The Dynamic Duo of Consumer Protection: State and Private Enforcement of Unfair and Deceptive Trade Practices Laws

Abstract

This article focuses on the critical importance to consumer protection of the “dynamic duo” of state and private enforcement mechanisms provided in state unfair and deceptive acts or practices (UDAP) statutes. The article begins by chronicling the origins of these state laws, rooted in a cooperative effort between the Federal Trade Commission and state governments in the late 1960’s and early 1970’s. The two goals of the state laws are: (1) expanding consumer protection enforcement out to states and individuals, and (2) providing consumers with more adequate remedies for relatively small individual injuries from marketplace practices. The evolution of more aggressive state attorney general litigation, such as multi-state lawsuits and suits against large companies, led to some federal/state tensions over the years, but mostly the federal and state consumer protection missions have been in harmony. Private enforcement is also evaluated, including the public benefits of individual or class actions as deterrents to future unfair or deceptive practices, as well as the individual benefits to consumers who can obtain meaningful remedies. The article rebuts criticisms of the private right of action for state UDAP laws, but also endorses some limited judicial and legislative reforms that can both leave consumers adequately protected while shielding businesses from unwarranted litigation. The article concludes that both halves of the “dynamic duo,” i.e., state and private enforcement of state UDAP laws, are needed to provide the optimum level of consumer protection. This article has been published at 81 Antitrust Law Journal 911 (2017).

Keywords: consumer protection statutes, unfair trade practices, deceptive trade practices, private right of action, state attorneys general, state UDAP statutes

JEL Classification: K20, K21, K12, K13, K2, K42