House Bill 91 would add the words “unfair practice” — loosely defined as “offensive to public policy” — to the state’s existing Consumer Fraud Act. This unnecessary change expands the attorney general’s power and allows open-ended damaging litigation to Delaware businesses.
The attorney general (AG) of the state of Delaware is the second-most powerful elected official in the state. Of course, with the office’s investigatory powers, subpoena powers and prosecutorial powers, one could argue that the attorney general is the most powerful elected official in the state. Any expansion of those powers should be weighed very carefully.
If House Bill 91 passes, it will greatly expand the AG’s powers in Delaware’s consumer-fraud statutes. It is our opinion that the enormous expansion of power granted to the AG by HB 91 would be damaging to Delaware.
In 1965, the Delaware General Assembly passed the Consumer Fraud Act. For the next 55 years, nine Delaware attorneys general — David Buckson, Laird Stabler, Richard Weir, Richard Gebelein, Charles Oberly, Jane Brady, Carl Danberg, Beau Biden and Matt Denn — have protected consumers in our state and, in the process, have made Delaware’s Justice Department a model for other states.
HB 91 is promoted as simply fixing an oversight. According to that synopsis, the original 1965 act omitted the term “unfair practices,” and the 1965 General Assembly is alleged to have intended to include it. There is no evidence provided that the original act suffered from an unintentional oversight, but that is what is alleged.
The existing statute begins: “The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, or the concealment, suppression, or omission of any material fact with the intent that others rely upon such concealment, suppression or omission, in connection with the sale, lease or advertisement of any merchandise, whether or not any person has in fact been misled, deceived or damaged thereby, is an unlawful practice.”
Does this statute really need “unfair practice” added to it to make it stronger?
Isn’t a person using fraud to sell products in Delaware actually conducting an “unfair practice”?
For 55 years, have attorneys general failed to protect Delaware consumers because of an oversight?
The answer to these questions is likely no.
HB 91 goes further than simply adding “unfair practice” to existing code. The bill adds a definition of “unfair practice” that is broad and, potentially allows Delaware’s attorney general to investigate and punish Delaware businesses using legal codes of “other States.”
HB 91 defines “unfair practice” as something that is “offensive to established public policy,” which is not defined anywhere in the bill itself nor in the Delaware Code.
Standing alone, the phrase “unfair practice” is someone’s opinion, unless the practice is specifically defined in the code. Defining it as anything “offensive to public policy” allows an unlimited pathway for the AG’s prosecutors to sue anyone whose act, in their opinion, is “offensive to public policy.”
The synopsis of HB 91 lists “other States” that allegedly have the policy being recommended. A search of the state codes for four of these states — Oklahoma, South Carolina, California and Massachusetts — undercuts the allegation of the synopsis.
For example, South Carolina’s Title 16, Chapter 17 is titled, “Offenses Against Public Policy,” and consists of dozens of sections defining each specific offense — completely dissimilar to HB 91. California’s Business and Professions Code Division 7 General Business Regulations, Part 2 Preservation and Regulation of Competition, Chapter 4 is titled, “Unfair Trade Practices,” and defines violations of state law.
Beyond failing to legitimately define unfair practices, HB 91 goes even further by codifying that Delaware’s attorney general should consider “unfair practice definitions in other United States jurisdictions” for use in enacting this statute.
A quick search of the Delaware Code finds no wording that empowers the attorney general to use laws from other states to investigate a Delaware-owned/operated/domiciled business.
Lastly, beyond HB 91’s expansive definition of “unfair practices,” the bill’s synopsis references a Massachusetts activist organization, the National Consumer Law Center (NCLC), whose largest revenue source, according to our detailed research, comes from “Attorney Fee Awards.”
Evidently, Delaware’s attorney general used NCLC as a source of content for HB 91. There seems no connection between the NCLC and an alleged fraud perpetrated by a Delaware business.
It is a truism that if you give the government power, it will use it.
Charlie Copeland is co-director for the Center for Analysis of Delaware’s Economy & Government Spending at Caesar Rodney Institute.
