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Missouri Chamber advocates bill to rein in junk lawsuits under MMPA

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Every time you fill up your tank, a portion of your bill is going into the pockets of trial attorneys. Gas companies have become a target for class action lawyers who claim that fill-ups with higher octane gasoline are somehow fraudulently diluted because a few drops from a previous lower-octane purchase might linger in a single-hose pump. It may sound absurd, yet similar lawsuits are brought forth every year through the Missouri Merchandising Practices Act (MMPA) – class action suits that seek millions from merchants who incur significant litigation costs to defend against the frivolous suits.  Missouri consumers ultimately pay the price in the form of increased costs of goods and services.

“A law that was created to protect consumers, the MMPA is now more commonly being used against consumers to make trial attorneys rich,” said Missouri Chamber general counsel Brian Bunten. “At the same time, lax laws encourage increased, litigation which overburdens taxpayers who must fund our civil courts.”

Sen. Ron Richard is working to reform the MMPA. He has introduced Senate Bills 792 and 793, which would take the law back to its intended consumer-protection mission. The Senate Committee on Small Business, Insurance and Industry heard testimony on the SB 792 and 793.  Bunten testified in support of the legislation on behalf of Missouri Chamber members, who know the costs of frivolous lawsuits all too well.

The legislation now awaits a vote by the committee to clear it for full debate.

Until 1967, Missouri consumers who were victims of fraudulent or deceptive practices in commercial transactions could only seek redress under private legal remedies available under the common law of Missouri. In 1967, the Missouri General Assembly passed the Missouri Merchandising Practices Act, which contained only 14 sections of broad language to provide protections.

Amendments to the MMPA in the 1970s began to erode the law, including adding a private right of action, which allows personal injury lawyers to recruit supposedly defrauded clients for consumer lawsuits. Additional amendments opened the door for private lawsuits to seek punitive damages, attorneys’ fees, and monstrous class actions.  A 1985 amendment further broadened the scope by declaring that consumer lawsuits could target allegedly unlawful practices outside Missouri if a Missouri consumer was affected. According to a study by Northwestern University, this change to the MMPA resulted in an astonishing 678 percent rise in reported decisions of consumer fraud claims from 2000 to 2009.

Among the Missouri suits that have caused the sharp increase:

  • A class action was brought against a Bridgestone tire shop for a “shop supplies fee” of $1.20 that, although it was properly included on the itemized initial estimate and final invoice, was allegedly deceptive because its name didn’t indicate that the fee covered both costs and profits.
  • A class action brought by customers of an internet service provider who claimed that a “free” upgraded internet service didn’t deliver the speeds promised.
  • A class action brought by a Home Depot customer six years after renting a piece equipment, claiming that a $2.50 optional damage fee waiver was “automatically” imposed.

For more information on this issue, you can contact Bunten at bbunten@mochamber.com, or by phone at 573.634.3511.

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