Pennsylvania Record

Wednesday, October 16, 2019

Is AG Shapiro ignoring the legislature as he tries to change state consumer protection law?

Attorneys & Judges

By Nicholas Malfitano | Sep 13, 2019


HARRISBURG – Pennsylvania Attorney General Josh Shapiro wants to add standards to a state consumer protection law, but lawmakers are concerned he is usurping their authority by doing so. 

Late last month, Shapiro and his Public Protection Division announced their intention to add the regulations of Chapter 311 under 37 Pa. Code, which govern unfair market trade practices.

“The purpose of this rulemaking is to define and clarify certain terms under the Unfair Trade Practices and Consumer Protection Law (UTPCPL) in line with state and federal case law. The proposed regulation defines certain anti-competitive conduct as unfair methods of competition and unfair or deceptive acts or practices,” Chief Deputy Attorney General Tracy Wertz said in documents associated with the proposal.

“The rulemaking provides for the coordination of releasing claims between the Attorney General and private class litigants. The rulemaking also delegates responsibilities under The Administrative Code of 1929.”

Under the current version of the UTPCPL, it contains definitions of what qualifies as “unfair methods of competition” and “unfair or deceptive acts or practices," and details 21 types of acts that fall within those definitions.

Critics contend the proposal is a backdoor attempt to create a state anti-trust statute, an act they believe is outside the authority of the Attorney General’s Office – while others are concerned that the proposed rule additions may be a unilateral move that bypasses the regular legislative process.

Pennsylvania Senate President Pro Tempore Joseph Scarnati issued a statement on the proposal.

“The Senate is currently engaged in conversations with experts on this subject matter, to determine if the Attorney General’s proposed changes without legislative input are outside the scope of proper regulatory oversight. Our government is made up of equal branches and it is crucial that each branch adhere to their defined roles, which are in place in order to create a strong balance,” Scarnati said.

Wertz maintained the proposed rule is both comparable to ones in other states, and necessary to provide clear guidance to market participants and consumers on the scope of the UTPCPL covering all unfair and deceptive acts or practices in trade or commerce, make the state law synchronous with the Federal Trade Commission Act upon which it is based and clarify that the standing provision of the private right of action does not limit the scope of trade and commerce regulated by the Pennsylvania Attorney General.

“This proposed rulemaking is in the public interest to expressly enumerate additional methods, acts or practices in violation of the UTPCPL, which would serve to lower the hurdle for consumers to access justice which would otherwise require proving a violation of the so-called catch-all provision,” Wertz said.

“Small businesses would also benefit from regulation of unfair market trade practices which would promote free and fair competition across all markets within the Commonwealth.”

Wertz added that the Attorney General’s Office “considered the status quo and determined that the clear articulation of the proposed unfair trade practices regulation is the least burdensome acceptable alternative” and the proposed rulemaking will “provide clarity to the public and facilitate compliance with the regulation.” If approved, it would be subject to annual review.

In response to Scarnati’s statement, both Wertz and a spokesperson for Attorney General Josh Shapiro were not able to be reached for comment.

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com

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