appearance, the state moved for entry of a default, which the clerk granted in the normal course…. [At the damages hearing], the state introduced evidence of a single sale of ghost gun parts to an undercover agent in Connecticut…. [T]he state seeks the maximum civil penalty under CUTPA of $5000 for each day that Indie Guns' website operated between October 1, 2020 and the hearing in damages, i.e., 1539 days. Thus, the state seeks a total civil penalty of $7,695,000….
