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June 29, 2004


Mass.: consumer-suit moneys enrich litigation lobby

Via Mike DeBow (Jun. 28), who just finished guestblogging on Overlawyered: Massachusetts AG Thomas Reilly has been letting private law firms enforce the state's "item pricing" law, which requires stores to stamp prices on individual items and provides for penalties if the computer scan price comes through higher than the sticker price. Many of the private attorneys who've been making large fees on item-pricing suits donate to Reilly's campaign coffers, which is not exactly a shocker. More interesting, the attorneys have been arranging settlements in which -- given that there is no way of identifying most of the consumers victimized by the practice -- the targeted stores (including Walgreen's, Home Depot and Wal-Mart) agree to fork over large sums to consumer organizations which in many cases act as key political allies of trial lawyer interests, including Public Citizen ($50,000), ATLA's Roscoe Pound Institute, and the New England Patients' Rights Group ($100,000 each). Most of the grants "will be used to spur greater awareness of consumer rights." (Bruce Mohl, "Reilly turns to private enforcement of item pricing", Boston Globe, Jun. 27). The practice of allocating "cy pres" moneys to pro-litigation groups has occasionally stirred controversy in other states, such as California, where Consumers Union was one notable beneficiary.

Posted by Walter Olson at 12:07 AM | TrackBack (0)



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Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.