GOVERNMENT agencies are risk averse, and, for the most part, should be. The Legislature writes law and sets budgets. Agencies should color within the lines.
One exception should be made for consumer protection. The state attorney general is the people’s watchdog for fraud and consumer abuse in the private sector, with targets small and large (including the 2012 national mortgage fraud settlement providing $1.2 billion to state homeowners). Consumers need a vigorous protector.
But the attorney general’s office is hindered in this important work by an antiquated provision of the state Consumer Protection Act. If the state loses a case at trial, it must pay the defendant’s attorney fees. It’s happened just once recently — a $420,000 payout to a doctor who, despite practicing without a license, won on a technicality during appeal.
But the provision nonetheless has a “chilling effect,” according to 2011 testimony by the attorney general’s consumer protection chief. The attorney general needs to enter trial without the fear of a big financial penalty lurking over his or her shoulder.
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The state Legislature should strip this provision from law. Former Attorney General Rob McKenna made that request, with Senate Bill 5079 in 2011, but the Legislature folded under intense lobbying from business. Current Attorney General Bob Ferguson is renewing the request for the 2014 session. Expect more vice-grip lobbying this year.
Washington is one of only two states with such a provision. Even within Washington, private citizens who lose consumer protection lawsuits aren’t required to pay attorney fees. It makes no sense to put that burden on state enforcers of the Consumer Protection Act.
Business groups that portray this idea as a socialist jobs-killer need to get a wider perspective. The attorney general’s consumer protection division has 11 attorneys. Careful case selection, as well as an emphasis on negotiated settlement, resulted in just 30 legal actions being filed last year.
The state’s power to police abusive business practices is a core function of government. The Legislature needs to give consumer-protection attorneys the power to do their jobs, without looking over their shoulders as they enter the courtroom.