Show vow OF USINES FTC improvements threaten business consumer By Richard L L. L Lesher Pres Chamber of 01 Commerce of 01 the United States Stales Many of the government regulations under which business labors are arc subject to differing interpretation That Thatis is they're hard to understand A rule will often appear to mean one thing to Congress which passed the law delegating the rule rule making making power another thing to the regulatory agency which wrote it something else to the business manager who has to com ij J firth Ith it and still another t t t. tg ig tg to the court which eventually hears an appeal on it Consequently the process of clarifying the meaning of ot new rules roles or new interpretations of old rules roles provides a lot of business for lawyers and eats cats catsup up a lot of time and money It is not an ideal system but it works after a fashion As long longas as the regulators are conscientiously conscientiously conscientiously con con- trying to serve the public interest rather than indulging a desire to harass business the costs to society remain within bounds But suppose a new player enters the game Suppose any citizen gains the right to sue any business for violation of any anyone one of the thousands thousands' of obscure government rules roles And further suppose the vigilante is empowered empowered empowered em em- powered to collect damages not only for himself but for everyone who has allegedly been harmed by the violation of the rule If three million consumers can be shown to have suffered damages of 1 each that's 3 million in damages Of course no individual victor in this hypothetical case would recover more than 3 But the lawyer acting for all of these affected consumers called a class could make a bundle And the company concerned would have to spend a bundle defending Itself whether it won or lost last Confronted Confronted Confronted Con Con- fronted with such a win no-win situation many companies will choose to settle out of court even when they arent aren't guilty of anything Such sui suits called class actions actions- are possible now but there are certain legal fors formalities for Cor that discourage abuse buse of the system to harass a business or enrich an attorney of the chasing ambulance-chasing variety Unfortunately the Federal Trade Commission wants to eliminate these legal safeguards and make class action suits easier The Commission Commission Com Com- mission is asking Congress for legislation which would lead to toan toan toan an avalanche of real al cases like the hypothetical one I have just described The bill is called the FTC Improvements Act in the House getting an appealing title on your bill is half the battle in Washington In more formal terms this legislation is known as HR in the House and in the Senate The two bills differ slightly b but t have the same general aim ABOUT NOW youre you're probably wondering why some shady operator who's been ripping off the consumer shouldn't be a legitimate target for any incensed citizen Well he should be But there is already sufficient legal power to go after the shag shaa operators What I fear about the FTC proposal is that it would actually actually actually ac ac- ac- ac cre create te a new class of shady those operator-those who rip off legitimate businesses by filing frivolous suits against them hoping to blackmail the business into a fat out-of-court out settlement It is not difficult to find grounds for accusing an honest company of violating one rule or another because the rules are often oCten so complex that no one understands precisely what obeying them means Let me give you a real example of the kind of situation Im I'm talking about According to the Conference Board the FTC has accused Borden Inc of having monopoly power over the market for reconstituted lemon juice because Bordens Borden's brand accounted for percent of such juice sold in 1974 down from percent in 1969 Borden replies 1 that it docs does indeed have competition and the competition is gaining as the figures show and 2 that fresh lemon juice competes with reconstituted lemon juice and Borden has only 87 percent of the market for all lemon juice however derived Does a company in Bordens Borden's position deserve to have to pay damages to everyone who has ever bought one of its products Should some clever lawyer have the right to make a quick fortune by collecting a fee based on a percentage of such damages Can all consumers- consumers as a class-afford class to pay the increased costs of doing business that such suits would generate These are the real issues underlying the FTC's push to tomake tomake tomake make class action suits easier You be the judge |