ATRA CONDEMNS MULTIMILLION-DOLLAR 'PANTSUIT' AS 'OUTRAGEOUS MANIPULATION' OF D.C.'S CONSUMER PROTECTION LAW

Says Small Business Owners are Targeted by such Litigation

Washington, DC, July 24, 2007 -- – Wearing a bright green protest button, American Tort Reform Association president Sherman “Tiger” Joyce this evening joined small business advocates in denouncing the now notorious multimillion-dollar lawsuit, Pearson v. Chung, brought by an administrative law judge against a local dry cleaner in connection with a misplaced pair of suit pants.

Joyce spoke at a fundraising reception, co-hosted by ATRA and the U.S. Chamber of Commerce Institute for Legal Reform, benefiting the defendants, Jin and Soo Chung, the owners of Customs Cleaners in Northeast Washington, D.C.

“Even though the trial judge last month ruled overwhelmingly in favor of the defendants, the stubborn plaintiff is expected to appeal,” an incredulous Joyce explained. “So this two-year legal nightmare that rudely interrupted the Chungs’ American Dream continues to cost them a small fortune in legal bills and business losses.

“Tonight’s fundraiser is, primarily, an effort to offset some of those losses,” he continued, “but it’s also an opportunity to speak out on behalf of small business owners just like the Chungs who are regularly targeted by personal injury lawyers because, unlike large companies, they often don’t have the resources to defend themselves.”

Noting that the Chungs were sued under D.C.’s Consumer Protection and Procedures Act, Joyce added, “State consumer protection laws are particularly attractive to plaintiffs’ lawyers because they usually provide for minimum statutory damages or the tripling of actual damages, and for an award of attorneys’ fees. Some judges also have begun interpreting these laws rather loosely, wherein plaintiffs don’t even need to claim an injury or loss, much less knowledge of or reliance on the allegedly ‘unfair or deceptive’ commercial practice.

“If D.C. Mayor Adrian Fenty, Council Chair Vincent Gray and other City Council members want to limit such outrageous manipulation of the city’s well intentioned consumer protection law in the future and thus make it easier for honest, hardworking small business owners to thrive, they can legislate some simple changes.

“By requiring plaintiffs to prove that they actually relied on a supposedly fraudulent or deceptive advertisement or representation, lawmakers could drastically reduce this kind of lawsuit abuse. After all, Roy Pearson’s claim against Custom Cleaners alleged that the display of a basic ‘Satisfaction Guaranteed’ sign somehow constituted a willful fraud punishable by a mind-boggling, potentially bankrupting civil damages award.

“Policymakers also would do well to limit plaintiffs’ claims for damages to out-of-pocket costs, except in cases when it can be proved that a defendant’s actions were knowingly and willfully fraudulent or deceptive. If Pearson had simply limited his claim against the Chungs to the cost of a new suit, alterations and any reasonable legal expenses, we wouldn’t be here right now and this case wouldn’t have become internationally infamous,” Joyce concluded.

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The American Tort Reform Association (ATRA) is the only national organization dedicated exclusively to tort and liability reform through public education and the enactment of legislation. ATRA's membership includes non profits, small and large companies, as well as state and national trade, business, and professional associations.