Members of the Baltimore City Council voted Monday to approve a bill that would give the city’s law department the authority to take action against businesses that violate consumer protections.
The ordinance — which covers unfair, abusive or deceptive trade practices involving goods, realty and services purchased and sold in the city — also enables the law department to impose and collect fines for civil penalties, according to a draft of the legislation. It applies to businesses offering consumer debt collection and credit extension; those offering course credit and educational services; and those offering to purchase a consumer good or real estate property by a merchant whose business involves paying off consumer debt, according to a draft of the bill.
Those who violate the ordinance will face a civil penalty of $1,000 a day, according to the draft, with each violation considered a separate offense. The violation carries with it a misdemeanor charge.
“This holds paramount importance for our city, especially given its potential to rule out unfair practices,” said acting City Solicitor Ebony Thompson, who testified in favor of the ordinance earlier this month. “This bill is not anti-business; it is anti-deception. It is an additional tool to hold bad actors responsible.”
Thompson cited three “key reasons” to vote the bill through.
- First, Thompson said that while a longstanding consumer protection ordinance on the books gives the law department authority to litigate instances of “false advertising,” it does not enable the agency to seize upon the full range of options afforded to it by Maryland law. The current law also limits the law department’s jurisdiction to consumer protection violations that directly affect the city itself, but not to individuals who live there.
- Second, Thompson said the city’s current ordinance has resulted in numerous “missed opportunities” for the city to generate more revenue. For example, Washington, D.C., has successfully fined Instacart and DoorDash for engaging in deceptive practices against local consumers for more than $4.5 million combined and won $4 million in a case against ghost gun kit manufacturer Polymer80 — an opportunity Baltimore lost out on due to it not being able to request fines for consumer protection violations.
- And lastly, Thompson said the strengthened ordinance would discourage future “bad actors” from engaging in deceptive, harmful or abusive conduct and allow the city law department to pursue injunctions against companies in violation.
City Councilman Isaac “Yitzy” Schleifer, chair of the Rules and Legislative Oversight Committee, sponsored the bill. Some of the current bill’s language previously was included in another bill put forward earlier this year by City Councilman Ryan Dorsey, whose ordinance included creating a Department of Business Licensing and Consumer Protection. But Dorsey’s bill has not advanced out of committee.
Schleifer, during Monday’s hearing, said the law department has made clear that it intends to use the broadened authority to pursue “widespread” problems that affect or endanger many residents, such as ghost gun kit manufacturers. It would not, however, take action against “individual, one-off situations” such as singular landlord and tenant disputes.
Still, representatives from the Maryland Multi-Housing Association and Regional Management, Inc., a property management firm, testified in opposition. Both argued the ordinance could have devastating financial ramifications on their work.
“We just don’t believe it’s business friendly,” said Aaron Greenfield, director of government affairs for the Maryland Multi-Housing Association, which reports representing 67 companies with 38,000 units in Baltimore. “This is a serious, serious bill that warrants incredible discussion.”
Greenfield said during testimony that a provision should be written into the bill that mandates the solicitor’s office provide notice and seek mediation first before moving to “swiftly litigate” consumer protection violators. And Kathy Kelly-Howard, general counsel for Regional Management, Inc., asked that an amendment be added that specifically excludes rental housing providers from action.
“I know the motives of the city solicitor are good. It’s the Grubhubs, the DoorDashes, the Polymers of the world she wants to go after with a fist,” added D. Robert Enten, a Gordon Feinblatt attorney whose clients include the Maryland Bankers Association and CareFirst. “I represent people who have legitimate businesses and operate in the city, and they just want to make sure they don’t have something on the books that could destroy them.”
City Councilman James Torrence said he felt those concerns went beyond what the ordinance proposed. “I’m going to go full Scalia on you,” he told Enten, a reference to former U.S. Supreme Court Justice Antonin Scalia, who is well known for his “originalist” interpretation of the U.S. Constitution. “We would need multiple litigants we would need to trace it back to. Which means, there was a harm to the entire city, and not just one person.”
For example, Torrence said, a landlord who refuses to respond to citations levied on his or her properties might not meet the bar. But one that discriminates against people of color or people who use government vouchers to access housing might be pursued for unfair practices, Torrence said.
And City Councilwoman Odette Ramos said the Maryland Office of the Attorney General, which has its own consumer protection statute, has a higher bar to meet when pursuing violations. Having a city-specific statute would clear some of the burden on the attorney general, she said, which might not be inclined to take on city-specific cases.
Responding to the concerns, Tom Webb, chief solicitor at the law department, said it is not unusual to assess financial penalties by the day in certain instances, and there would be discretion about what types of penalties to assess. And Schleifer said the city aligned this bill closely to the existing state statute governing consumer protection, and it doesn’t have the authority to make the statute more lenient.
Later Monday, the ordinance passed second and third reading with the full City Council. Schleifer clarified that the updated version of the bill had been stripped of jail time penalties. The bill now heads to Mayor Brandon Scott for his signature or veto.
This story has been updated with the correct spellings of D. Robert Enten’s and former U.S. Supreme Court Justice Antonin Scalia’s names.