Sussex GOP
 
CRI NEWS: Tuesday, February 23, 2021
Center for Analysis of Delaware’s Economy & Government Spending
 
(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 greatly expands the Attorney General’s power and opens the door to 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, 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 very damaging to Delaware.
 
 
BACKGROUND ON CONSUMER FRAUD ACT
 
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 a “55-year-old oversight,” according to the very lengthy synopsis. 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 reads:
 
“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 nine previous Attorney Generals failed to protect Delaware consumers because of an “oversight” five decades ago?
 
The answer to these questions is likely “No.”
 
But then, HB 91 goes even further than simply adding “unfair practice” to existing code, the Bill adds a definition of “unfair practice” that is incredibly broad and, potentially, allows Delaware’s Attorney General to investigate and punish Delaware businesses using the legal codes of “other States.”
 
 
DEFINING UNFAIR PRACTICE
 
 
HB 91 defines “unfair practice” as something that is “offensive to 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 (4) of these States – OklahomaSouth CarolinaCalifornia, 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. Similarly, 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 very specifically 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 anywhere else that specifically empowers the Attorney General to use laws from other states to investigate a Delaware-owned/operated/domiciled business.
 
Lastly, beyond HB 91 expansive definition of “unfair practices,” the Bill’s synopsis also references a Massachusetts activist organization, the National Consumer Law Center (NCLC), whose largest revenue source comes from “Attorney Fee Awards.
 
Evidently, Delaware’s Attorney General used NCLC as a source of content for HB 91. Once again, 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.

Leave a Reply