Federal legislation could muzzle representative speech, enrich trial lawyers

OPINION:

Here in Washington, an ecosystem of advocacy groups and associations exists to be the voices of those who can’t physically come to Capitol Hill and lobby Congress. These entities play an important role in our representative government. Through grassroots activation, they provide a megaphone for a broad spectrum of interests — from people with chronic diseases to independent restaurateurs — who don’t possess the resources to travel to the nation’s capital. 

Proposed federal legislation threatens to muzzle the speech and reach of these advocates under the guise of advancing online privacy. Any group or business that uses targeted digital advertising, email marketing or online payment processing, or that offers loyalty programs, could be a target.

The American Privacy Rights Act would expose relatively small but passionate advocacy groups to predatory lawsuits. The legislation includes strict rules around how much data can be collected and maintained, website design regulations and due diligence obligations. Under the policy, the plaintiff would not be required to prove harm, opening the door to an avalanche of frivolous legal actions. 

In typical Washington fashion, there’s also a carve-out for the big players. Large tech companies will enjoy the protection of a harm requirement, acting as a de facto liability shield. 

In practice, this proposal will help no one. Big Tech companies will still have the license to pry into the lives of average Americans, continuing to leverage the information to deepen their pockets. Meanwhile, advocacy groups representing the interests of everyone from farmers to small shops in good faith will be working with one hand tied behind their backs. 

Like the cottage industry of trial lawyers that has popped up around other well-intentioned but shortsighted statutes, organizations could be hit with costly lawsuits for violating far-fetched privacy standards.

The Americans with Disabilities Act is a prime example. Passed in 1990, the federal legislation included new business regulations aimed at preventing discriminatory behavior against disabled Americans. Think of the angle of wheelchair ramps, the size of parking spaces or bathroom specifications.

Today, however, the law has primarily become a moneymaking machine for activist attorneys rather than a tool to improve the accessibility of businesses. These legal predators often file garbage suits against defenseless small businesses through loopholes in the law without even setting foot on the property. Since 2013, the number of legal actions under the ADA has increased threefold, with many businesses settling claims to the tune of thousands of dollars just to make the lawyers go away. 

California’s Proposition 65 is another case study of hungry lawyers hijacking public policy for their own benefit. Billed as a law to protect the health of state residents, Prop 65 requires any product with certain chemicals sold in California to don a warning label. Although good in theory, the threshold is so tiny that everything from flip-flops to Christmas lights is required to carry a cancer warning. No one is chewing on sandals.

For nearly 40 years, trial lawyers have taken advantage of Prop 65 to hold businesses hostage — even if the manufacturer isn’t in California but sells to its residents. Since 2000, businesses have paid hundreds of millions of dollars in settlements for allegedly breaching the law, with most of the money going to lawyers.

The American Privacy Rights Act could have a similar chilling effect if passed.

Trial lawyers smell blood in the water and are circling advocacy groups in Washington and small businesses across the country. The passage of the American Privacy Rights Act will give them the green light to attack. 

• Jamey Bowers is an owner and partner at Berman and Co.