Consumer and Civil Rights Trial Lawyer Discusses Bill Prohibiting Attorney's Fees for 'Technical Violations of the New Jersey Consumer Fraud Act'

The First Nail in the Coffin of Consumer Rights

Assembly Bill 1444, prefiled for introduction for the 2012 session of the New Jersey State Legislature, and sponsored by Assemblyman Reed Gusciora, seeks to amend New Jersey's Consumer Fraud Act to prohibit attorney's fees to plaintiffs who prove what the bill terms as merely "technical violations" of the New Jersey Consumer Fraud Act.

As everyone knows, I am an unapologetic champion of individual rights against corporate rights. I am an unapologetic champion of the rights of working families and individuals against vested interests, whether those interests be government, banking, corporations, insurance, the medical lobby or the neoconservative agenda, generally.

Governor Chris Christie, to give him credit, is an exceptionally canny politician, who has chosen to cast his lot entirely with neoconservative "pro-business" interests. Because corporations are by definition paper creations and are, therefore, soulless and without consciences, this alleviates the people who advocate for corporations from any responsibility for what corporations do, and how they harm. Lawmakers and lobbyists who think that the only thing that matters is corporate profits often feel that one of the easiest ways to accomplish this, especially during "hard" economic times, is by whittling away at the rights of the individual to challenge corporate hegemony and power.

The New Jersey Consumer Fraud Act has existed for many decades as a check and balance against corporate power. Corporations make large amounts of money by cheating large numbers of people out of small dollar figures.

Imagine, for example, a corporation which sells ten million units of a product that costs only $5.00 by fraudulently representing that the product is capable of doing something. In fact, versions of the product from competitors that cannot do the same thing sell for only $4.00. This corporation, however, has decided it wishes to get an edge over its competition and, therefore, charges $5.00 for the product. In order to justify the higher price, they simply lie about its capability, thus cheating ten million people out of only one dollar each; a ten million dollar profit obtained by fraud. Yet because the value of each person's loss is so "insignificant" and because the failure of the product, as driven by its value, is so meaningless, this would be a classic "technical violation" that the above-bill would render unavailing to parties and their attorneys.

Most fraud does not have a significant enough individual economic value that, when a portion of that value is considered, it fairly and adequately justifies an attorney filing suit for the amount of time and risk that they undertake in trying to help the victim. In short, there's no way, without resort to fee shifting anti-fraud law, for a person to have a lawyer recover that money.

Conservative lawmakers and their corporate allies know this well. The way that they "spin" these types of amendments is that it is "pro-business" and deprives "greedy lawyers" of "exploiting" "technical" breaches in the law for their selfish benefit. That is their spin. Here is the true spin.

By slowly whittling away pieces of the Consumer Fraud Act and any other pro-consumer or pro-civil rights statute, which are designed to shift attorney's fees in order to make small violations that mean a great deal hurt for the perpetrators, and by lying to you about why they are doing it and what it really means, the corporations are trying to gradually strip away all your individual liberties and rights and render the courts a corporate playground. They have succeeded in large part over the last 30 years by doing it in bits and pieces, by seizing their opportunities during bad economies, by publicly "spinning" events like this to their disadvantage with their considerably greater resources than individuals and their attorneys have, and by trying to put one over on party faithful and undecideds.

This bill is bad for anyone who is going to get cheated by nefarious contractors, car dealers, businesses, etc. It is going to take away a class of remedies that, right now, you can actually litigate with the assistance of a lawyer, free of any worry that the lawyer's fees are going to be your responsibility. In other words, right now, you can still challenge "technical violations" that cause real harm because the law continues, for the present, to protect that right by "shifting" attorney's fees to the wrongdoer.

If this bill is passed, it will begin to whittle away the rights that the Consumer Fraud Act affords you. Don't listen to the lies of those who apologize for this bill or suggest that the bill is good for business. It is "good for business" in a sense that it gives business something at your expense, and while that may be "good" for certain fraudulent businesses, it is not really good for you, and that makes it not good for the people of New Jersey. What is not good for the people of New Jersey isn't good for New Jersey, and misguided lawmakers need to be told this in no uncertain terms by you.

I am a consumer, civil employment and individual rights trial lawyer, and I am telling you this bill is a bad idea. Take it to the bank because if you don't, the corporations will take your money to the bank.

JOURNEY TO JUSTICE

DISCLAIMER: This web log is not legal advice, nor should it be construed to be legal advice or the offering of legal advice. It should not be read as guaranteeing or suggesting any particular outcome in any Court will occur in any particular case. It is not, and should be read as, a complete or authoritative analysis of the state of law, which is constantly subject to change.

"Journey to Justice" - The Web Log of Civil Rights Trial Lawyer Kevin M. Costello, Esq. (www.costellomains.com).

Corporations Don't Behave Unless You Make Them Behave

A case that began about negligent contamination of rice with genetically modified rice ended with the Supreme Court of the State of Arkansas striking down a legislative "Cap," or limit, on punitive damages. The Cap was approved by the State's General Assembly in 2003, but the Court's Ruling concluded that this Cap conflicted with the State's Constitutional Prohibition on the General Assembly's ability to enact laws limiting the amount Plaintiffs can recover for tortuous acts.

Obviously, the Arkansas State Supreme Court got it right. Any Court that invalidates attempts to usurp the function of a jury gets its right. I can't comment on how the Arkansas State Constitution would read in comparison with that of New Jersey, but I can tell you this: New Jersey has a Cap on punitive damages and as far as I know, there has never been a challenge that the Cap is unconstitutional.

It is, however, unconstitutional. Why?

If you've been reading my Blog for any length of time, you know who I am, what I do and how I feel about the propensity of institutions (such as corporations) to act morally and correctly without a hammer ready to crack them on the skull if they don't. The fact remains that corporations are a paper construct in American Law. They are an abomination before all that is right and proper. They insulate from personal responsibility the directors and employees of the corporation because no matter what wrong they do, they do it "in the name" of the corporations' profit and that alleviates from all moral (and usually legal) responsibility for what they do in pursuit of money.

If we threw CEO's of corporations that went into Bankruptcy in Jail, we'd have fewer Bankruptcies. If we threw CEO's of corporations that made products that harmed or killed, we'd have safer products. But we don't. We think that would be "bad," because somehow, the right of the corporation to strive for profits above all moral, ethical and other considerations is a hallmark of the American economy.

So how do we balance that hallmark in Court?

It starts, and ends, with you, regular people, serving on juries.

Juries have the right to "punish" wrong actors. Just because someone does something negligently doesn't mean the punitive damages happened. They are not allowed to happen when someone only does something "careless." On the other hand, when someone does something recklessly or intentionally to cause harm, especially when they do it in the name of dollars over fairness, morality or fundamental justice, then punitive damages may be awarded by a jury to deter that conduct in the future.

Do you really think that the people responsible for the debacles at AT&T, Enron, Tyco, WorldCom, and other companies would do the right thing simply out of a moral responsibility to do it? Of course not. They do the right thing only when they fear the consequences if they don't.

Punitive damages deliver that fear. They represent a stabilizing influence on what would otherwise be a runaway fascist economy run by corporations without any checks and balances. Just because a corporation is made to compensate someone that they harm doesn't mean that the corporation hasn't profited by the harm. Corporations often do calculations to decide how many people it can harm, how much it will cost in the occasional lawsuit, and how much more profit they will make than that cost. Thus, they decide to do the harm anyway.

Punitive damages make the corporations afraid that there will be an unintended and immeasurable consequence if they do wrong and so they don't do wrong.

Or at least, that is how the theory goes.

At Costello & Mains, we applaud the Arkansas Supreme Court and call upon New Jersey's Legislature to eliminate its Cap or upon the Courts to eliminate the Cap as unconstitutional. I don't know that it will happen, but it ought to, because the power currently, at least for now, and should always, belong to the people who sit on juries, not to the Judges and Legislatures.

That is how we see it.

JOURNEY TO JUSTICE

DISCLAIMER: This web log is not legal advice, nor should it be construed to be legal advice or the offering of legal advice. It should not be read as guaranteeing or suggesting any particular outcome in any Court will occur in any particular case. It is not, and should be read as, a complete or authoritative analysis of the state of law, which is constantly subject to change.

"Journey to Justice" - The Web Log of Civil Rights Trial Lawyer Kevin M. Costello, Esq. (www.costellomains.com).