Huch v. Charter Communications, Inc.: Consumer Prey, Corporate Predators, and a Call for the Death of the Voluntary Payment Doctrine Defense

Abstract

This paper explores the evolution of the voluntary payment doctrine ("VPD"). The VPD was originally an equitable doctrine that, in its most common formulation, held that absent fraud or duress, a person who with full knowledge of the facts, voluntarily pays money to another cannot later recover the money back even if it was not legally owed. In essence, the rule prevented a person from complaining about a new deal that was struck, even if the new deal might like traditional consideration.

The problem in the modern era was that courts began to apply the VPD in new settings. For example, in a string of cases, cable companies were sued in class actions. The allegations were that the company added an illegal charge to the bill. The companies defended, asserting the VPD. They argued that the consumers could have discovered the charge on the bill and they could have learned it was not legally owed. Since the consumers paid nonetheless, the cable companies argued they "voluntarily paid" in the absence of fraud and duress, with full knowledge (or the ability to obtain full knowledge) of the facts. Courts began to buy these arguments.

Then, in Huch v. Charter, the Missouri Court of Appeals rendered a decision that threatened to turn the VPD into a full fledged consumer class action killer. The Court held that even though the plaintiff alleged that Charter Cable added a fee for unsolicited merchandise, and even though the plaintiff alleged this violated specific provisions of the consumer fraud act in Missouri, and even though the plaintiffs alleged they did not discover the fee right away, the VPD barred the claim.

The Missouri Supreme Court reversed, holding that applying the VPD to consumer fraud claims is never appropriate, as it would allow for waiver of substantive rights under the consumer fraud laws. The article argues that the reasoning in Huch v. Charter is sound and should be adopted by courts around the country. It supports this argument two ways. First, it provides a legal historic foundation that traces the actual origin and purpose of the VPD, concluding the VPD was never meant to exculpate defendants for intentional conduct. Second, it provides a policy based argument that suggests allowing the VPD to exculpate defendants would produce perverse economic incentives which encourage business to cheat creatively in the hopes the consumer will pay before they catch the fraud, thereby waiving their claim.

Keywords: consumer, consumer fraud, voluntary payment doctrine, VPD, duress, full knowledge, UDAP, Huch, Huch v. Charter