Putting consumers first

Budgets inform decision-making (keep awake, dear reader, it gets better.)

The budget adage applies just as much to the public sector as the private. Public interest erodes whenever consumer protection gets reined in (even a slight bit) to avoid putting Washington taxpayers on the hook.

Since the inception of Washington’s Consumer Protection Act in 1961, the state Attorney General’s Office has been liable for attorneys’ fees when a judgment in a government enforcement action doesn’t swing its way. The policy makes public-interest sense in suits deemed frivolous or involving small businesses. But what about enforcement with the big dogs?

That’s the conundrum — Washington’s institutional disincentive to tackle certain complaints against deep-pocketed defendants who’ve racked up exorbitant legal fees.

Washington is one of only two states in the country that shove the burden on taxpayers. It makes for an unacceptable liability, influencing the nature of what consumer cases to pursue.

The AG’s office still goes after the big dogs that engage in deceptive or unfair practices, but it sometimes tip-toes from large suits when there’s a slight risk of losing.

Push the envelope with a big corporation that might be defrauding Washington consumers? The answer should be yes, but the reality is an ambiguous, “on-the-the-other-hand” maybe.

One of the more galling illustrations is the 2006 case of State v. Pacific Health Center, Inc.

The case appeared to be a slam dunk: A physician was practicing medicine without a license. Not surprisingly, the state won in trial. Then the Appeals Court determined that practicing medicine without a license didn’t meet the technical definition of consumer fraud. As the Attorney General’s Office notes, is was a technical victory on a sole claim by a defendant.

As a result, the state (read: Washington taxpayers) got stuck with the bogus doctor’s attorneys’ fees to the tune of $420,000.

Then-Attorney General Rob McKenna had had enough and resolved to curtail the state’s liability. McKenna’s 2011 agency-request legislation would have aligned Washington law with 48 other states. Not surprisingly, big business interests hold sway in Olympia, and the bill was deep-sixed. It was a major disappointment for the AG’s talented consumer protection division.

In 2014, AG Bob Ferguson is revisiting the question with his own request legislation.

“Unlike virtually every other state, Washington’s current law puts tax dollars at risk,” Ferguson said. “My proposed legislation will level the playing field for consumers by removing the requirement that the state pay attorneys’ fees.”

The litmus test of any law is whether it’s in the public interest. This couldn’t be clearer.

In 2014, legislators need to put consumers first.

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