JEFFERSON CITY — The senator from Columbia illustrated his bill with a used car and a candy bar.
Sen. Caleb Rowden said during a committee hearing Tuesday morning that, under his bill, consumers could still sue a car dealer for lying about having installed a new transmission but would not be able to sue a company for mislabeling the amount of sugar in a candy bar.
“The person did not buy the candy bar because of the fact that the wrapper said that it had 8 grams of sugar,” Rowden said. “They bought the candy bar because they were hungry.”
Senate Bill 276, which he sponsored, would set up a “reliance standard,” which means plaintiffs must prove that the unlawful act of the companies they are suing misled them into the purchases, resulting in damages. Consumers who can’t prove such causation might find their cases dismissed.
Consumers would also have to show they acted reasonably during the transaction and provide enough evidence for the damages to be calculated. The amount of recoverable damage would be determined by the plaintiff’s “out-of-pocket loss,” which the bill defined as the difference between what the consumer paid and what the market value of the product or service actually is.
The bill would also exclude lawsuits on personal injury and death from being filed under the Missouri Merchandising Practices Act, which Rowden called “overly broad.” He said the current law sets a fairly low bar for consumers to bring lawsuits forward and that his bill aims to fix the problem.
Proponents of Rowden’s bill said it would prevent frivolous suits and promote a standard that already exists in dozens of other states. Those on the opposite side argued that the bill would likely strip away some consumers’ legal ability to fight against dishonest businesses.
Sen. Tony Luetkemeyer, R-Parkville, spoke in favor of Rowden’s idea and said the burden of proof this bill would put on plaintiffs is a standard commonly applied in tort laws.
“The notion that this would somehow be surprising to any lawyer … is just simply not true,” Luetkemeyer said.
Dana Frese, president of the Missouri Organization of Defense Lawyers, said he sees a “concerning trend” among plaintiff attorneys who, on top of filing tort lawsuits, sue hospitals and physicians under the act, because they can recover fees that way.
Jennifer Artman, on behalf of the American Tort Reform Association, said the number of consumer litigation cases in Missouri rose by 678 percent between 2000 and 2009, which she said made Missouri “the fourth-largest state in terms of consumer litigation nationwide.”
Artman said Rowden’s bill would protect business from suits filed by “unsophisticated consumers” and prevent abuse of the current law.
Some plaintiffs, for example, claim they are misled as to what’s in the food even though a list of ingredients is printed on the wrapper, Artman said. “A reasonable consumer would know to pick up the package and turn it over and read the ingredient list.”
Sen. Brian Williams, D-St. Louis, worried that the bill would burden some plaintiffs. He said groups such as seniors, people with disabilities or those who can’t afford an attorney, which might count as “unsophisticated consumers,” should be taken into consideration.
“I know for a fact that the law … doesn’t take in that thoughtfulness around the fact that everyone is different, and then there may be (people) that may not fall within that scope of reading 50 or 60 pages of their mortgage,” Williams said. “I don’t know about you guys, but unsophisticated people matter to me as well.”
He said a middle ground is needed to ensure both protection of corporations from frivolous suits and “adequate representation” of those who are unable to defend themselves.
Kansas City attorney Josh Sanders said the bill would not cover cases where harm is induced after, rather than triggered by, the original purchase.
Under the “reliance standard,” Sanders said, cases where car dealers withhold titles or hide defects from consumers would no longer “survive,” because neither action is the cause of the purchase.
Columbia-based attorney Dave Angle spoke against the bill on concerns that it would encourage dishonesty among businesses. He said the Missouri Merchandising Practices Act was enacted in 1967 “as a supplement to common law fraud.”
“The supplement was needed because businesses hold the cards,” Angle said, “and if a business wants to be dishonest, then they are the ones with the information.”
Supervising editor is Mark Horvit.