Expanding Local Enforcement of State and Federal Consumer Protection Laws

Article excerpt


This Article calls on Congress and the state legislatures to grant large cities and counties standing to enforce the Federal Trade Commission Act (the FTC Act) and its state statutory counterparts (or little Acts). The FTC Act, a federal law, prohibits businesses from engaging in any "unlawful, "unfair," or "deceptive" acts or practices, and the little Acts apply similarly broad prohibitions in all fifty states. This fifty-one-statute consumer protection regime--which has been the law of the land for several decades--carries enormous promise to halt a wide range of unlawful and harmful corporate practices in their earliest stages. Unfortunately, that promise has not been fulfilled because these laws are chronically under-enforced. At present, only one federal agency--the Federal Trade Commission--has broad standing to enforce the FTC Act; while state Attorneys General and consumers typically have standing to enforce the little Acts, they cannot keep up with the rate of corporate malfeasance. This Article argues that the nation's legislatures should invite cities and counties with populations over 50,000 into consumer protection enforcement by granting them standing to seek injunctive relief and penalties under the FTC Act and little Acts. It addresses the practical benefits and barriers to disaggregating consumer protection enforcement in this way and discusses the attendant localism and federalism concerns.


  I. The Current Consumer Protection Enforcement Regime and
       Its Limitations
      A. The FTC Act
      B. The Little Acts
      C. Barriers to Local Legislation
      D. Barriers to Private Enforcement Actions
      E. Why Consider Local (Rather than Additional State or
         Federal) Consumer Protection Enforcement?
 II. Expanding Local Enforcement of State and Federal
     Consumer Protection Laws
     A. Municipal Right of Action Under FTC Act
     B. Municipal Right of Action Under the Little Acts
     C. Practical Barriers to Local Consumer Protection
        1. Politics
        2. Money
        3. Culture
        4. Sophistication
III. Theoretical Concerns Disaggregation Raises
     A. Localism Concerns: What About Local Autonomy?
     B. Federalism Concerns: Uniformity, Over-Enforcement,
        and Parochialism


The nation's consumer protection regime is broken. (1) The problem is not a lack of good law: federal and state legislatures have enacted far-reaching consumer protection statutes, most notably the expansive Federal Trade Commission Act (the FTC Act or the Act) (2) and its state statutory counterparts (the little Acts). (3) The problem is that due to insufficient funding and staffing, (4) industry capture, (5) or some combination of both, (6) these potentially powerful bodies of consumer protection law are woefully under-enforced. (7)

At present, the FTC Act is enforced almost exclusively by the FTC itself. (8) The Act does not provide for a private right of action or public rights of action by state or local governments (unlike, for example, the Clean Air Act). (9) Furthermore, among the fifty little Acts, only seven permit city and county enforcement, (10) and only eleven permit district attorney enforcement. (11) This paper calls for Congress and the state legislatures to extend consumer protection enforcement standing to cities and counties with populations over 50,000. (12)

For several decades, scholars and policy experts have pointed out the enormous gaps in consumer protection enforcement, and called for a more effective approach. Nearly half a century ago, Ralph Nader's book Unsafe at Any Speed spurred broad efforts to protect consumers. (13) Ten years after Mr. Nader published his book, Ann Marie Tracey pointed out that "[c]onsumer laws are not self-executing," and called for local criminal prosecution of consumer rights violations. …


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.