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Automobile dealers are trying to craft state consumer fraud laws to immunize themselves from suits in several states by what critics claim is a coordinated effort to limit the ability of private lawyers and attorneys general to hold them accountable. Proposed law changes in Virginia, Florida and Ohio would, among other things, limit damages that consumers can seek against dealers and require presuit notice that makes it tougher to litigate. Ira Rheingold, general counsel of the National Association of Consumer Advocates in Washington, claimed that industry lobbyists disguise legislation as consumer protection laws and then sell it to state legislators as tort and class action reform. They also put arbitration clauses in consumer contracts and lobby for federal legislation that pre-empts state statutes, Rheingold said. Game of ‘catch up?’ The National Automobile Dealers’ Association directed questions about state activity to state associations. Michael G. Charapp, outside general counsel to the Virginia Automobile Dealers Association and a principal of Charapp & Weiss, a Tysons Corner, Va., practice that represents dealers, dismissed the notion that organized automobile dealers are trying to insulate themselves from lawsuits. Charapp noted that lawyers representing dealers set up their own organization-the National Association of Dealer Counsel based in Hanover, Md.-less than two years ago to try to catch up with what they see as a well-organized consumer plaintiffs’ bar. Charapp serves on the board of the association. Charapp asserted that dealers continually battle plaintiffs’ lawyers’ mistaken assumption that “when there is any problem in a used car, the dealer knew all and the customer knew nothing.” Thomas Domonoske, a Harrisonburg, Va., consumer lawyer and board member of the National Association of Consumer Advocates, said that the Virginia legislation was recently withdrawn at the last minute by its sponsor, state Senator Thomas K. Norment Jr., a lawyer and automobile dealer. The bill would have immunized auto dealers from consumer fraud lawsuits, Domonoske said. Norment withdrew the bill after it was opposed by the National Association of Consumer Advocates, the Southern Christian Leadership Conference and Richmond, Va.-based CarMax Inc., the country’s largest used car retailer, among others, Domonoske said. Norment promised to bring the bill back next year. He did not return a call seeking comment. The bill, continued to the 2007 legislative session, requires dealers to notify buyers in writing of the buyers’ right to request a prepurchase inspection. Under the proposal, the notification deems the buyer informed of the vehicle’s condition and is conclusive proof that the dealer did not refuse to allow an inspection, shielding the dealer from suit if the car later develops a problem. A new Florida law, which bars suits against dealerships for statutory damages in class actions, passed the Legislature and is awaiting the signature of Governor Jeb Bush. Another bill that lets dealerships recover attorney fees from consumers is not expected to pass, said Robert W. Murphy, who has a solo consumer law practice in Fort Lauderdale, Fla. Ohio automobile dealers currently are trying to convince a state legislative conference committee to attach a controversial provision to a pending predatory lending bill limiting the damages that consumers could seek against dealers, said Laura McDowell of Young & McDowell, a consumer law practice in Akron, Ohio. In October 2003, the Illinois Supreme Court held that amendments to the state’s consumer protection law that favored car dealers were unconstitutional for precisely that purpose, and struck them down. Allen v. Woodfield Chevrolet Inc., 208 Ill. 2d 12. John Cole Gayle Jr. of the Consumer Law Group in Richmond, Va., who represents consumer plaintiffs and has had a hand in drafting state consumer legislation, said that the proposed Virginia legislation, and legislation pending in Florida and Ohio, appear to be “test cases” that industry groups in other states are watching “to see if they’re going to get away with it. “It’s not just a coincidence that similar legislation is pending in Virginia, Ohio and Florida in the same year,” Gayle said.

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