Members of the Vermont Senate, under pressure from lobbyists, mulled Friday whether a bill designed to protect consumers would violate the U.S. Constitution.
During a Senate Judiciary Committee hearing on a consumer protection bill — which would give courts the power to fine companies that attempt to enforce unfair contract terms — a lobbyist who represents telecommunications giant AT&T argued the current wording in the bill violates the Commerce Clause in the Constitution because of how it would treat the state’s recreation industry.
The proposed bill states it is not meant to “change the way courts allocate responsibility for the inherent risks of any outdoor recreational activity or sport.”
However, Chuck Storrow, a lobbyist for Leonine Public Affairs who represents AT&T, argued the legislation would give Vermont businesses an unfair advantage compared to out-of-state competitors. The state, he said, is bound by the U.S. Constitution to treat in-state businesses no differently than out-of state companies.
Including the legislative intent was an attempt by Senate lawmakers to forestall opposition from the outdoor recreation industry, but the constitutional violation argument made an impression on Sen. Joe Benning, R-Caledonia.
Benning said said exempting the state’s outdoor recreation industry could “open a can of worms” committee members had not considered.
“I don’t want to run afoul of the Constitution and there is a suggestion here that we would be treating Vermont companies differently, and I don’t want to go in that direction if it is going to violate the constitutional provisions,” Benning said.
Storrow added he does not see a need for this type of consumer protection legislation.
“There is not a compelling need for it,” Storrow said, “We are suggesting that the status quo is fine.”
The crux of the argument from industry players is that the bill would open up companies to liability lawsuits without customers needing to prove damage, and that consumers would have Vermont’s six-year statute of limitations under which to make a claim.
Dean Thompson, vice president of Enterprise Rent-A-Car, said companies rely on these contracts to protect themselves from liability and that if this bill were to becomes law, Vermont’s courts would “be flooded with liability cases” — which would hurt business and overwhelm the court system.
These concerns mirror those brought up last session by lobbyists when Vermont’s ski industry joined telecommunications companies to combat a version of this bill that ended with a Gov. Phil Scott veto.
Committee Chairman Sen. Dick Sears, D-Bennington, was accompanied by Sens. Jeanette White, D-Windham, and Phil Baruth, D/P-Chittenden, in wondering if it would be easier to take out the exemption and make ski areas comply with the law.
Baruth said he is not in favor of creating an exemption for the outdoor recreation industry, and said he feels it is simply a tactic by lobbyists to defeat the bill by aligning with an industry economically important to the state.
“These standard contracts are produced at great expense by corporate lawyers all over the world,” Baruth said. “You have that translate into a lot of lobbyists opposing it and I think the recreation industry is a very useful front to push this because it’s local and we all support it.”
“You see a lot of that corporate energy coming in behind the recreation industry because they realize it’s the most local and the one we will pay attention to,” he added.
Sears, who said he harbors no ill-will towards telecommunications companies and owns stock in AT&T, said the opposition from out-of-state industries is expected, but that he believes this bill is important to protect Vermonters.
“I don’t think most Vermonters are aware of some of the terms of the contracts they sign and those unconscionable terms is what this bill seeks to not allow in Vermont,” Sears said. “So one questions why the industry need those terms.”
Sears said he hopes the bill will move out of committee in two weeks, and that he is unconcerned by the specter of another Scott veto.
Baruth said senators believe the legislation will protect Vermonters, and is important to pass and take a stand against corporate interests.
“We need to push back on not only the corporate contracts, but, in effect, the lobbyists that are protecting them,” he said.