What does a box of candy have in common with the duck boat accident that took place in Branson, Missouri? Ostensibly, one might be oblivious to the similarity; however, further review reveals more. In July 2018, a duck boat operated by Ride the Ducks sank on Table Rock Lake near Branson, Missouri. In this accident, the duck boat company allegedly conveyed false promises, fraudulent statements, and misrepresentations to its passengers, which resulted in the death of 17 individuals. Similarly, the box of candy had consumers complaining of “slack fill”—insufficiently filled containers of candy—despite the content labeling. From loss of life to missing candy, the complaint is the same: what was advertised to the customer was not true. However, the results of these complaints are quite different. While consequences of these two affairs seem to be at opposite ends of the severity spectrum, Missouri’s consumer protection law runs the full gamut. Through multiple amendments, lenient judicial interpretations, and the statute’s poor guidance, the Missouri Merchandising Practices Act (“MMPA”) has been overstretched to cover matters not originally contemplated by its drafters.
In an effort to better protect its consumers, Missouri lawmakers enacted the MMPA in 1967 to supplement the shortcomings of common law fraud. Originally, it only allowed for the attorney general to bring claims on behalf of the state and only to enjoin unfair or deceptive business practices. However, later amendments authorized private suits, enabled class actions and gave courts discretionary power to assert punitive damages and attorney’s fees. Eventually, any individual, whether Missouri resident or not, could file suit under the MMPA if deceptive or unfair business practices were “in or from the state of Missouri.” While these changes provide better protection for consumers, opponents argue that—in its current state—the MMPA has been hailed from its original intent and transformed into a weapon of mass litigation, heavily arming plaintiff attorneys and consumers alike.
A central argument against the MMPA is that “[i]t has gotten so broad and easy to litigate under.” In Conway v. CitiMortgage, Inc. and Jackson v. Barton, the courts expanded the MMPA to reach third-party debt collectors who were not parties to the original agreement. Additionally, in Hurst v. Nissan North America Inc., the court failed to distinguish mere puffery from fact when it examined a dealership’s statements that an advertised vehicle was “luxury” and “premium.” Correspondingly, as a result of the obvious expansion, lawsuits claiming violation of the MMPA are proliferating—many asserting meritless claims such as salad dressing containing low quality “Extra Virgin Olive Oil,” an internet service provider offering customers a “free” upgrade that did not improve their internet speeds, and a Raisinets’ box that was not sufficiently filled to consumers’ preferences.
Because of the MMPA, among other things, St. Louis, Missouri has been designated a judicial hellhole. A judicial hellhole is where “judges systematically apply laws and court procedures in an unfair and unbalanced manner, generally against defendants in civil lawsuits.” This has produced an abundance of forum-shopping, with plaintiff attorneys from all over the country venturing to Missouri to litigate their claims. Most notably, the recent Johnson & Johnson (“J&J”) talcum powder suits sought venue here. Studies show St. Louis, despite being the 23rd largest media market in the country, is number one for talcum powder lawsuit ads, which assuredly influences the juror pool. Recently, the sixth-largest product defect jury verdict in US history took place in the St. Louis City Circuit Court, which resulted in J&J having to shell out nearly $4.7 billion to 22 women—only five of whom are Missouri residents. Other J&J cases taking place in Missouri were initiated by plaintiffs from states such as Minnesota, Alabama, South Dakota, and many more. It is all too easy under Missouri’s current laws to join out of state plaintiffs with Missouri residents and file claims under the MMPA.
Additionally, the MMPA is a cash cow. Due to the incentives it provides (e.g., attorney’s fees and punitive damages), plaintiff attorneys will attach an MMPA violation to their complaint if they can find a way. According to State Rep. Bruce DeGroot, this poses a huge problem for small businesses. Punitive damages are not covered by insurance policies, so when a small business owner receives a complaint alleging punitive damages, they are practically coerced into settlement. Furthermore, in many of these suits the plaintiff attorneys come out on top, riding the coattails of their client’s injury. However, the costs come full circle as consumers feel the hit of increased prices, lower product quality, lower wages, and lower employment. Taxpayers, too, feel the sting of funding Missouri’s overburdened civil courts. Recently, the U.S. Chamber Institute for Legal Reform reported that, in 2016, the total costs and compensation in the US tort system amounted to $429 billion. Missouri accounted for $7.3 billion of that total. The report furthered an estimated 43% of the U.S. total goes toward the payment of legal fees and other costs, while only 57% goes towards compensating the victims who actually bore the alleged injuries. As a result of all of this, businesses are contemplating leaving Missouri. A report by the Institute for Legal Reform, which accounted for enforcing meaningful venue requirements, trial judges’ impartiality, juries’ fairness, etc., ranks Missouri’s legal climate 49th out of the 50 states. In a similar survey, 85% of senior executives said a state’s legal climate will impact their company’s decision on where to grow and expand. A 2018 report by the Citizens Against Lawsuit Abuse estimates the total current impact of excessive tort costs on the Missouri economy at $1.62 billion in personal income and a loss of 26,548 jobs.
This past legislative session, two bills that could have reigned in the power of the MMPA were lost on the floor. While it is a possibility that the issue could be addressed this session, a similar fate most likely awaits any introduced bills. SB 832 would implement a “reasonable consumer” standard to the MMPA and reign in the relationship between actual damages and attorney’s fees, which would benefit the consumer instead of enriching the filing attorney. In a tort case where a plaintiff is injured outside of Missouri, HB 1578 would limit a non-Missouri resident from joining a plaintiff in any county and require venue to be in the county containing the seat of government. This bill is consistent with the U.S. Supreme Court’s ruling in the Bristol-Myers Squibb decision, which St. Louis judges have been slow to apply. Unfortunately, both bills were traded for other issues such as the gas tax and labor issues, and their sponsors will not pursue their passage.
To remedy the issue, legislators need to genuinely contemplate the inequity the current laws impose on businesses, which in return afflicts Missouri residents. Venue reform is needed to disincentivize forum-shopping from out-of-state plaintiffs. Additionally, Missouri must apply a reasonable consumer standard, which would shift the burden to consumers to show that their reliance upon the “deceptive marketing” was reasonable. Implementing this standard would align Missouri with many other states in an effort to unclog the courts of the many “no injury” suits. Correspondingly, the relationship between damages and attorney’s fees must be reasonable, therefore removing the incentive for attorneys to pad their wallets instead of doing what is truly best for the consumer. Moreover, a heightened standard to plead punitive damages is needed. This would ensure that a business owner would not be obliged to settle unless his or her actions were indeed malicious. Additionally, to combat the talcum powder ads that have inundated the St. Louis media, certain limitations must be placed on these ads to ensure that defendants argue before an unbiased jury. There is no question that it is difficult to alter laws that limit consumer protection; however, legislators must restore proper balance between consumer protection and business interests as a corrective to the current flaws of Missouri’s tort system. As lawmakers contemplate the necessary adjustments to the MMPA, they must consider whether the Act’s underlying rationale is intended for rather significant circumstances such as the above-mentioned duck boat accident, or trivial matters like a mere $2 box of candy.