Suing a Competitor for Unfair and Deceptive Trade Practices Under Hawaii HRS 480

Running a successful business in Hawaii requires hard work and a solid reputation. Unfortunately, some competitors choose to cheat rather than compete fairly. When a rival business intentionally lies about your products, slashes prices below cost to drive you out of the market, or steals your client lists, they are engaging in illegal business practices. You do not have to simply absorb the financial loss. Hawaii provides robust legal tools to sue unethical competitors. To protect your market share, we highly recommend using our directory to find a Hawaii commercial litigation attorney who specializes in unfair competition cases.

Understanding HRS 480 and Unfair Methods of Competition Claims

In Hawaii, commercial disputes between rival businesses are governed by Haw. Rev. Stat. § 480-2. While this statute addresses both unfair competition and deceptive practices, subsection Haw. Rev. Stat. § 480-2(d) strictly limits Unfair or Deceptive Acts or Practices (UDAP) claims to individual consumers. To sue a rival business, a commercial enterprise must bring an Unfair Methods of Competition (UMOC) claim under Haw. Rev. Stat. § 480-2(e). If a competitor's unlawful actions are harming your enterprise, your attorney can file a civil action in the Circuit Court of the First Circuit, Honolulu using Form 1C-P-167, Hawaii, Circuit Court of the First Circuit, Civil Information Sheet.

The Burden of Proof Required for UMOC Claims

Suing a competitor involves a higher legal threshold than a standard commercial tort. To prevail on an Unfair Methods of Competition claim under Chapter 480, a plaintiff cannot merely show individual financial injury or sharp business practices. As established in Hawaii Medical Association v. Hawaii Medical Service Association, 113 Haw. 77 (HI Supreme Court 2006), a business plaintiff must sufficiently plead the nature of the competition and demonstrate that the competitor's conduct caused antitrust injury that harms the competitive process in the broader marketplace.

Common Micro-Topics in Unfair Competition

Competitors use a variety of illegal tactics to gain an edge. Here is how Hawaii law addresses specific scenarios.

False Advertising

If a competitor runs a marketing campaign that spreads blatant lies about your product (e.g., claiming your tour company uses unsafe boats when you have a perfect safety record), you can sue them for false advertising and trade libel. You can also sue if they make objectively false claims about their own product to trick consumers into buying from them instead of you.

Predatory Pricing

While healthy price competition is good, 'predatory pricing' is illegal. This occurs when a massive competitor intentionally lowers their prices below their actual cost of manufacturing with the specific intent of driving a smaller competitor out of business. Once the small business closes, the large competitor creates a monopoly and instantly skyrockets prices. Proving this requires intense financial forensic accounting.

Tortious Interference with Customers

If you have signed contracts with local vendors or clients, and a competitor intentionally tricks, bribes, or threatens those clients into breaking their contracts with you, it is called tortious interference. Your attorney can sue the competitor for the exact amount of revenue you lost because they unlawfully poached your contracted customers.

Financial Remedies and Damages

The beauty of an HRS 480 lawsuit is the severe financial penalty it imposes on the bad actor, making it highly attractive for aggrieved businesses.

The Potential for Treble Damages

Under Haw. Rev. Stat. § 480-13, if your business is injured by an antitrust violation or unfair competition, the court can award 'treble damages.' This means if you prove the competitor's unlawful actions cost you $100,000 in actual damages, the judge can multiply that number by three, awarding $300,000. This remedy is intended to deter anti-competitive conduct in the marketplace.

Attorney Fee Shifting

Business litigation is notoriously expensive. However, Chapter 480 includes a mandatory fee-shifting provision. If you win your unfair competition lawsuit, the judge will order the guilty competitor to pay your attorney's fees and court costs. This allows small businesses to fight back against massive corporations without going bankrupt in the process.

How Much Does it Cost?

Because these cases involve deep corporate investigations and expert witnesses, the upfront costs are significant.

How Long Does the Process Take?

Complex commercial litigation is a marathon. From the day you file the complaint in Circuit Court to the day a jury delivers a verdict, a Chapter 480 lawsuit typically takes 18 to 36 months. However, your attorney can often file for a preliminary injunction early in the process to force the competitor to stop the false advertising immediately while the lawsuit proceeds.

Frequently Asked Questions (FAQ)