Sunday, May 03, 2009

Why There Aren't More Consumer Lawyers -
Michigan Supreme Court Guts State Consumer Protection Act

You'd think that a consumer that when you go to a car dealer and buy a certified used car described as a "demo" that it wouldn't be made of the front and back ends of two different wrecked cars welded together. According to this Detroit Free Press article, that was too much for Paulette Day to expect when she paid $20,350 for a 2004 Chevrolet Monte Carlo at Rowan Pontiac GMC. You'd think that if you get such a Frankenstein mobile, you might have a remedy at law against the folks that sell it to you.

Nay, Nay says the Michigan Supreme court. The Michigan Supreme Court has gutted the 1976 Consumer Protection Act by ruling that any company regulated by state or federal law is exempt from the Act. Now new and used car dealers, mortgage brokers, debt collectors can engage in outrageous practices free from liability under the Consumer Protection Act. The practical effect of this is that private attorneys are robbed of the principal tool they could use to get attorney fees payed by the deceptive business. Without a general consumer protection act, an attorney might be able to sue for breach of contract or a common law tort, but any business can successfully ward off such suits by wasting the plaintiff attorney's time and thereby making it uneconomical to pursue the suit.

You'd think that Michigan Governor Jennifer Granholm, a former Attorney General with eyes on higher political office, would be able to lead an effort to get the law strengthened. You'd think.

Michigan lawyers and consumers, you have my sympathy. Indiana's law isn't much better. Indiana's Deceptive Consumer Sales Act has a one year statute of limitations and lots of loopholes.

I found a link to a report compiling a summary of the consumer protection laws of all 50 states. This report, by Carolyn Carter of the National Consumer Law Center is an excellent resource. As it turns out, there are a lot of state laws that have severe flaws. Check out the report to see about your state.

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