There are no ifs ands or buts about it. SB 143 as it came over from the Senate to the House is a MAJOR anti-consumer bill.
SB 143, by Sen. Ed Perlmutter, D-Golden, and Rep. Bill Kaufman, R-Loveland, revises the Colorado Consumer Protection Act. A better description would be REDUCES the consumer act, since no new protections are added, and a lot are removed.
The Consumer Protection Act was passed in 1969, sponsored by Rep. John Fuhr and Sen. Ruth Stockton. For the past thirty years, it has provided for treble damages against anyone who was found to have committed one of the deceptive trade practices set out in the law. SB 143 reduces the damages that can be obtained to actual damages plus no more than $5000 in treble damages, unless the plaintiff can overcome the hurdles of the punitive damages act, CRS 13-21-102.
The treble damages section, according to a state Supreme Court decision in 1992, was intended to serve the purpose of punishment and deterrence and take the place of any additional punitive damages under 13-21-102.
Most of the newspaper articles about SB 143 have focused on the real estate lawsuits against developers brought about by owners of homes built on sliding mountains or on expanding clay soils. If all the bill did was remove treble damages from that type of action, it would be bad, but not as bad as what Sen. Perlmutter actually did.
He removed treble damages from ALL deceptive trade practices listed in the Consumer Protection Act. You may have noticed that there haven't been any recent stories about dance studios getting 85 year old widows to sign lifetime dance contracts for $50,000, or time share con men bilking unsophisticated newlyweds into signing $100,000 contracts for a vacation spot. The reason you haven't seen those stories is the Consumer Protection Act.
Crooks are willing to give up what you caught them with; the $50,000 or the $100,000. But if you bring an action and are awarded $150,000 or $300,000, then they will think twice about practicing their scams in Colorado.
Pushing for the bill, a Denver Rocky Mountain News editorial claimed to quote John Fuhr "who as a member of the General Assembly helped to write the act says it wasn't intended to apply to regulated industries like construction and homebuilding." I don't know if John Fuhr said that, but that is totally wrong. The original law contained the following definition of property in CRS 55-5-1(11), which is now CRS 6-1-102 (8):
"Property means any real or personal property, or both real and personal property, intangible property, or services."
Sending injured consumers over to the punitive damages act, can be a worthless gesture. First, the possibility of treble damages is at the discretion of the court, and second, CRS 13-21-102 (5) states:
"Unless otherwise provided by law, exemplary damages shall not be awarded in administrative or arbitration proceedings, even if the award or decision is enforced or approved in an action commenced in a court."
Real estate developers are already adding that clause to their contracts. And dance studios and time share outfits could easily add that clause to any contract they enter. A Denver Post editorial praising SB 143, failed to mention the loophole cited above.
There are two other anti-consumer problems with SB 143. The bill, as amended, wipes out protection against the door-to-door seller. Present language provides: it is a deceptive trade practice to solicit "door-to-door as a seller, unless the seller, within thirty seconds after beginning the conversation, identifies himself or herself, whom he represents, and the purpose of the call." If the bill passes in its present form, anyone selling door-to-door need NEVER admit his or her true purpose.
The Perlmutter bill also wipes out the authority of the district attorneys to seek temporary restraining orders or injunctions as to anyone believed to be engaged in a deceptive trade practice. Under SB 143, such a temporary order has to come from the attorney general. Having district attorneys use that present power has worked well. If there is a local scam artist, the district attorneys can move swiftly. Having to wait for the attorney general to act will mean more consumers injured before the temporary order is taken to court.
SB 143 passed the Senate 22 to 12, with 10 Democrats and two Republicans, Sen. Anderson and Arnold, voting "no". The same five Democrats (Sens. Dyer, Matsunaka, Perlmutter, Tanner and Weddig) and the same 17 Republicans who voted to end treble damages for consumers, voted "YES" to ADD treble damages at the court's discretion on behalf of real estate brokers in SB 109.
I think I know why Sen. Arnold voted against SB 143. The same real estate cabal pushing the Perlmutter bill earlier killed Sen. Arnold's SB 36. His bill required home builders to "come clean" in plain English to home buyers about swelling soil conditions, and to build the home in a way least likely to cause damage. The payoff would have been a defense to liability under the Consumer Protection Act or the Exemplary Damages Act.
Last year, in a Statesman column, I urged a "good government" bill for 1999 that would take section 6-1-105 of the Consumer Protection Act and divide the nine pages of that one section into separate sections for readability and understanding. SB 143 does that, but as the fortune cookie warns us:
Be careful what you wish for. You might get it.
Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.
Copyright 2012 Jerry Kopel & David Kopel