There is growing concern that some state attorneys general (AGs) are using Unfair and Deceptive Acts and Practices laws in ways that stray from their intended purpose of protecting consumers. Shook, Hardy & Bacon Public Policy Group Partner Cary Silverman and Pharmaceutical and Medical Device Litigation Of Counsel Jonathan Wilson have published a law review article that identifies problematic trends and proposes solutions.
The article closely examines four areas of concern, documenting examples of each problematic practice. These enforcement actions often:
- are not sparked by consumer complaints, but developed by private lawyers who are then retained by AGs on a contingency-fee basis to pursue the litigation;
- target practices already regulated by government agencies charged with protecting the public, leading to unnecessary, duplicative, and inconsistent regulation;
- seek the maximum civil penalty aggregated “per violation,” resulting in fines that are disproportionate to the alleged misconduct or consumer loss; and
- distribute settlement money to outside organizations and politically popular causes that do not benefit consumers.
In “State Attorney General Enforcement of Unfair or Deceptive Acts and Practices Laws: Emerging Concerns and Solutions,” Silverman and Wilson suggest a combination of modest legislative reforms, principled judicial interpretation of state statutes, increased transparency, and closer protection of due process rights. Their proposals would preserve an AG’s ability to quickly stop deceptive practices, obtain restitution for consumers, and impose penalties on those who willfully violate the law, while addressing the specific problematic enforcement practices.
State Attorney General Enforcement of Unfair or Deceptive Acts and Practices Laws: Emerging Concerns and Solutions, 65 Kan. L. Rev. 209 (2016).