Bill to stop class action suits for deceptive trade practices fails in House | Arkansas Blog

Monday, March 13, 2017

Bill to stop class action suits for deceptive trade practices fails in House

Posted By on Mon, Mar 13, 2017 at 3:50 PM

click to enlarge GRAY: HB 1002 sponsor depicted the bill as a way to keep attorneys from receiving exorbitant fees. - BRIAN CHILSON
  • Brian Chilson
  • GRAY: HB 1002 sponsor depicted the bill as a way to keep attorneys from receiving exorbitant fees.

The House today defeated HB 1002 1742 to curb the ability to file class action lawsuits over deceptive trade practices. The vote was 38-41.

This is the bill that many lawyers see as a means to facilitate payday lending in Arkansas. The usurious lending operations were driven from the state by tough consumer protection action by Attorney General Dustin McDaniel and class action lawsuits over deceptive trade practices.

The lenders are back and Attorney General Leslie Rutledge has refused to act or even issue an opinion about the lenders. This bill would discourage a lawsuit because each lawsuit could only concern a single loan, with a cost to sue far greater than the amount that could be recovered and damages would be limited to actual damage in that single transaction.

Rep. John Walker spoke at length against the bill. "the potential harm is overwhelming," he said. He cited case after case, not just payday lending, but defective and unhealthy products from cigarettes to medicine, in which successful suits were filed "at great cost and great risk.

He urged the House: "Consider the consequences of denying the people the right to get together to support their own circumstances or the community's circumstances when great harm to large groups of people have been done."

Rep. Laurie Rushing, one of the sponsors, said class action lawsuits could be brought under other laws. And she and Rep. Michelle Gray depicted the bill as a way to prevent lawyers from receiving unconscionable attorney fees, while beneficiaries of such lawsuits got small recoveries.

Rep. Doug House ran down a list of dishonest product marketing that would be covered by this act — damaged autos sold as new, for example. He said the law would discourage taking cases to juries and that the attorney general doesn't have the resources to pursue the cases. He noted that the bill would prevent members of public retirement systems who've been defrauded in investments from suing over the acts. "This is a bad bill."

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