Federalism and the Rise of State Consumer Protection Law in the United States

The Law and Economics of Federalism, Jonathan Klick, ed., Edward Elgar Publishing, Forthcoming

George Mason Law & Economics Research Paper No. 16-44

22 Pages Posted: 10 Nov 2016  

Joshua D. Wright

George Mason University - Antonin Scalia Law School, Faculty

Date Written: November 9, 2016

Abstract

Starting in the 1960s, individual states began to adopt and enforce Consumer Protection Acts (“CPAs”), the purpose of which was to supplement the FTC’s consumer protection authority to prohibit “unfair or deceptive acts or practices.” By 1981, each state had its own CPA. The proliferation of state CPAs provides a valuable opportunity to observe competitive federalism in action and to observe the potential effects of concurrent state and federal regulation. The purpose of this paper is to understand the role of state CPAs in the consumer protection landscape with an eye toward drawing lessons concerning whether state CPAs manifest the benefits of competitive federalism, embody a failure of this principle, or neither. After describing the dramatic rise and expansion of state CPAs, this paper focuses upon two empirical studies that cast significant doubt upon the failure of jurisdictional competition to constrain the adoption of state CPA features likely to result in net harm to consumers.

Keywords: consumer protection, unfairness, deception, tort reform, economics, jurisdictional competition, federalism, Federal Trade Commission, privacy

JEL Classification: K23

Suggested Citation

Wright, Joshua D., Federalism and the Rise of State Consumer Protection Law in the United States (November 9, 2016). The Law and Economics of Federalism, Jonathan Klick, ed., Edward Elgar Publishing, Forthcoming; George Mason Law & Economics Research Paper No. 16-44. Available at SSRN: https://ssrn.com/abstract=2867064

Joshua D. Wright (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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