Does Google Have a Free-Speech Right to Arrange Its Search Results However It Wants?

Yes, according to Eugene Volokh, who was hired by Google to provide his views on the subject. The antitrust laws, he says, must give way to the First Amendment. Read Volokh's entire paper or the synopsis posted on Volokh's blog.

Andy Pincus on Concepcion (Again)

Andy Pincus, the lawyer who won ATT v. Concepcion in the Supreme Court, has penned this article in the National Law Journal expressing disappointment that arbitration opponents are trying to beat back the effects of Concepcion in Congress and the courts. Earlier, we told you about Pincus's piece in the New York Times defending Concepcion and explaining the supposed benefits of mandatory, pre-dispute arbitration. The National Law Journal piece strikes similar but not identical themes.

 

Taxing Tobacco Use

The enormous public health campaign to curb tobacco use has been long and difficult, and, as a result, a far smaller percentage of the U.S. population smokes today than a few decades ago. But, still, about 20% of the U.S. adult population smokes. Should we do what New Zealand is about to do and raise tobacco taxes to nearly $1 per cigarette on a national basis? Read about it here.

Protectionism, Consumer Welfare, and Rational Basis Review

Robert Barnes at the Washington Post has this great story in today's Washington Post about Louisiana monks who want to sell funeral caskets but have been hit with a cease-and-desist order enforcing a protectionist Louisiana law that says that the only Louisianans permitted to sell "funeral mechandise" in Louisiana are "licensed funeral establishments." A federal district court held that the law is unconstitutional, as applied to the monks' sales of funeral caskets, and the case is now before the U.S. Court of Appeals for the Fifth Circuit in New Orleans. Typically, distinctions drawn by so-called "economic" legislation will survive constitutional challenge if they can be justified by any conceivable rational basis. Here, at least as applied to the sale of caskets, the sole basis for the law -- and it is certainly a rational basis from the funeral industry's perspective(!) -- appears to be protection of an in-state industry. Louisiana claims that the law protects Louisiana consumers from overreaching and that, in helping consumers select caskets, Louisiana funeral directors must apply their specialized knowledge about above-ground burials. But those rationales are doubtful, among other reasons, because Louisianans are free to buy caskets from out-of-state casket sellers, including Wal-Mart and Costco. It seems likely that a little more competition in casket sales would help Louisiana consumers. Stay tuned.

Baltimore Sun Article on CFPB's Forthcoming Look at Arbitration

Here.  An excerpt:

[N]ot every company inserts arbitration clauses in contracts, but it's nearly impossible for consumers to avoid them altogether.

"You would have to live in a cave somewhere," says Amalia Kessler, a professor of law and legal history at Stanford University. "You can opt out of society. That's how you can opt out of these things."

Cato Institute Paper on the Fair Credit Reporting Act and Preemption

Jim Harper

 of The Cato Institute has written Reputation Under Regulation: The Fair Credit Reporting Act at 40 and Lessons for the Internet Privacy Debate.  Here's the abstract

More than 40 years ago, Sen. William Proxmire (D-WI) guided the Fair Credit Reporting Act (FCRA) through Congress, seeking to improve the operations of the credit reporting industry. The complexities and tensions in a reputation system like credit reporting are formidable, however, and the FCRA has not satisfied consumer group demands for accurate, responsive, fair, and confidential credit reporting. In fact, new problems have emerged, such as credit repair fraud and identity fraud.

Credit reporting today is anything but the confidential service Proxmire hoped for. Passed in tandem with a financial surveillance law called the Bank Secrecy Act, the FCRA has been turned toward government and corporate surveillance, providing little or no privacy or control for consumers.

As economic theory predicts, the credit reporting industry appears to have benefited from the ossifying effects of regulation. Though the information and technology environments have changed dramatically over the last four decades, the credit reporting and reputation marketplace has seen little change or innovation. A potential related market for identity services is also stagnant thanks in part to government policies.

When Congress chose to preempt common law remedies for wrongs done by credit bureaus, it withdrew a tool that could have guided credit reporting toward better service to consumers and a more innovative and vibrant marketplace. With uniform national regulations, we cannot know how credit reporting might have evolved for the better.

Billionaires for Romney

Rolling Stone has this useful piece on the relationship between the Supreme Court's Citizens United decision and efforts by 15 billionaires to use their wealth to elect Mitt Romney. The article includes a five-paragraph introduction and then a biographical paragraph on each of the billionaires. Here's an excerpt:

Presidential politics has always been a rich man's game. But now, thanks to the Supreme Court ruling in Citizens United that upended decades of limits on campaign donations, financing a presidential race is the exclusive domain of the kind of megadonor whose portfolios make Mitt Romney look middle-class. "I have lots of money, and can give it legally now," Texas billionaire and top GOP moneyman Harold Simmons recently bragged to The Wall Street Journal. "Just never to Democrats." * * * The undisputed master of Super PAC money is Mitt Romney. In the primary season alone, Romney's rich friends invested $52 million in his Super PAC, Restore Our Future – a number that's expected to more than double in the coming months. This unprecedented infusion of money from America's monied elites underscores the radical transformation of the Republican Party, which has made defending the interests of 0.0001 percent the basis of its entire platform. "Money buys power," the Nobel Prize-winning economist Paul Krugman observed recently, "and the increasing wealth of a tiny minority has effectively bought the allegiance of one of our two major political parties." In short, the political polarization and gridlock in Washington are a direct result of the GOP's capitulation to Big Money.

Rob Weissman on the Facebook IPO and the Need for More Regulation of Wall Street

Here.

FTC Settlement with Skechers

Read this nice post from Arnold & Porter's Consumer Advertising Law Blog about the Federal Trade Commission's settlement with the sneaker company Skechers over its goofy celebrity ads claiming that wearing its "toning " shoes helps you lose weight and tighten your butt. Skechers has also settled with the states.

Supreme Court grants petition in FDCPA case

    The Supreme Court today took a case for next Term that raises an issue under Fair Debt Collection Practices Act. (Disclosure: I am Supreme Court counsel for the petitioner.) That Act generally prohibits debt collections from communicating with third parties about a consumer’s debt. Plaintiff Marx sued GRC, a debt collector, for sending a fax to her employer that included information concerning a debt. A panel of the Tenth Circuit Court of Appeals held that the fax did not constitute a communication within the meaning of the FDCPA because the fax did not indicate that it related to a debt. The court also upheld an award of costs against Marx.

    The cert petition raised two questions. First, FDCPA provides that, “[o]n a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” 15 U.S.C. § 1692k(a)(3). Federal Rule of Civil Procedure 54(d) provides that, “[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.” The question presented in the petition is whether a prevailing defendant in an FDCPA case may be awarded costs where the lawsuit was not “brought in bad faith and for the purpose of harassment.” Second, the petition sought certiorari on the question whether the FDCPA’s strict limits on communications with third parties cease to apply when a debt collector, contacting a third party in connection with the collection of a debt, does not indicate the reason for the communication.

    The Supreme Court granted the petition only as to the first question. The question is more "cert-worthy" than the second one because the Ninth and Tenth Circuits are split on the answer. At the appellate level, in support of a petition for rehearing en banc (which was denied), the Consumer Financial Protection Bureau filed an amicus brief supporting the plaintiff's view, and we hope that the government will file again at the merits stage of the case. The grant provides a chance to correct an appellate decision that may deter debtors from bringing cases to challenge abusive debt collection practices, because many debtors will not be able to risk having to pay the defendant's costs if the defendant prevails in the suit although the debtor brought the case in good faith.

    At the same time, I am disappointed that the Court denied the petition as to the second question, regarding the scope of "communications." On that question, the Tenth Circuit's decision undermines many important FDCPA protections.

Nice coverage of Public Citizen's latest consumer case

Here.

Provides a thorough discussion of the case we filed last Thursday, and situates it within the context of a dangerous pro-business trend toward shutting consumers out of court.

The Biggest Myth of Taxation

According to Bruce Bartlett, it is "the complete and total nonsense" that raising taxes on people with high incomes will slow economic growth (or, put the other way around, that lowering taxes on high incomes will stimulate economic growth). Watch Bartlett here or click on the embedded video below:

 

Sunscreen and FDA (Non-)Regulation

The Environmental Working Group (EWG) has come out with its 2012 Sunscreen Guide, which seeks to help consumers pick the best sunscreens. As Mother Jones reports here, people who use sunscreen are more vulnerable to cancer-inducing sun damage, among other reasons because using sunscreen gives them a false sense of invulnerability. According to EWG, one problem is FDA's regulatory failure:

The [2012 EWG] guide comes less than a week after the FDA pushed back the compliancy requirement for a news set of guidelines (33 years in the making) meant to urge manufacturers to more clearly label their products and toss out misleading terms like "sweatproof" and "sunblock." But even the now-delayed FDA guidelines, says EWG, fall short in some important ways. For starters, the FDA's new guidelines fail to address the risk of trusting a sunscreen with an SPF higher than 50. For sunscreens that boast SPF 100, for instance, "there's no evidence they provide additional health benefits," says David Andrews, a spokesperson for EWG. The higher value "lends to a sense of invincibility, so that people spend more time in the sun longer," Andrews argues.

Are Too Many People Going to College (and Racking Up Too Much Debt)?

Here.

Student Loan Debtors Are Often College Dropouts

We've been covering the issue of exploding student loan debt, which now exceeds $1 trillion. (Yes, that's $1 trillion.) About 1/4 of all student loan debtors are in default. And now, the Washington Post reports that the problem is exacerbated by the increasing inability of student loan debtors to complete their studies (and, presumably, increase their chances of getting a job that will help them pay back their student loans). In 2001, 23% of student loan debtors had dropped out. In 2009, that figure was 29%. At four-year for-profit colleges, the 2009 rate was 54%, up from 34% in 2001.

Some Prescription Drug Costs Soaring

The typical two-tiered prescription drug coverage plan charges, say, $30 for a 30-day supply of the branded drug and $15 for the generic. But, as explained here, major insurers -- such as the Blues and Aetna -- now have added a third tier for  expensive "speciality" drugs that treat cancer, rheumatoid arthritis, and multiple sclerosis, to name a few. The co-pays are very large. Proposed state legislation would limit patient payments, but the insurers are saying that's a bad idea because they'll just have to raise everyone's premiums, and, besides, in 2014, the Affordable Care Act will limit patients' total out-of-pocket obligation. (And if state limits are enacted, won't the insurers argue that they are federally preempted by ERISA?)

Jill Gross on AT&T Mobility

Jill Gross

 of Pace has written At&T Mobility and FAA Preemption, forthcoming in the Penn State Dickinson School of Law Yearbook on Arbitration and Mediation.  Here's the abstract:

The Supreme Court's recent arbitration law decisions reflect the Court's strong support for arbitration agreements, but also severely limit the states’ powers to police the fairness of arbitration. In particular, the Court’s decision in AT&T Mobility v. Concepcion, LLC expands the FAA preemption doctrine beyond its prior boundaries, signaling how far the Court is willing to go to support arbitration clauses at the expense of states’ rights and the values of federalism. This article explores the impact of AT&T Mobility on the preemption of state arbitration law, and the concomitant impact on the balance between state and federal power in the arbitration arena. This article argues that AT&T Mobility results in FAA over-preemption, as it unduly shifts arbitration law-making power away from the states, in violation of the FAA’s savings clause.

Paper Finds Evidence of Redlining and Race-Based Discrimination in Subprime Loan Pricing

Andra C. Ghent

 of Arizona State University (ASU) - Finance Department and

Ruben Hernandez-

Ruben Hernandez-

Murillo and

Michael Owyang

, both of the Federal Reserve Bank of St. Louis have written Race, Redlining, and Subprime Loan Pricing.  Here's the abstract:

We investigate whether race and ethnicity influenced subprime loan pricing during 2005, the peak of the subprime mortgage expansion. We combine loan-level data on the performance of non-prime securitized mortgages with individual- and neighborhood-level data on racial and ethnic characteristics for metropolitan areas in California and Florida. Using a model of rate determination that accounts for predicted loan performance, we evaluate the presence of statistical and taste-based discrimination, as well as disparate impact and disparate treatment discrimination, in mortgage rates. We find evidence of redlining as well as adverse pricing for blacks and Hispanics.

POM Wonderful Takes on FTC in New Advertising Campaign

On Wednesday, we blogged about a decision of an FTC adminsitrative law judge holding that POM Wonderful's claims that its products prevent or treat heart disease, prostate cancer, and erectile dysfunction were false and unsubstantiated. POM has responded with a new ad campaign saying that, under the FTC's ruling, it can still advertise about the product's "health benefits" (for instance, that drinking pomegranate juice "supports prostate health") as opposed to making a specific disease prevention or mitigation claim (for instance, saying that drinking the juice prevents prostate cancer).

UPDATE: More on this topic from the Washington Post: "Pom tests limits of FTC power with ad campaign"

New Resources from NCLC

This update lists NCLC’s new reports, webinars, our conference, and other practice tools:

1. FTC releases important Advisory Opinion on its rule Preservation of Consumer Claims and Defenses, strengthening the ability of consumers to get affirmative recoveries from assignees and other note holders. 

2. Register for NCLC’s Summer Mortgage Conference 2012 at the L’Enfant Plaza Hotel, Washington, D.C. July 17-18, 2012. For more information about the conference, to register, and hotel reservations.

3. How to set up an effective foreclosure mediation program in your state—see NCLC’s Rebuilding America.

4. An in-depth look at how errors by criminal background checking companies harm workers and businesses.

5. NCLC REPORTS (March/April 2012):

Deceptive Practices & Warranties Ed.: new federal statutory changes re removal, diversity, jurisdiction and venue; 3^rd Cir. upholds arbitration class arbitration ruling; what you don’t know about check payments.

Bankruptcy & Foreclosures Ed.: loan modification or curing a default in bankruptcy for widows, orphans, and divorcees; Treasury announces HAMP Tier II Loan Mod Program

Debt Collection & Repo Ed.:  11^th Cir finds FDCPA applies to mortgage debts; 9^th Cir finds owner of debt collection agency personally liable; 8^th Cir. rejects FDCPA claim for litigation abuse; 4^th Cir. finds no federal banking preemption for repo claims

Consumer Credit & Usury Ed.: BofA settles ECOA/FHA claims against Countrywide; Can you toll the TILA statute of limitations

6. NCLC free webinar series continues:  
Wednesday, May 30 at 2PM EST:   “Alternatives To Bankruptcy: Advising Seniors When Bankruptcy Is Not An Option.” Contact:  jhiemenz@nclc.org  for this and future webinars. 
Also, FREE downloads of over 50 past webinars.  
Have ideas for future webinars?  Please fill out our short survey.

Vehicle Crashworthiness Safety Ratings

Jeff's post on the simplicity of giving grades to banks as a method of providing consumer information got me thinking about the five-star system for vehicle crashworthiness used by the National Highway Transportation Safety Administration. So long as the ratings are accurate, the five-star system seems like a good idea for the reasons Jeff says: It conveys useful information, and it is easy to understand. As NHTSA puts it: "More Stars equal Safer Cars. 5-Star Safety Ratings measure the crash worthiness and rollover safety of vehicles. Five stars is the highest rating, one is the lowest." Pretty simple.

It's not quite that simple because rated vehicles actually have three separate ratings: one for frontal-crash safety; one for side-crash safety; and one for rollover safety. And this year, NHTSA began assigning an overall safety star rating as well. So, for car X, you'll know whether it is very good (5), quite bad (1), or something in between.

NHTSA's website on the topic works well. You can search vehicles by model, class, and manufacturer, and you can compare vehicles. I was surprised by some of the ratings, which tells me that it's worth checking the website before you buy a car. I would have assumed that my little 5-door Prius was not very crashworthy. It seems so flimsly and light. Actually, this year's model gets a 5 overall (and the 2009 model, which I own, gets a 4).

You may want to read NHTSA's FAQs on the 5-star program.

Advantages of Arbitration

The New York Times yesterday published (online) a piece by the lawyer who handled and won AT&T v. Concepcion called The Advantages of Arbitration. In his piece, Andrew Pincus says that the court system is not actually a good option for consumers because it is slow and costly, and "most legal injuries are too individualized and too small to attract a lawyer’s assistance." He does not acknowledge that class actions provide an avenue for relief in just that circumstance -- when the individual's injury is small but the number of individuals injured is large -- or that an individual who has trouble finding a lawyer to handle a case in litigation will likewise have trouble finding one to handle a case in arbitration. The piece also does not address costs of arbitration or any of its limitations. Overall, a well-written but entirely one-sided view, advocating against consumers' and employees' access to the civil justice system.

THe CFPB Proposes New Non-Bank Supervision Rules

As discussed here by Jenna Greene of the National Law Journal:

The Consumer Financial Protection Bureau released a draft rule May 24 outlining how it plans to supervise debt collectors, consumer reporting agencies, money services companies and other small nonbanks that engage in "activities that pose risks to consumers." The draft rule sets out procedures to notify a nonbank that it is being considered for supervision and outlines how the nonbank can respond. Companies under CFPB supervision may be required to submit reports to the agency and undergo examinations.

Go here to view the proposed rules. The public has 60 days to comment.

U.S. Senate Unable to Pass Student Loan Bill

As we've explained, if Congress doesn't act by July 1, interest rates will double on federal student loans. The Senate today rejected both a Democratic bill and a Republican bill, which is what happens when you combine the filbuster rule with strict party-line voting and a Senate in which neither party has 60 members. This AP story describes the situation:

Both [the Democratic and Republican] measures rejected Thursday would delay the interest rate increase for a year at a cost of $6 billion, but each side's bill was paid for in a way the other couldn't tolerate. Democrats proposed raising Social Security and Medicare payroll taxes on high-earning owners of some privately held companies and professional practices, while Republicans would abolish an Obama preventive health program.

UPDATE: Read more here.

A welcome move from Google

by Paul Alan Levy  

I will confess that, as a lawyer who has dedicated his career to the public interest movement, I was disappointed when Fred von Lohmann, one of the top lawyers at the Electronic Frontier Foundation, left to work inhouse at Google.  Not only was the public interest movement losing one of its leading lights, an astonishingly bright and creative lawyer, but it just seemed to me typical of the whole problem of Google buying up the top talent, whether directly by hiring them or compromising them by making donations.  (Public Citizen simply does not take corporate contributions, including contributions by foundations controlled or funded by corporations).  

But Fred's recent blog post about one of his major projects, transparency in removals, reminds us of what good people can do from the inside.   He reports that Google will sometime actually look at requests for removal of search results, and reject them when they go too far, and that Google is including copyright takedown requests in its effort to be clear with the public about the extent to which various copyright holders are using -- and perhaps abusing -- the system.

Still sorry that Fred is no longer at EFF, but this is good stuff.