Consumer Protection Division v. Luskin's, Inc.

⁶ SALMON, Judge. In the summer of 1992, Luskin’s, Inc. (Luskin’s) advertised “FREE AIRFARE FOR TWO” to Florida, the Bahamas, or Hawaii for customers who purchased at least $200 of goods from its stores (hereinafter referred to as “the First Ad”). On September 28, 1992, the Consumer Protection Division of the Office of the Attorney General (the Division) filed an administrative enforcement action against Luskin’s, charging that the First Ad violated sections 13-303 and 13-305 of Maryland’s Consumer Protection Act (the CPA), Md.Code (1974, 1990 Repl.Vol.), §§ 13-101 to 13-501, Com. Law II Article. 1 After a two-day administrative hearing that took place on November 13 and December 8, 1992, the administrative law judge (ALJ) issued her proposed decision, to which the parties filed exceptions.

The Agency (the Division acting as a quasi-judicial entity), after a hearing, issued a Final Decision and Order on September 21,1993. The Agency confirmed the ALJ’s conclusion that Luskin’s First Ad contained misleading representations and omissions of material facts as defined in CPA section 13-301(1), (3), (9), and prohibited by section 13-303, and involved an unlawful prize promotion under section 13-305. Luskin’s then filed, in the Circuit Court for Harford County, an appeal from the Agency’s Final Decision and Order. While the administrative action was being prosecuted, a separate but parallel declaratory judgment action was proceeding in the Circuit Court for Harford County.

Luskin’s filed a complaint for declaratory judgment approximately two weeks before the Division initiated its enforcement action. Luskin’s requested that the circuit court declare that its proposed second advertisement (hereinafter referred to as “the Second Ad”), which was a modified version of the First Ad, did not violate section 13-305 of the CPA. Ultimately, the circuit court declared that the Second Ad did not violate the CPA, but the Division appealed that judgment. We held that the circuit court abused its discretion in granting declaratory ⁷ relief for Luskin’s because the Division’s enforcement action against Luskin’s was underway by the time the trial judge made his ruling in the declaratory judgment suit.

See Consumer Protection Div. v. Luskin’s, Inc., 100 Md.App. 104, 112 , 640 A.2d 217 (1994), aff'd, 338 Md. 188 , 657 A.2d 788 (1995). We concluded that the pending enforcement action against the First Ad would resolve the same legal issue raised in Luskin’s suit regarding the Second Ad. Id. We also held that, even though the declaratory judgment suit was filed before the administrative enforcement action, under the doctrine of primary jurisdiction, the circuit court should have deferred to agency expertise.

Id. at 114-15, 640 A.2d 217 . After we issued our decision, Luskin’s appeal from the Division’s enforcement action proceeded. On December 16, 1996, the circuit court reversed the Agency’s Final Decision and vacated the Agency’s Final Order. The Division noted a timely appeal and presents the following questions for our review, which we have rephrased for clarity: 1.

Did the Agency err in concluding that Luskin’s violated section 13-301 of the CPA with its free airfare advertisement? 2. Did the Agency err in concluding that Luskin’s violated section 13-305 of the CPA? 3. Did the Agency err in rejecting Luskin’s defenses that the Division’s enforcement action was barred because it was “filed for retaliatory purpose” or, alternatively, that it was barred by the doctrine of accord and satisfaction? 4. Did the Agency err in providing injunctive and affirmative relief?

We answer all questions in the negative and reverse the judgment of the circuit court. FACTS Luskin’s First Ad read: 2 ⁸ FREE* AIRFARE FOR TWO ... TO FLORIDA, THE BAHAMAS OR HAWAII. *Buy an Appliance, TV, Stereo, VCR, or any Purchase over $200 And You’11 Get a Big Gift For Two (Round Trip Airfares). Buy Selected Items for $200-$299.

(Get Airfare for 2 To/From) FLORIDA Buy Selected Items for $300-$399. (GetAirfare for 2 To/From) BAHAMAS Buy Selected Items over $400. (Get Airfare for 2 To/From) HAWAII TICKETS MUST BE USED WITHIN ONE YEAR ASK FOR DETAILS. * Vacations Premiums Offered Through Vacation Ventures, Inc. Which is not affiliated with Luskin’s. Minimum Hotel Stay Required.

See Store For Details ____ Applicable Taxes Apply. See Store For Details. Luskin’s placed this advertisement in newspapers and ran related ads on television. 3 A careful reading of the newspaper advertisements alerted customers, prior to their making purchases, to the following facts: '(1) free airfare was contingent upon the purchase of goods of a certain dollar amount; (2) Vacation Ventures, Inc. (WI), which was not affiliated with Luskin’s, offered the “Vacation Premiums”; (3) tickets must be used within one year; (4) a minimum hotel stay was required; and (5) applicable taxes were the consumer’s responsibility. After consumers made a qualifying purchase, and took delivery of the goods, they were given a WT brochure and airfare certificate (collectively, travel certificate).

The airfare certificate was a Luskin’s computer printout that stated, “This certificate entitles you to two free airline tickets from virtually anywhere in the U.S. to__” The promotional brochure was a three-fold color pamphlet describing the vacation packages to Florida, the Bahamas, and Hawaii. The brochure also contained a page of terms and conditions and a “registration ⁹ request form” (the RRF). The terms and conditions listed prices, including costs for: (1) the seven- to twelve-day minimum hotel accommodations; 4 and (2) the non-refundable $15-per-person processing fee that had to accompany the RRF. Consumers were also notified by the terms and conditions that: (1) the RRF must be completed and received by WI at least 45 days in advance of the earliest requested date of departure; (2) the RRF must include three valid choices of departure dates, each separated by 15 days; (3) the balance of the vacation cost must be paid at least 45 days prior to departure; (4) prices were not guaranteed until WI received payment in full; (5) various fees and taxes were not included in the offer; 5 and (6) certain “black-out” dates and other travel restrictions applied.

After a consumer sent the completed RRF and processing fee to WI, a Florida corporation that markets travel packages, WI provided the consumer with a “confirmation of availability” (the confirmation). The confirmation set forth the cost of the vacation and disclosed downpayments and balance payments terms. In sum, the travel certificate entitled a consumer to receive “free” airfare, but only if the consumer: (1) paid WI a $15.00 fee; (2) paid WI for the required hotel accommodations in hotels selected by WI, for the length of time specified by WI, and at the rates set by WI; and (3) paid WI certain additional fees. Luskin’s purchased 14,600 brochures from WI.

It paid between $5.35 and $5.40 for each brochure. Although the record does not indicate how many brochures were distributed, WI received only 128 RRF’s from consumers as a result of the First Ad. Of the 128, only eleven consumers actually took vacations offered through WI. ¹⁰ The First Ad came to the Division’s attention when an ad agency contacted the Division, seeking its guidance in an advertisement promotion it was creating for an auto dealership. The ad agency’s proposed campaign raised concerns under the CPA similar to those raised by Luskin’s First Ad.

As a result, the Division initiated a review of Luskin’s airfare promotion. On July 27, 1992, the Division wrote to Luskin’s, advising it of the prohibitions under CPA section 13-305. It requested that Luskin’s discontinue its First Ad. In response, Luskin’s requested a meeting with the Division.

The Division and representatives of Luskin’s met on July 30 and 31 of 1992. The Division informed Luskin’s that the First Ad was not in compliance with the law and must be discontinued. Shortly after the July 31 meeting, Luskin’s notified the Division that it would discontinue running the “free airfare” campaign. I. The Agency’s Administrative Proceeding The Division instituted its enforcement action on September 28,1992, to restrain [Luskin’s] from advertising and providing travel certificates to consumers in the course of selling other consumer goods and services, when the advertisements of the travel certificates misrepresent that they provide free airfare, fail to disclose the cost and terms and conditions of redeeming the certificates, and constitute an unlawful prize promotion.

The Division sought injunctive relief to prohibit Luskin’s from violating CPA sections 13-303 and 13-305 and sought restitution for injured consumers. Section 13-301 provides a non-exhaustive list of unfair or deceptive trade practices, including such practices as making a statement that has the tendency to deceive, omitting a material fact, and misrepresenting or omitting a material fact with the intent that the consumer rely on the same. Section 13-303 prohibits unfair and deceptive trade practices. Section 13-305 prohibits a person from notifying another person of ¹¹ eligibility to receive something of value if receipt is conditioned on the purchase of goods or services.

During the administrative hearing, the Division called five consumer witnesses to testify. Evan Revelle, age 71, testified that he bought his washing machine at Luskin’s because, in addition to the fact that he needed a new washer, he had heard about the free airfare offer on television. To him, it “sounded like a good deal.” He was not given a copy of the WI brochure until after he made his purchase, and until then, he did not know about the minimum hotel stay requirement. Once Mr. Revelle reviewed the brochure, he made cost calculations regarding the WI offer and compared them to vacation prices he saw listed in newspapers.

He concluded, “I could safely disregard ... Luskin’s offer, because I could get the same transportation far cheaper through U.S. Air or United.” He, therefore, decided not to send in the RRF. On cross-examination, it was shown that Mr. Revelle had made inaccurate cost comparisons because his calculations regarding WI’s hotel prices were not based on double occupancy. Michael Driggs testified that he bought a television set at Luskin’s because of the airfare offer he had seen advertised on television.

After paying for his merchandise, he was told that Luskin’s had run out of travel certificates and that he would have to return at a later date to receive one. After Mr. Driggs picked up the certificate and read its contents, he learned of the numerous qualifications to the “free” ticket offer and concluded that he “could do a whole lot better” on his own. In drawing this conclusion, he based his calculations on an estimate of $100 per day for the hotel accommodations for a Florida vacation. 6 Robert Shifflet also made his purchase at Luskin’s based on a television ad publicizing its “free” airfare. He testified that when he requested information in advance of his purchase, he ¹² was told that he would not receive the travel certificate until after he made his purchase.

He initially thought that Luskin’s would give him “two tickets at the store.” After making the required purchase and receiving the WI brochure, he realized that he would have to pay for hotel stays “at certain places of [WI’s] choice for a set number of days.” Dorraine Johnson testified that she had seen the Luskin’s television and newspaper advertisements. Her husband wanted to go to Luskin’s to buy a television, and she agreed because of the airfare offer. She asked a Luskin’s salesman about any “gimmicks” involved in the offer and was told that there were none and that she would get written information about the promotion upon delivery of her merchandise. Ms. Johnson testified that she had not seen the “minimum hotel stay required” in the advertisements.

After she made her purchase, she did not send in the RRF because of the hotel prices. David McCoy made his purchase at Luskin’s because he read of Luskin’s airfare promotion in a newspaper ad. He decided to send in the RRF, along with the processing fee. After receiving the confirmation from WI, he decided not to take the trip because: (1) the confirmation required him to respond with a $300 deposit within fifteen days; (2) any cancellation would result in forfeiture of all monies paid; and (3) between his requested dates of travel and all of the blackout days, he was only allowed one date for travel.

The Division introduced into evidence a Consumer Protection Division complaint form completed by Houd Zidan, a consumer who wrote to the Division to complain that he sent in the RRF and was told by WI that he could not get any of the travel dates he requested. Moreover, according to Mr. Zidan, he could get “much more” through other travel agents he had contacted for the price charged by WI. Luskin’s president, Cary Luskin, was the sole witness to testify on behalf of Luskin’s. Mr. Luskin testified that he had researched the WI airfare promotion to see if there had been any complaints or problems associated with similar advertising ¹³ campaigns that had run across the country.

He stated that everyone he had spoken to “had no problem.” He also testified that there was a sample WT brochure on display at the stores so that a customer could read details about the offer prior to making a purchase. Moreover, when asked, “So when you’re saying it’s conceivable that someone could have got [sic] a lower price on the hotel room, correct, would that lower price have made up for the savings in airfare?”, Mr. Luskin responded, “Not in my opinion.” Luskin’s also entered into evidence a letter written by Karen Ingersoll, Ph.D. Dr. Ingersoll said: I first heard Luskin’s add [sic] in May of ’92 on TV. As I recall, the ad indicated that free airfare for 2 was available with a minimum purchase. Because I was already planning to buy an air conditioner, I went to the store in Richmond to get the details of the offer.

At the store, I was given more information in the form of a written brochure and verbally by the salesperson. I asked him for the details of the offer, and he explained that the airfare would be granted if I bought a minimum stay at a choice of hotels through a travel agency. He also gave me a 3 page color brochure describing the hotels available, listing their prices, etc. I had previously priced a vacation package to travel to Disney World at $2400 through a travel agent. The airline tickets alone at that time cost $740 for 2.

When I added the cost of the Vacation Ventures package, I realized it would cost only $1700, saving me $700. Therefore, I decided to purchase the air conditioner at Luskin’s rather than somewhere else. Dr. Ingersoil’s letter also stated that she enjoyed her vacation through WT and that she “never felt misled.” 7 ¹⁴ At the hearing before the ALJ, Luskin’s contended that the Division’s enforcement action was barred by an accord and satisfaction and, alternatively, that the action violated Luskin’s substantive due process rights in that the company was singled out for prosecution because it exercised its constitutional right to file a declaratory judgment action. In support of these two affirmative defenses, Luskin’s relied upon: (1) an affidavit of Cary Luskin; (2) testimony of Mr. Luskin; and (3) a “proffer” by Luskin’s counsel as to his recollection of what transpired at the July 30 and 31, 1992, meetings between representatives of Luskin’s and the Division.

The Division, in rebuttal, submitted the proffer of its attorney, Rebecca Bowman, as to her recollection of the July 1992 meetings with Luskin’s. Mr. Luskin testified that he attended a meeting with the Division on July 31, 1992. Also in attendance at the meeting, among others, were Luskin’s attorney, Thomas Wood, and Rebecca Bowman, representing the Division. At the meeting, the Division took the position that Luskin’s had violated section 13-305.

Luskin’s was told that if it continued to run the First Ad the “Division would file a lawsuit” against it. Mr. Luskin testified: We tried to state our case that we thought we were not in violation and we had no intention of deceiving anybody because we had 44 years of trust built up with the consumer, that we didn’t want to violate that trust, that when we left the meeting as far as we were concerned if we just stopped running the ad everything was over. After the meeting, Luskin’s made arrangement to cancel the First Ad. Luskin’s then submitted a proposed Second Ad, which did not say that the airfare was free.

That ad, too, was deemed by the Division to be violative of the CPA. Because of the rejection of the Second Ad, Luskin’s instituted the aforementioned declaratory judgment action. The affidavit of Mr. Luskin, to a large extent, mirrored his testimony before the ALJ — with one major exception. In the affidavit, he stated that after the meeting on July 31, 1992, “I ¹⁵ agreed to temporarily voluntarily remove the advertisement from both print and television media and immediately began working on a new advertisement campaign.” (Emphasis added.) In contrast, his testimony, at a minimum, at least implied that he advised the Division that he intended never to run the First Ad again.

Both counsel testified by way of proffers, which were accepted by the ALJ. Mr. Wood, counsel for Luskin’s, said in his proffer: At both of those meetings the advertisement campaign was discussed. At both of those meetings it was indicated to me that if ... Luskin’s did not cease running the ad that an enforcement action would be filed in connection with the ad.

On the second meeting which was on July 31, 1992, a number of discussions took place regarding the ad. If we change language this way or if we change language that way, would it be acceptable and the upshot of all of that was that we couldn’t agree. There was no discussion at that meeting to the best of my knowledge regarding restitution, payment to any consumers in the state or anything of that nature. That day a decision was made not to run the ad any longer.

I can’t recall whether that decision was made in the presence of the attorney general or after our meeting. I tend to think it was after and I think that decision was communicated to them I think that day. Later in the proffer, Mr. Wood said: We assumed, and obviously wrongfully so, that if we stopped the ad that would be the end of it. We filed a lawsuit on the proposed ad in Harford County on September 11, 1992.

We actually filed a couple of things. We filed a Motion for Interlocutory Injunction asking for affirmative relief that would rule that we could run the ad and we filed a complaint for declaratory judgment. To the best of my recollection, there were no communications between the filing of those papers and the date of the motion to dismiss the declaratory judgment, which was on September 28, 1992, between me and the attorney general regarding ad ¹⁶ ministrative hearing, restitution or money to any consumers. (Emphasis added.) Counsel for the Division said in her proffer, inter alia: At both the July 30 and 31 meetings, the Division advised Luskin’s that if it did not discontinue its current free airfare advertisements, the Division would bring enforcement action against Luskin’s..

At no time during either of these meetings or in subsequent discussions with Luskin’s counsel did the Division make any representations as to what action it would or would not take against Luskin’s if the company, in fact,, discontinued its current free airfare promotion. Shortly after the July 31, 1992, meeting, Luskin’s agreed to cease running its free airfare advertisement. Luskin’s, however, neither agreed that its advertisements violated section 13-305 nor that it would refrain from renewing those advertisements or some variation thereof at some point in time in the future. The Agency’s Final Decision addressed the Division’s charges made against Luskin’s, as well as the affirmative defenses put forth by Luskin’s. 8 Based on many factual findings, the Agency, using the definitions set forth in section 13-301(1), (3), (9), held that Luskin’s violated section 13-303. 9 It also concluded that Luskin’s violated section 13-305.

The Agency rejected all of Luskin’s affirmative defenses. Following its Final Decision, the Agency issued an order providing ¹⁷ for injunctive and affirmative relief. We discuss below the Agency’s findings of fact, its holdings, and its order. A. Section 13-301(1) Section 13-301(1) reads: Unfair or deceptive trade practices include any: (1) False, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers!)] The most prominently featured words of the newspaper ads were “free airfare for two.” The next most prominent language listed the purchase amounts necessary to qualify for the “big gift for two.” The disclaimer, which noted the minimum hotel stay requirement and WTs involvement in the promotion, was in the smallest print.

In its Final Decision, the Agency said that the “total impression” conveyed to consumers was that Luskin’s “ ‘free airfare’ promotion entitled them to free airfare to one of three destinations upon the purchase of two to four hundred dollars worth of Luskin’s merchandise.” The Agency held that Luskin’s advertising campaign ran afoul of the definition set forth in section 13-301(1) by misleading consumers into thinking that they would receive free airfare when, in fact, they were given a travel certificate for a vacation program that would cost a minimum of “hundreds of dollars” to redeem. The Agency also concluded that, even if consumers had carefully read the advertisement, the disclaimer was ambiguous because “[c]onsumers reasonably could assume that they had to arrange for and pay for hotel accommodations themselves,” which was not permitted under any of the travel packages. In the Agency’s opinion, the disclaimer did not dispel the impression that the “airfare primarily was conditioned upon the purchase of consumer goods at Luskin’s and that any further condition or requirement would be secondary”; the cost of purchasing the con ¹⁸ sumer goods, however, became secondary, when compared with the cost of redeeming the travel certificate. B. Section 13-301(3) Section 13-301(3) defines an unfair or deceptive trade practice as including: (3) Failure to state a material fact if the failure deceives or tends to deceived] According to the Agency’s factual findings, consumer witnesses had not seen a sample WI brochure on display at Luskin’s stores prior to purchase.

The Agency found that Luskin’s salespeople did not volunteer information about the details of the free airfare offer, and when asked, “generally did not explain the offer beyond what was represented in the advertisements.” WI supplied additional information to a consumer only after it received the non-refundable fee and the RRF from the consumer. Because consumers were informed about the terms and conditions of the vacation packages in a piecemeal fashion after they made their purchases from Luskin’s, the Agency held that Luskin’s had engaged in a deceptive trade practice as defined in section 13-301(3). According to the Agency, Luskin’s should have disclosed, prior to purchase, the material fact that free airfare was actually part of a vacation package offer. The Agency opined that subsequent disclosures by Luskin’s and WI did not “cure the initial misrepresentation or material omission.” C. Section 13-301(9) Section 13-301(9) includes in the definition of an unfair or deceptive trade practice: (9) Deception, fraud, false pretense, false premise, misrepresentation, or knowing concealment, suppression, or omission of any material fact with the intent that a consumer rely on the same in connection with: (i) The promotion or sale of any consumer goods, consumer realty, or consumer service____ ¹⁹ As previously stated, the Agency held that Luskin’s misrepresented, as well as omitted material facts about, the airfare offer.

According to the Agency, Luskin’s “intended that consumers rely,” and consumers “did rely,” on its advertised free airfare offer in “deciding to shop at, and buy consumer goods and services from, Luskin’s.” Therefore, the Agency held that under the definition provided by section 13-301(9), Luskin’s airfare promotion was unfair or deceptive. D. Section 13-305 The full text of section 13-305(a) and (b) is quoted in the analysis section, infra. In part, section 13-305 states: (a) Exception. — This section does not apply to: (3) Retail promotions, not involving the offer of gifts and prizes, which offer savings on consumer goods or services including “one-cent sales”, “two-for-the-price-of-one-sales”, or manufacturer’s “cents-off” coupons!.] (b) Prohibition. — A person may not notify any other person by any means, as part of an advertising scheme or plan, that the other person ... is eligible to receive anything of value if the other person is required to purchase goods.... The Agency held that section 13-305 governed Luskin’s advertising promotion; that Luskin’s offer of “free airfare” was something of value; that receipt of free airfare was conditioned on the purchase of goods from Luskin’s; and that this type of offer violated the statute.

Moreover, the Agency held that the exception set forth in section 13-305(a)(3) for a retail promotion, not involving the offer of gifts or prizes, but which represented savings on consumer goods, was inapplicable. The Agency found that the “free airfare” was represented by Luskin’s as a gift. The Agency explained that, although the consumer actually received a WI brochure and airfare certificate rather than free airfare, this fact was “not germane to a determination of whether the promotion was prohibited” by this section because ²⁰ the relevant consideration was whether the ad offered a gift, not what was actually received. Finally, in stating that the free airfare did not represent savings on consumer goods, the Agency found that the total cost of the vacation package to a consumer was “hundreds to thousands of dollars” and that comparable packages, -without other purchase requirements, were available through travel agents.

E. Luskin’s Affirmative Defenses 1. Accord and Satisfaction Luskin’s argues that the two July 1992 meetings it had with the Division resulted in an accord and satisfaction between the parties because the Division agreed not to bring charges if Luskin’s pulled its First Ad, which Luskin’s did. The Agency found “no evidence of any oral or written agreement between the parties that the Division would refrain from pursuing an enforcement action if Luskin’s withdrew the advertising campaign.” The Agency also determined that “by Luskin’s own admission, it only withdrew these advertisements temporarily.” Therefore, it concluded that accord and satisfaction did not bar the Agency from bringing charges against Luskin’s. 2. Retaliation and Selective Enforcement The Agency also rejected Luskin’s claims that the Division had brought charges against it with a retaliatory purpose.

The Agency agreed with the Division’s claim that the filing by Luskin’s for declaratory relief signaled to the Division the failure of “conciliation efforts regarding Luskin’s advertising campaign.” The motivation for the filing of charges, therefore, was not retaliation. The Agency also concluded that the bringing of charges did not result in selective enforcement. F. Final Order In conjunction with its Final Decision, the Agency issued a Cease and Desist Order and a General Restitution Order. It granted injunctive relief, which required Luskin’s: (1) to not ²¹ use advertising that had the capacity to deceive or that failed to state a material fact; (2) to ensure that its advertisements were non-deceptive by, inter alia, disclosing advertising statements “clearly and conspicuously,” placing all statements relating to a particular matter “reasonably adjacent to each other,” and not making ambiguous statements; and (3) to comply with section 13-305, and, as such, if Luskin’s wished to conduct retail promotions that offered consumers monetary savings on the purchase of consumer goods and services, it could do so by offering a price reduction on two or more “functionally related” items.

The Agency’s order also provided for affirmative relief for eligible consumers. An eligible consumer was one who, between June 12 and August 6, 1992, purchased merchandise from Luskin’s that cost at least $200 and who stated that one reason the purchase was made at Luskin’s was to obtain free airfare. Luskin’s was to provide to each eligible consumer who did not use a travel certificate both the value of the promised airfare and reimbursement of funds paid to WI in an effort to redeem the certificate. Luskin’s had the option of providing the consumer with airline tickets or paying the consumer the stated cash value of the tickets.

If the consumer received tickets, the tickets could be used on any date for a period of one year after the date of issue. For consumers who did redeem the certificate, Luskin’s was to reimburse all payments made in order to redeem the certificate, except for payment for accommodations that had been used. The order provided for an administration process that required each eligible consumer to fill out a claims form, and required a claims administrator to review the forms to ensure that eligibility requirements were met by each individual consumer before any relief was provided to that consumer.

II

The Circuit Court Proceeding In addition to reversing several factual findings, the circuit court held that the Agency applied an incorrect legal standard in determining whether Luskin’s violated section 13-303. Based on what it determined to be the proper legal standard, ²² the circuit court held that Luskin’s actions did not violate section 13-303. According to the circuit court, the Agency also incorrectly interpreted section 13-305. The circuit court also ruled that an accord and satisfaction existed between the Division and Luskin’s, which the Division violated by bringing its enforcement action.

Moreover, the circuit court held that the Agency acted unconstitutionally because it brought charges against Luskin’s in retaliation for-Luskin’s exercising its statutory right to ask for declaratory relief. According to the circuit court, this retaliation resulted in selective enforcement against Luskin’s because the Division did not bring similar proceedings against other companies who purportedly engaged in advertising campaigns similar to Lus-kin’s. The trial judge signed an order that said that the Agency’s Final Decision and Order was “STRICKEN, VACATED, and deemed a NULLITY.” ANALYSIS I. Standard of Review Our role in reviewing the decision of an administrative agency “is precisely the same as that of the circuit court.” Department of Health and Mental Hygiene v. Shrieves, 100 Md.App. 283, 303-04 , 641 A.2d 899 (1994); see also Baltimore Lutheran High Sch. Ass’n v. Employment Sec. Admin., 302 Md. 649, 662 , 490 A.2d 701 (1985).

We, therefore, do not evaluate the findings of fact and conclusions of law made by the circuit court. We review the administrative decision itself, see Public Serv. Comm’n v. Baltimore Gas & Elec. Co., 273 Md. 357, 362 , 329 A.2d 691 (1974), and not the decision of the trial court.

Maryland State Dep’t of Educ. v. Shoop, 119 Md.App. 181, 203-04 , 704 A.2d 499 , 510 n.6 (1998). With respect to issues of law, the agency’s interpretation is not ordinarily entitled to deference. Ramsay, Scarlett & Co. v. Comptroller of the Treasury, 302 Md. 825, 837 , 490 A.2d 1296 (1985). A court may substitute its own judgment ²³ for that of the agency when resolving questions of law.

Id.; see also Columbia Road Citizens’ Ass’n v. Montgomery County, 98 Md.App. 695, 698 , 635 A.2d 30 (1994). A court has limited power to scrutinize agency fact-finding. See Liberty Nursing Ctr., Inc. v. Department of Health and Mental Hygiene, 330 Md. 433, 442 , 624 A.2d 941 (1993); see also Anderson v. Department of Public Safety and Correctional Servs., 330 Md. 187, 212-13 , 623 A.2d 198 (1993); Shrieves, 100 Md.App. at 296-97 , 641 A.2d 899 . Under the “substantial evidence” test, “if reasoning minds could reasonably reach the conclusion reached by the agency from the facts in the record, then it is based upon substantial evidence, and the court has no power to reject that conclusion.” Liberty Nursing, 330 Md. at 443 , 624 A.2d 941 ; see also Board of County Comm’rs for Cecil County v. Holbrook, 314 Md. 210, 218 , 550 A.2d 664 (1988); Bulluck v. Pelham Wood Apartments, 283 Md. 505, 512 , 390 A.2d 1119 (1978); Snowden v. Mayor of Baltimore, 224 Md. 443, 448 , 168 A.2d 390 (1961).

The agency is responsible for “ ‘resolv[ing] conflicting evidence’ ” and for drawing inferences “where inconsistent inferences from the same evidence can be drawn.” Younkers v. Prince George’s County, 333 Md. 14, 19 , 633 A.2d 861 (1993) (quoting Bulluck, 283 Md. at 512-13 , 390 A.2d 1119 ). The agency’s decision carries a “presumption of validity,” Liberty Nursing, 330 Md. at 443 , 624 A.2d 941 , and is “prima facie correct,” Hoyt v. Police Comm’r of Baltimore City, 279 Md. 74, 88 , 367 A.2d 924 (1977). In applying the substantial evidence test, a reviewing “ ‘court should [not] substitute its judgment for the expertise of those persons who constitute the administrative agency from which the appeal is taken.’ ” Bulluck, 283 Md. at 513 , 390 A.2d 1119 (quoting Bernstein v. Real Estate Comm’n of Md. 221 Md. 221, 230 , 156 A.2d 657 (1959) (alteration in original)). On appeal, Luskin’s disputes the standard we should employ when reviewing the Agency’s application of law to fact.

Lus-kin’s argues that the Agency should not be accorded judicial deference. More specifically, according to Luskin’s, the Divi ²⁴ sion cannot rely on the deferential standard used by federal courts when reviewing the Federal Trade Commission’s (FTC) application of law to fact. Luskin’s provides two reasons for its assertion: (1) the Court in Liberty Nursing implicitly recognized that Maryland does not adhere to the federal standard of review in situations such as this; and (2) proceedings before the FTC are not analogous to proceedings before the Agency, and the reasons why deference under the federal system is accorded to the fact-finders are inapplicable in this case. Maryland courts have not relied on federal law when determining what deference should be given to an agency’s application of law to fact.

Maryland common law principles are well-established and here applicable. If there is room for the exercise of judgment in applying the law to the facts, the agency, not the court, must have the authority to exercise this judgment. See Luskin’s, 338 Md. at 195 , 657 A.2d 788 ; Friends School v. Supervisor of Assessments, 314 Md. 194, 200 , 550 A.2d 657 (1988); Ramsay, Scarlett, 302 Md. at 837-38, 490 A.2d 1296 . In numerous cases, Maryland courts have held that reviewing courts have the authority only to ensure that factual findings have met the substantial evidence test, and that there were no errors of law.

See, e.g., United Parcel Serv., Inc. v. People’s Counsel, 336 Md. 569, 577 , 650 A.2d 226 (1994) (“A court’s role is limited to determining if there is substantial evidence in the record as a whole to support the agency’s findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law.”); Younkers, 333 Md. at 19 , 633 A.2d 861 (stating, in quoting People’s Counsel v. Maryland Marine Mfg. Co., 316 Md. 491, 496-97 , 560 A.2d 32 (1989), that “ ‘[T]he order of an administrative agency must be upheld on judicial review if it is not based on an error of law, and if the agency’s conclusions reasonably may be based upon the facts proven. Ad + Soil, Inc. v. County Comm’rs, 307 Md. 307, 338-39 , 513 A.2d 893 (1986).’ ”); Banks v. Board of Physician Quality Assurance, 116 Md.App. 249, 258 , 695 A.2d 1260 , cert. granted, 347 Md. 683 , 702 A.2d 291 (1997) (stating that when reviewing an ²⁵ agency’s application of law to facts, the court “may substitute [its] own judgment for that of the agency as to the legal issue ” (emphasis added)); Relay Improvement Ass’n v. Sycamore Realty Co., 105 Md.App. 701, 713-14 , 661 A.2d 182 (1995) (“A reviewing court may not overturn an agency’s factual findings or its application of law to facts if the agency’s decision is supported by substantial evidence.”), aff'd, 344 Md. 57 , 684 A.2d 1331 (1996). The breadth of judicial review does not allow a court to substitute its judgment for that of the agency when judgment is required in applying the law to the facts.

Furthermore, Luskin’s misinterprets the holding in Liberty Nursing . In that case, the Court faced the question of which regulation was dispositive of the issues. Liberty Nursing, 330 Md. at 445-50 , 624 A.2d 941 . Although the Court framed its non-deferential review as encompassing the “accuracy of [the agency’s] application of the law, not its fact finding,” id. at 444 , 624 A.2d 941 , the Court was referring to the issue of which law should be applied.

This determination is purely one of law, not application of law to fact. The Court was not purporting to determine whether, given an accurate choice of law, the agency’s conclusion resulting from an application of that law to fact was correct. We are persuaded that Agency judgment is required in the subject case when applying the law to the facts to determine if the First Ad contained misleading representations or omitted material facts. Agency judgment is also required in formulating appropriate injunctive and affirmative relief.

As such, we will accord appropriate deference to the Agency’s applications of law to fact. Luskin’s supporting argument — that both the ALJ and the Commissioner of the Securities Division, who was the agency designee in this case, were not well-versed in the area of consumer protection law and, therefore, their decisions were not worthy of deference — is without merit. In discussing why agency deference is due, we stated in Shrieves , “ ‘[the agency is] presumed to have broad experience and expertise in ²⁶ [the area]---- Further, it is the [agency] to which [the legislature] has delegated administration of the [statute].’ ” Shrieves, 100 Md.App. at 300 , 641 A.2d 899 (alterations in original) (quoting Penasquitos Village, Inc. v. NLRB, 565 F.2d 1074, 1079 (9th Cir.1977)). As part of its experience and expertise, and in furtherance of its role as defined by the legislature, an agency has the authority to effect a designation of decision-making authority.

Courts have afforded deference to decisions made by decision-makers designated by an agency, without questioning individual qualifications. See, e.g., Anderson, 330 Md. at 205, 214-17 , 623 A.2d 198 (final order issued by designee of the State Department of Personnel’s Secretary of Personnel). Moreover, in interpreting Anderson , the Shrieves Court stated that it is the agency’s final decision, not the ALJ’s determinations, that is reviewed by the court. Shrieves, 100 Md.App. at 296-97 , 641 A.2d 899 (citations omitted).

For the purposes of judicial review, therefore, the individual qualifications of the presiding ALJ should not be a subject of inquiry by the reviewing court. 10 II. Goals of the CPA The goal of Maryland’s Consumer Protection Act is to “set certain minimum statewide standards for the protection of consumers across the State.” § 13-102(b)(l); see also Morris v. Osmose Wood Preserving, 340 Md. 519, 536-37 , 667 A.2d 624 (1995); CitaraManis v. Hallowell, 328 Md. 142, 150 , 613 A.2d 964 (1992). In enacting this legislation, the General Assembly concluded that it should take strong protective and preventive steps to investigate unlawful consumer practices, to assist the public in obtaining relief from these practices, and to prevent these ²⁷ practices from occurring in Maryland. It is the purpose of [the Consumer Protection Act] to accomplish these ends and thereby maintain the health and welfare of the citizens of the State. § 13 — 102(b)(3).

The CPA is to be “construed and applied liberally to promote its purpose.” § 13-105.

III

Consumer Protection under the FTC Act The CPA provides that, in interpreting its meaning, “due consideration and weight” must be given to the Federal Trade Commission’s interpretations and judicial interpretations of section 5(a)(1) of the FTC Act, codified at 15 U.S.C. section 45 (a)(1). 11 § 13-105. The FTC treats “unfair” and “deceptive” trade practices separately, and requires different elements to be met prior to the Commission’s taking action to prohibit these activities. See American Fin. Servs.

Ass’n v. FTC, 767 F.2d 957 , 971 n. 15 (D.C.Cir.1985). A. Deception Under the “total impression” test, “ ‘[T]he tendency of the advertising to deceive must be judged by viewing it as a whole, without emphasizing isolated words or phrases apart from their context.’ ” American Home Prods. Corp. v. FTC, 695 F.2d 681, 687 (3d Cir.1982) (alteration in original) (quoting Beneficial Corp. v. FTC, 542 F.2d 611, 617 (3d Cir.1976)). “The impression created by the advertising, not its literal truth or falsity, is the desideratum.... ” Id. Prior to the acknowledgment of the new “reasonable person” standard in 1983, the FTC’s reference point was the ordinary purchaser, in whose “intellectual acuity” the law had “very little faith.” FTC v. Sterling Drug, Inc., 317 F.2d 669, 674 (2d Cir.1963).

In 1983, the FTC delivered a policy statement, at the request of Congress, that refined the “deception” standard. ²⁸ See Letter from Federal Trade Commission to Representative John D. Dingell (Oct. 14, 1983), reprinted in Deception: FTC Oversight: Hearings Before the Subcomm. on Oversight and Investigations of the House Comm, on Energy and Commerce, 98th Cong., 2nd Sess. 183-210 (1984) [hereinafter 1983 Policy Statement with page references to Deception: FTC Oversight ]. The total impression test still forms the basis of the deception standard, id. at 184 n. 4 (discussing the “overall impression” created by a representation), but the FTC supplemented the test with additional requirements. Under the standard elucidated in 1983, deception requires not only a representation or omission that is likely to