COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT Room 400, City Hall Philadelphia, Pennsylvania Tuesday, October 22, 2024 1:15 p.m. PRESENT: COUNCILMAN MARK SQUILLA, CHAIR COUNCILMAN CURTIS JONES, JR., VICE-CHAIR COUNCILMAN MICHAEL DRISCOLL COUNCILWOMAN JAMIE GAUTHIER COUNCILWOMAN KATHERINE GILMORE RICHARDSON COUNCILMAN JEFFREY YOUNG, JR. ALSO PRESENT:
Good afternoon, everyone, and welcome to the hearing of the Committee on Commerce and Economic Development. I note that the hour has come and a quorum of the Committee is present. Mr. McMonagle, please read the roll.
Thank you. A quorum of the Committee is present. The hearing is now called to order. This is a public hearing on the Committee of Commerce and Economic Development regarding Bill 11 No. 240662. Mr. McMonagle, will you please read the title of the bill -- before you read the title of the bill, I recognize Councilmember Gauthier as present.
Bill No. 18 240662, amending Chapter 9-6300 ("Consumer Protection Ordinance") of The Philadelphia Code to clarify the statute of limitations and provide for retroactivity, all under certain terms and conditions.
Thank you, Mr. McMonagle. Will you please call the first panel to testify on Bill No. 4 240662.
Can we please have Lydia Furst. (Witness approached Witness table.)
Good afternoon, Lydia. Just state your name for the record and then proceed with your testimony.
Okay. Lydia Furst. Good afternoon, Chairman Squilla and members of the Committee on Commerce and Economic Development. My name is Lydia Furst and I'm the Chief Deputy City Solicitor of the Affirmative and Special Litigation Unit in the City's Law Department, which represents the City in affirmative public policy litigation and in civil actions. Thank you for your continued support of this important Consumer Protection law and for welcoming me back before you to advocate for this update to the law. As you know, the Consumer Protection law grants the Law Department the authority to directly address deceptive and fraudulent business practices and to obtain tangible relief for those harmed. This new bill would allow the Law Department to address violations of the law that occurred up to six years prior to the date of its implementation, June 5, 2024, and provides for a six-year statute of limitations going forward. Scams and fraudulent business practices can have a lasting impact on consumers. To mitigate the harm experienced by consumers who have been victimized by deceptive business practices, we must have the ability to hold perpetrators accountable to the law. This bill 4 will strengthen our ability to do so. I want to quickly address the significance of the six-year period for retroactive application as it relates to the Consumer Protection law. The period for retroactive action provided by this bill would include the years most affected by the COVID-19 pandemic, a time during which many individuals were experiencing heightened financial and personal stress and navigating an unstable and unpredictable economy. During this time, consumers were more susceptible to and often targeted with frauds and scams. This retroactivity bill will allow us to hold accountable those who took advantage of consumers during this vulnerable time. It also strengthens our ability to protect consumers from deceptive business practices and to remediate past exploitation. Importantly, the retroactive provision will only reach actors whose conduct would also have violated the state Consumer Protection law at the time that it occurred. As a matter of fairness, this means that no one can be charged with violating the City's newer Consumer Protection law if they weren't already on notice that their conduct was unlawful at the time they engaged in the unfair business practice. The only difference is that now the City can help to enforce the law in context where the Commonwealth has failed to act. We are charged with working alongside the City Council and the Parker Administration to promote a secure, equitable and vibrant city, and we believe that implementing this bill 4 will progress our shared vision of economic opportunity for all Philadelphians. The Law Department looks forward to continuing our work to protect Philadelphia from scams and fraud with the authority granted by the Consumer Protection law and we are grateful for your consideration of the proposed bill today. Thanks for your time. I'm happy to take any questions about the law or today's proposed bill.
Thank you. Thank you for your testimony. Also want to recognize the sponsor of the bill, Councilmember Landau who's here. Councilmember Young, you have a question?
Yes, I have a question for the witness. Good afternoon. I guess what's the City's strategy around like a laches defense for bringing something retroactively?
Yeah, that's a good question. Thank you, Councilmember. I think we believe that this retroactivity period is very reasonable and would not expose us to any problems with laches. I mean, it only goes back six years and it only applies to conduct that was already unlawful under the state's Consumer Protection law which has been on the book since the 1960s. And the fact is with consumer protection violations, it often can take many years for the consumer to even realize that they were deceived and to realize that they were harmed by that deception. So we really think this strikes the right balance.
Thank you. And why six years versus seven or some other arbitrary number that are in legal doctrines?
Great question again. Thanks, Councilmember. So part of the goal with the City Consumer Protection law is to really mirror what the state law does so that we're not creating something that is completely different but it rather complements and enhances the state law and the state law has a six-year statute of limitation so that felt like the appropriate number.
Thank you, Councilmember. Any other questions for this witness? (No response.)
Mr. McMonagle, can we please have the next person to testify.
Can we please have Michael Froehlich. (Witness approached Witness table.)
Hey, Mike. Just state your name for the record and then proceed with your testimony.
Good afternoon. Thank you. My name is Michael Froehlich with Community Legal Services. I'm the Managing Attorney of the Homeownership and Consumer Rights Unit. And thank you so much for having me testify today. Thanks to the members of the Committee and to Councilmember Landau for being here today. I'm pleased to testify in support of Bill No. 240662, Councilmember Landau's bill to update the Philadelphia's Consumer Protection ordinance. This bill, as Ms. Furst testified before me, will clarify the statute of limitations for the CPO to ensure that the City's Law Department has the authority to address unfair and deceptive consumer practices that have been committed over the last six years. As the Committee knows, Community Legal Services is a nonprofit law office here in Philadelphia representing low-income Philadelphians on a variety of civil matters, including consumer rights issues. In May we were pleased to come to testify in support of Councilmember Landau's original bill 23 to create the Consumer Protection ordinance. And as I testified then, the CPO will allow the City of Philadelphia to really step into the gap and address the most important consumer issues facing Philadelphia by enacting a CPO that can be enforced by the Law Department. It will hold the bad guys accountable for their actions while leveling the playing field in the marketplace for the good guys. As Ms. Furst further testified earlier, this ordinance 14 will clarify that. Just like the state's unfair trade practices, consumer protection law has a six-year statute of limitation, so does the local CPO. So on behalf of our clients, Community Legal Services strongly supports this ordinance as an important clarification of our existing law. Thank you very much.
Seeing none, Mike, thank you so much for your testimony. Is there anybody else here to testify on Bill No. 240662? (No response.)
Seeing none, thank you, Michael. Thank you for your testimony. Seeing that there's no 14 further questions from members of the Committee and no other witnesses to testify, I'll ask if there's anyone else present in the hearing whose name we have not called that wishes to offer testimony for the bill being considered today? (No response.)
Seeing none, I want to thank all the panels and witnesses for their participation today. We will now go into our public meeting. The Chair recognizes -- before we go into the public meeting, we will take the roll. Mr. McMonagle, please read the names for the people present in today's Committee.
Thank you. A quorum of the Committee is present. Chair recognizes Councilmember Richardson for a motion on Bill No. 240662.
Thank you, Mr. Chairman. I move that Bill No. 19 240662 be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended as to permit first reading of this bill 24 at our next session of Council. (Duly seconded.)
The bill has been moved and properly seconded. Bill No. 240662 will be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended to read this bill at the next session of Council. All those in favor will signify by saying aye. (Aye.)
The ayes have it and the motion carries. That will conclude the business before the Committee on Commerce and Economic Development. Thank you all very much for your attendance. (Committee on Commerce and Economic Development concluded at 1:28 p.m.) C E R T I F I C A T I O N I, hereby certify that the proceedings and evidence noted are contained fully and accurately in the stenographic notes taken by me in the foregoing matter, and that this is a correct transcript of the same. __________________________________ TANEHA CARROLL