http://biz.yahoo.com/ap/080331/ia_xgr_consumer_fraud.html?.v=1
Iowa's Consumer Fraud Proposal Derailed
Monday March 31, 6:05 pm ET
By Amy Lorentzen, Associated Press Writer
Iowa Attorney General's Consumer Fraud Proposal Derailed Again
DES MOINES, Iowa (AP) -- Attorney General Tom Miller said he's
disappointed that lawmakers have again rejected legislation that would
allow consumers to file a lawsuit under Iowa's anti-fraud act.
Miller said Iowa is the only state where consumers don't have such a
right.
The measure would have given Iowans a "private right of action," or
the ability to sue a business or person under the state's Consumer
Fraud Act, which prohibits unfair and deceptive trade practices. The
consumer could seek damages, attorney fees and costs in a winning
case.
Under Iowa's current law, consumers can pursue a common-law action for
fraud, but Miller said that's unrealistic for many people because they
can't recoup attorney fees and other costs.
"We are disappointed the consumer rights act legislation likely is
dead for this session ... It was a moderate and effective proposal,"
Miller said in a statement.
Officials with his office said they had tried at least a half-dozen
times to pass such protections, and Miller promised he'd try again.
"I think we will find a way to convince the Legislature to provide
this right for consumers," he said.
The bill is considered dead because it failed to meet a legislative
deadline as the session edges toward likely adjournment later this
month. A version of the bill was approved by the House Judiciary
Committee, but it was stripped of its strength and only expressed the
Legislature's intent to protect consumers.
"It got gutted," said Rep. Kraig Paulsen, R-Hiawatha.
Paulsen said Miller's version was overreaching and would have forced
businesses to defend themselves against trivial matters.
"The greater concern is the mom-and-pop shop where it costs you $500
to call your lawyer, let alone to actually go in to court," he said.
Paulsen said a legislative interim committee will study the issue
before the next session.
Miller's move has pitted him against some big industries, including
banking, real estate, health and insurance.
John Gilliland, a vice president for the Iowa Association of Business
and Industry, said Miller has insisted on presenting a bill that has
low standards of legal proof and no requirements to show that the
consumer was actually defrauded before they can file a lawsuit.
"Industry has been very reluctant to sup****t a bill that would just
throw open potentially meritless lawsuits," said Gilliland.
Miller notes that Iowa is the only state without such rights for
consumers, but Gilliland said other states are tightening their
consumer protection statutes because of meritless lawsuits.
Miller has dismissed claims that the measure is anti-business. Last
December he said the legislation "gives a fair shake to consumers, and
to the vast majority of honest businesses who play by the rules, tell
the truth, and treat consumers fairly."
According to lobbyist declaration records, opponents of the measure
included out-of-state giants such as Johnson & Johnson, Wal-Mart
Stores Inc., GlaxoSmithKline, Monsanto Co. and Microsoft Corp. In-
state businesses that opposed it included Casey's General Stores, Hy-
Vee Inc., Principal Financial Group and Meredith Corp.
Sup****ters included the Iowa Trial Lawyers Association, Iowa
Association of Area Agencies on Aging, the League of Women Voters of
Iowa and unions including the United Steel Workers of America, Iowa
Federation of Labor AFL-CIO and AFSCME Iowa Council 61.
Iowa Citizen for Community Improvement noted the many lobbyists
declarations against the bill.
"The voices of three million everyday Iowans are being drowned out by
170 special interests, and I'm not surprised the way the current
system is set up," CCI member Judy Lonning, of Des Moines, said in a
statement.
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