Consumer “Protection” Racket
D.C. Administrative Law Judge Roy Pearson is suing a Korean drycleaner couple for $65 million for losing his pants and posting signs that say “satisfaction guaranteed” and “same day service.”
(The drycleaners promptly gave him $150 for his pants, then offered him an additional $12,000 after he sued them, and ultimately located and offered to return his pants).
He has a potent weapon for intimidation in the D.C. Consumer Protection Procedures Act (DCPPA). That poorly-written law allows a litigious plaintiff to recover thousands of dollars in statutory damages and attorneys fees even for conduct that caused no economic loss.
So in addition to demanding millions of dollars for his supposed “mental suffering, inconvenience and discomfort,” Pearson also seeks statutory damages of $1,500 for “each day during which the ‘Satisfaction Guaranteed’ sign and another sign promising ‘Same Day Service’ was up in the store — more than 1,200 days.”
The same law, the DCPPA, was also used in the recent lawsuit against KFC orchestrated by the Center for Science in the Public Interest. A judge dismissed that lawsuit, but such litigation remains a serious threat, since the DCPPA provides such extravagant damages that even a lawsuit with a tiny chance of success can intimidate a defendant into paying off the plaintiff to make the suit go away. (Under the plaintiffs’ reading of the DCPPA, everyone in America who ever ate Kentucky Fried Chicken could have claimed statutory damages of at least $1500).
As I explained yesterday, CSPI attacked KFC for using trans fats in frying its chicken, even though it was CSPI that once taught that trans fats were safer than traditional saturated fats.
The Washington Post editorialized today in favor of reforming the DCPPA to prevent shakedowns similar to Pearson’s lawsuit, urging D.C.’s attorney general to pursue such reforms.
But reform is unlikely. Similar consumer “protection” laws are the basis for many of the lawsuits brought by state attorney generals over the past decade. Those lawsuits have extracted billions of dollars from out-of-state business and transferred huge sums to trial lawyers hired by state attorney generals to help bring such lawsuits. (Click here for a look at the nation’s 10 worst state AGs). So D.C.’s attorney general may be tempted to keep the law as sweepingly-broad and draconian as it is now.
Moreover, the D.C. Council regularly ignores the Washington Post’s advice on legal matters. When the Post editorialized against a bill by ex-convict Marion Barry that gave civil-rights protections to ex-convicts, the D.C. Council enacted the bill anyway, by a lopsided 10-to-2 margin.