Iowa Legislature Approves Consumer Fraud Lawsuits

April 22, 2009

The Iowa Legislature has overwhelmingly approved a measure allowing victims of consumer fraud to file lawsuits to recover damages they’ve suffered.

The measure has been a top priority of Attorney General Tom Miller for nearly two decades. He has noted Iowa is the only state that doesn’t allow such lawsuits.

“It gives the citizens of Iowa the same rights that citizens of 49 other states enjoy,” said Rep. Eric Palmer, D-Oskaloosa, the main backer of the effort.

The House approved the measure April 20 on a 95-1 vote, then the Senate quickly followed suit with a 48-0 vote.

“It’s a day long coming,” said Sen. Keith Kreiman, D-Bloomfield. “It’s a landmark day for consumers in this state.”

Miller has pushed the measure for 19 years without success, and lawmakers have been quietly bargaining a compromise for most of the session.

Under the old law, Iowa consumers haven’t been able to file lawsuits, leaving it to the attorney general to enforce consumer fraud laws. As a practical matter, that means lawsuits get filed only in cases where many consumers claim to have been cheated, said Rep. Kurt Swaim, D-Ottumwa.

Backers of the measure said thousands of Iowans has had little recourse because pursuing those claims would swamp the attorney general’s office.

“It’s been estimated that it would take 40 to 50 additional attorneys in the attorney general’s office to address those complaints,” said Swaim. “The only other alternative is to allow these consumers, if they have a valid claim, it allows them to go to court and pursue their own claim.”

After session-long negotiations, the final version put in place a two-year statute of limitations and would apply only to cases in the future, not retroactively. In addition it would allow a business to claim an honest mistake was made as a defense to avoid charges.

Swaim gave a nod to Miller’s persistence.

“His office has been pursuing this bill for 19 years,” said Swaim. “I’ve been working on it for seven years and I’m getting tired of it.”

The measure now goes to Gov. Chet Culver.

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