Blasie on Plain Language Laws

Michael Blasie of Pennsylvania State University, Dickinson Law has written The Rise of Plain Language Laws, University of Miami Law Review, 2022 Forthcoming. Here is the abstract:

When lawmakers enacted 778 plain language laws across the United States, no one noticed. Apart from a handful, these laws went untracked and unstudied. Without study, large questions remain about these laws’ effects and utility, and about how they inform the adoption or rejection of plain language.

This Article creates a conceptual framework for plain language laws to set the stage for future empirical research and normative discussions on the value of plain language. It unveils the first nationwide empirical survey of plain language laws to reveal their locations, coverages, and standards. In doing so, the Article creates a systematic method to find these laws. Then it coins categories and terminology to describe their coverage and standards, thus creating a timely launchpad for future scholarship on domestic and international plain language laws. Along the way, the Article exposes the previously unknown scope of these laws—from election ballots and insurance contracts to veterans housing and consumer contracts to regulatory drafting and governor reports. That scope underscores the pervasive influence of plain language across public and private sectors, and over lawyers and non-lawyers alike. More, the survey reveals significant intrastate and interstate variations and trends in coverages and standards. With this knowledge, for the first-time empirical research can more precisely measure the benefits and costs of plain language laws while controlling for variables. Plus, the Article sets the stage for a forthcoming series of normative assessments on the role and design of plain language laws. Ultimately, the Article reignites a lively discourse on plain language amongst lawmakers, practitioners, and academics.

Chandrasekher study finds lack of diversity among arbitrators

Andrea Chandrasekher of California, Davis has written An Empirical Investigation of Diversity in U.S. Arbitration. Here is the abstract:

For decades, the United States system of arbitration has been subject to nearly constant public criticism. Calling arbitration a rigged judicial system, consumer and employee rights groups have voiced opposition to the practice of "forced arbitration" whereby millions of Americans are contractually required to settle disputes in arbitration rather than in litigation. Just when it seemed that things couldn't possibly get any more controversial, arbitration is in the hot seat again, this time over the lack of diversity amongst U.S. arbitrators. In the wake of a national racial reckoning and high profile cases that have called attention to the issue, arbitration has been called the place "where white men rule." Despite this national attention, the number of rigorous empirical studies investigating diversity in arbitration is limited. Because much of the diversity conversation has been based on anecdotal information and survey data which doesn't cover the full population of U.S. arbitrators, basic facts about the demographic profile of U.S. arbitrators are still unknown: What percent of arbitrators are diverse (i.e.—Black, Hispanic, Asian, or female)? Are diverse arbitrators under-selected for arbitration cases compared to their white male counterparts? Most importantly, to what extent do the race and gender of the arbitrator impact the outcome of the arbitration?

This paper contributes to the literature by using an originally-collected data set of arbitrator race, ethnicity and gender from the two largest arbitration firms in the U.S., Judicial Arbitration and Mediation Services (“JAMS”) and the American Arbitration Association (“AAA”). The data were collected using public data sources and cutting-edge machine learning techniques. This is the first-ever empirical effort to estimate the race and ethnicity of arbitrators for both the JAMS and AAA populations. The analysis presents estimates of the demographic profile of the supply of U.S. arbitrators, the demographic profile of the subset of arbitrators that are actually selected to arbitrate, as well as regression analyses examining the relationship between arbitrator diversity and arbitration outcomes.

The study has four main findings. First, women and people of color are underrepresented amongst U.S. arbitrators, both relative to the U.S. population and relative to the population of American lawyers and judges. The extent of the underrepresentation for both groups is significant, though it is more severe for arbitrators of color than for female arbitrators.

Second, the rate at which arbitrators of color and women are selected to arbitrate is generally proportional to their (very low) representation in arbitration organizations.

Third, with respect to arbitration outcomes, there is no statistically significant relationship between an arbitrator's race/ethnicity and how they decide cases. However, the reason for this non-finding is that the study is statistically under-powered. In other words, with less than 4% of arbitrators being Black, Asian, or Hispanic, there are simply not enough arbitrators of color to even conclusively study the relationship between racial / ethnic diversity and arbitration outcomes. This, in and of itself, is a powerful statement about the lack of diversity in US arbitration.

Fourth, as has been found in some previous studies, the evidence suggests that female arbitrators are less likely than their male counterparts to rule in favor of plaintiffs. The likely reason for this is differential case selection; female arbitrators disproportionately decide cases that are harder for plaintiffs to win. This gender effect exists in both JAMS and AAA arbitrations, though the results vary from statistically significant in some models (p<0.05) to weakly statistically significant in others (p<0.10).

The study concludes by offering policy observations for the road forward.

Showdown at the Second Circuit on the Standards Protecting Onine Anonymity

by Paul Alan Levy

An important case about anonymous online speech is hurtling toward a decision in the Second Circuit. The situation is worrisome because defendants are so unsympathetic and the plaintiff’s legal claims seem to me very strong. The danger is that the trial judge’s dismissive treatment of the right to speak anonymously could be addressed in a way that has serious implications for more legitimate speakers.

Everytown for Gun Safety Sues Gun Rights Activists for Trademark Infringement

The case arises from a dispute between advocates of broad access to firearms through the device of 3D printing of guns and the gun-safety policy group Everytown for Gun Safety Action Fund,  as well as its subsidiary Moms Demand Action. The groups strongly oppose the 3D printing of guns, which they see as a serious threat to safety and as an evasion of sensible gun regulation.

For the apparent purpose of expressing their contempt for Everytown and its affiliated group, some pseudonymous Internet users created instructions for the 3D printing of guns that were emblazoned with the Everytown and Moms Demand Action names, and in the precise contours of their respective logos, and uploaded them to a paid subscription site called Defcad. Then, other similar pseudonyms were used to tweet images of the printed guns; the tweets were directed among other places to Everytown.

 

"Wells Fargo found another way to abuse customers. Then I called them on it."

By David Lazarus at the LA Times here.

More baseless and unethical demand letters from Mathew Higbee

by Paul Alan Levy

It’s been some time since I have had occasion to write about Mathew Higbee’s use of baseless threats of litigation seeking to wring undeserved dollars out of alleged copyright infringers. To be sure, many of his demand letters seek remedies for plainly infringing uses, even if his monetary demands tend toward the excessive.

But today’s post is devoted to a pair of demand letters sent to former clients of mine who had to sue clients of the Higbee firm back in 2019 and 2020 for declarations of non-infringement after he had threatened to sue them over websites that were hosting discussion forums to which users had posted photographs, or links to photographs. Both in threatening Jessamyn West over her MLSTHP site, and in threatening to sue the Mockingbird Foundation over its website for Phish fans, Phish.net, the Higbee firm sought to take advantage over those hosts’ failure to perfect the registration of DMCA agents for receipt of takedown demands. But the threats foundered anyway, on the standard requirement that copyright owners show that the infringement was volitional.

Both Higbee clients had to agree to drop their demands, and one of the clients had to pay $10,000 in attorney fees. In light of these cases, as well as the retraction of a Higbee firm demand letter to Erik Anderson in response to a declaratory judgment action on behalf of photographers Mark Seliger and Steven Hirsch, Mathew Higbee assured me that his firm had stopped issuing demand letters to forum hosts over photographs posted by their users.

But the Higbee firm has returned to its old tricks (and why so greedy?  from the frequent queries I receive, its legitimate business has scarcely dried up). In the past month, I have heard both from counsel for Jessamyn West and from counsel for Mockingbird Foundation about demand letters that their clients received, demanding $7000 in damages for copyright infringement based on a Timothy White photograph  demanding $7000 in damages based on alleged infringement of a Timothy White photograph posted by a user to MLTSHP, and demanding demanding $25000 in damages based on the fact that there is a deeplink to a Jeffrey Werner photograph posted to a user comment on Phish.net. But these threats are double frivolous, because not only does the Higbee firm know that infringement liability would barred by the volition doctrine, but both sites fixed their DMCA agent registrations before the previous litigation began, and hence neither could be sued for damages anyway because the DMCA makes them immune so long as they respond promptly to properly submitted DMCA takedown notices (and lest one think the Higbee firm is unaware of the DMCA agents — Mockingbird ALSO received a Higbee firm  DMCA takedown letter for that same photograph).

Article on Article III standing, Spokeo, and TransUnion

Law prof Elizabeth Earle Beske has written Charting a Course Past Spokeo and TransUnion. Here's the abstract:

The Supreme Court’s 5-4 decision in TransUnion LLC v. Ramirez has dramatically upended standing doctrine, apparently out of concern that any other move will invite congressional manipulation and give rise to even greater evils. The Court has done so at considerable cost. TransUnion’s concreteness inquiry leaves lower courts at sea, inviting them to substitute their own policy preferences for legislative will in frustration of the separation of powers. It curtails the deferential review of economic legislation the Court has employed since the New Deal. It circumscribes Congress’s ability to act proactively to respond to novel challenges. Bearing these costs, we are told, is necessary.

But the concreteness inquiry should not have had a role to play in the adjudication of private rights by private parties at all. Since Spokeo v. Robins, Justice Thomas has persuasively demonstrated that the injury-in-fact inquiry applies as a filtering mechanism only where Congress has conferred public—not private—rights. Before TransUnion, Justice Thomas’s approach was gaining ground. In Uzuegbunam v. Preczewski, handed down three months earlier, eight members of the Court found actionable injury in the violation of a private right although plaintiff could show no harm and had sought only nominal damages. After TransUnion, this simple principle—the violation of a private right gives rise to presumed injury—no longer applies to private rights created by Congress. The TransUnion Court rejected the public-private right dichotomy in this context out of fear of congressional manipulation. The Court suggested that anything but a one-size-fits-all approach requiring federal judges to independently assess and find actual harm would permit Congress to confer “private” rights to public goods, thereby clogging the courts with generalized grievances and trammeling on the enforcement prerogatives of the Executive Branch. The Court apparently believed itself incapable of policing the distinction.

The Court’s lack of confidence in its own ability to avert congressional manipulation is misplaced. This Article demonstrates that for two decades an adjacent line of cases—Alexander v. Sandoval and Gonzaga v. Doe—has required lower federal courts to use text-based analysis to discern whether a statute has conferred an individual right. This approach, which focuses on rights-creating language and examines whether a statute has an aggregate or individual focus, supplies the limiting principle that will prevent the parade of separation-of-powers horribles the TransUnion majority fears.

Jack Gillis retiring after 38 years at Consumer Federation of America

Consumer Federation of America has announced that long-time consumer advocate Jack Gillis is retiring in January. Here is the press release:

After 38 years with the Consumer Federation of America, long-time consumer and auto safety advocate, Jack Gillis, will be retiring as CFA’s Executive Director in January 2022.  Gillis has been with CFA since 1983, serving as Director of Public Affairs and, since 2018, as Executive Director.  “Jack Gillis has been instrumental in successfully maintaining CFA’s leadership on a wide variety of consumer protection, financial services, housing, privacy, food, and safety issues,” said the President of CFA’s Board, Marceline White of the Maryland Consumer Rights Coalition.

CFA President White has announced the formation of a Transition Committee made up of representatives of CFA’s Board, Executive Committee and staff.  “We are pleased that Jack will remain as CEO during the search for a replacement,” said White.

“During his long tenure at CFA Jack has not only been CFA’s main conduit between the organization and the media, but over the years he has led CFA’s efforts in child and product safety, indoor air quality, consumer education, auto sales practices and, most significantly, auto safety.  As a well-known consumer advocate, Gillis is author, co-author and editor of 75 consumer books including The Car Book, published for 40 consecutive years.  He served for ten years as a contributing consumer correspondent for NBC’s Today Show representing CFA, was Good Housekeeping’s personal finance columnist, and was a child product safety columnist at Child Magazine,” said White.

“Gillis’ advocacy has been responsible for major changes in the automobile industry, including significantly improved vehicle safety, better warranties, and increased fuel efficiency.  Early in his career, The New York Times featured Gillis as a leader in a new breed of consumer advocates.  He was an adjunct professor at The George Washington University, where he taught in the Graduate School of Government and Business Administration, and he currently serves on the boards of the Center for Auto Safety (chair), Advocates for Highway and Auto Safety, Center for the Study of Services (Consumers’ Checkbook) and CAPA.  Previously, he was Executive Director of the Certified Automotive Parts Association, a non-profit standard setting organization.  He received his MBA from The George Washington University where he served as a Teaching Fellow and his BA from the University of Notre Dame,” added White.

“Serving the Consumer Federation of America for all of these years has truly been an honor.  It has enabled me to work closely with some of America’s greatest consumer and safety advocates, men and women who have truly changed America for the better.  Any success that I’ve had at CFA rests squarely on the shoulders of these remarkable activists.  As it enters its 54^th year, CFA has a very exciting future ahead and I will always cherish being a small part of its distinguished history,” said Jack Gillis.

CFPB request for comment on Request for Big-Tech payment platforms

On October 21, the Consumer Financial Protection Bureau ordered six large technology companies that operate payments systems in the United States -- Google, Apple, Facebook, Amazon, Square, and PayPal -- to provide information about certain of their business practices. The agency seeks the information to help it better understand how these companies use personal payments data and manage data access to users so the Bureau can ensure adequate consumer protection. 

The CFPB has now published a request for comments, due December 6, to submit comments to inform the agency's inquiry, which is generally about three areas:

• data harvesting and monetization,
• access restrictions and user choice,
• consumer protections, including protections from fraud and errors.

CFPB, DOJ, and OCC take action against Trustmark National Bank for discrimination

The Consumer Financial Protection Bureau and Department of Justice, in cooperation with the Office of the Comptroller of the Currency, have entered into a settlement to resolve allegations of redlining by Trustmark National Bank. The CFPB and DOJ allege that Trustmark discriminated against Black and Hispanic neighborhoods by deliberately not marketing, offering, or originating home loans to consumers in majority-Black and Hispanic neighborhoods in the Memphis metropolitan area. They also allege that Trustmark discouraged consumers residing in or seeking credit for properties located in these neighborhoods from applying for credit.

Under the settlement, which is pending court approval, Trustmark would put $3.85 million into a loan subsidy program for impacted neighborhoods, increase its lending presence there, and implement proper fair lending procedures. The order would also impose a $5 million civil money penalty against the bank, and will credit the $4 million penalty collected by the OCC toward the satisfaction of this amount.

The CFPB's detailed press release, with links to the complaint and proposed order, is here.

FTC report finds many internet service providers collect troves of personal data

A recent report by the Federal Trade Commission staff shows that many internet service providers (ISPs) collect far more data about their customers than many consumers may expect — including access to their Internet traffic and real-time location data — while failing to offer consumers meaningful choices about how they may use the data.

Focusing on the practices of 6 companies, the report identifies several troubling data collection practices among several of the ISPs, including that they combine data across product lines; combine personal, app usage, and web browsing data to target ads; place consumers into sensitive categories such as by race and sexual orientation; and share real-time location data with third-parties.

The report also finds that the privacy protections many of the companies offer raised concerns. Even though some ISPs promise not to sell consumers personal data, they allow it to be used, transferred, and monetized by others and hide disclosures about such practices in fine print of their privacy policies.

Many of the ISPs also claim to offer consumers choices about how their data is used and allow them to access such data. The FTC found, however, that many of these companies often make it difficult for consumers to exercise such choices and sometimes even nudge them to share even more information.

The FTC's staff report is here.

Victoria Barnes on Anne Fleming's Scholarship

Victoria Barnes of the Max Planck Institute for Legal History and Legal Theory has written Anne Fleming’s History of Law and Consumer Finance, 22  Enterprise & Society 316 (2021). Here's the abstract:

This article has teased out Anne Flemings’s interests and the overarching themes in her research. It shows how these themes and interests influenced the direction of her research in the hope that these ideas will continue to be influential in the years to come. Her scholarship tells a compelling story of individual lives, consumerism, and the pitfalls of leaving capitalism unbowed. The significance of Anne’s scholarship is not only owing to her substantive claims but also to her approach. She mapped out elaborate histories of lending, although she primarily assessed consumer finance law and economic policy by looking at their impact on the end user. There is much to be gained by taking such an approach and from using the consumer as a lens to examine banking and financial regulation.

May Courts Order Public Records Requesters to Return Mistakenly Released Documents?

by Paul Alan Levy

In releasing documents electronically pursuant to a public records request, a local government body in New Jersey made a rookie error: using software (presumably Word) to perform redactions in a manner that was easily undone when the requester opened the provided PDF documents using his own device. The documents revealed some settlement discussions between the government body and a local developer, as well as a sleazy effort to avoid disclosure by proceeding ex parte to secure confidentiality from a local judge who was hearing a lawsuit about the development controversy.  In response to a motion not served on the counsel for the requester, a known opponent, the judge gave her advance blessings to confidentiality under the Public Records Act. When the developer discovered the redaction error (because a member of the public angrily discussed the documents at a public meeting), the developer rushed into court and persuaded the  judge to issue a restraining order barring the requester from disseminating the documents and demanding both return of the documents and identification of everybody to whom the requester has given copies of the documents.

In similar circumstances, some FOIA requesters reflexively cooperate when agencies promptly ask for return of inadvertently released documents, but does the First Amendment authorize courts to order a clawback if the requester refuses?

Ninth Circuit Takes the Con Out of ConAgra

by Steve Gardner

Yesterday, the Ninth Circuit issued an excellent opinion on the issue of preemption of state law claims for deception involving foods regulated by USDA. Cohen v. ConAgra Brands, Inc.

Robert Cohen sued ConAgra for violations of California consumer laws. As the Court noted:

Cohen began purchasing various frozen chicken products such as chicken nuggets and fried chicken. These chicken products are produced by ConAgra and similarly labeled, with prominent representations on the front of the packaging that read (in capital letters of varying sizes): “Made with 100% Natural White Meat Chicken”; “No Preservatives”; “No Artificial Colors”; “No Added Hormones”; “No Artificial Flavors”; and “0g Trans Fat per Serving.”

Mr. Cohen alleged that the products he bought contained three synthetic ingredients: sodium acid pyrophosphate, sodium tripolyphosphate, and modified corn starch.

ConAgra’s primary defense was that USDA had approved its claims because it had approved its labels.

The district court agreed and held that Mr. Cohen’s claims were preempted.

The Ninth Circuit disagreed, holding that preemption applied to product labels only if USDA had actually approved the labels. It refused to take ConAgra’s word that USDA had approved its labels (because, for some reason, ConAgra did not introduce any evidence of USDA approval).

And, as to claims made on ConAgra’s website, the Ninth Circuit found that USDA preemption did not apply to websites.

In a last-gasp effort, ConAgra tried that old chestnut, the primary jurisdiction doctrine, urging the Ninth Circuit to leave things to USDA because this was a complicated issue. The Ninth Circuit demurred, concluding that it could read words.

Mr. Cohen was well-represented by Gretchen Elsner, supported by amici curiae National Association of Consumer Advocates, Animal Legal Defense Fund, and Food & Water Watch Inc. (I represented NACA but others handled the great bulk of the briefing, especially Kenya J. Reddy, Morgan & Morgan Complex Litigation Group.)

CFPB orders tech giants to turn over information on their payment systems

The Consumer Financial Protection Bureau has ordered Amazon, Apple, Facebook, Google, PayPal, and Square to turn over information on their payment system plans. The orders look like this.

The agency's press release begins this way:

Today, the Consumer Financial Protection Bureau (CFPB) issued a series of orders to collect information on the business practices of large technology companies operating payments systems in the United States. The information will help the CFPB better understand how these firms use personal payments data and manage data access to users so the Bureau can ensure adequate consumer protection. “Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” said CFPB Director Rohit Chopra. “We have ordered them to produce information about their business plans and practices.”

Read the full statement of Director Chopra here.

Robert F Kennedy Jr. Sues to Identify Blogger Who Pointed Out That He Spoke at Rally Connected to Neo-Nazis

by Paul Alan Levy

Our latest effort to defend the right to speak anonymously about issues of public concern brings us up against Robert F. Kennedy Jr.

Last summer, Kennedy spoke at an August 29 rally convened by the German far right to protest government restrictions aimed at corralling the COVID pandemic. Kennedy was, apparently, the third choice speaker, after appeals from a rightwing group called Querdenken to Donald Trump and Vladimir Putin went unheeded.  But when this group learned that Kennedy was coming to Germany for other reasons, it issued a public invitation and he responded. The German right waxed rhapsodic about the way in which Kennedy’s presence was lending legitimacy to their activity.

The rally and his speech were widely covered in the mainstream media, which reported that his rally was heavily attended by neo-Nazis  and that a variety of antisemitic and neo-Nazi factions  had been involved in organizing the event. Kennedy was infuriated by this coverage of the audience to whom he had become connected by speaking at the rally.  His position is that any neo-Nazis were at some other rally on the same day, and that Querdenken is a fine group unsullied by neo-Nazi or anti-Semitic ties. Our expert witness says otherwise.

The National Consumer Law Center is hiring a consumer-justice lawyer to work on predatory lending and banking

The great consumer-justice lawyers at the National Consumer Law Center are hiring a lawyer to work on predatory lending and banking issues. The job announcement is here. 

 

Traitor Joe – another big company with no sense of humor making IP threats

by Paul Alan Levy

I recently had the pleasure of representing Dan McCall again — author of such wicked parodies as NSA – the Only Part of Government That Actually Listens (we got to sue the NSA for a declaratory judgment of noninfringement); Ready for Oligarchy (over which we came with hours of filing suit against Hillary Clinton’s exploratory committee); and Bernie Is My Comrade (Sanders’ committee had the smarts to retract quickly).  Last week, I sent a response to a demand letter sent on behalf of Trader Joe's from a BigLaw attorney lawyer who, considering his claim to be a "seasoned intellectual property litigator," really should have known better than to subject his client to the Streisand Effect.

Read Rohit Chopra's statement to CFPB staff and other financial regulators right after his swearing in

Here.

An open letter to Rohit Chopra: Don't forget arbitration

Dear Rohit:

Congratulations on your confirmation to serve as Director of the Consumer Financial Protection Bureau! You are an excellent choice for many reasons, not least because you bring to the CFPB helm the experience of having served as an FTC Commissioner as well as having been at the CFPB in its earliest days.

Much has been written about the matters you are likely to pursue. No doubt much is also being written and said to you about what people want you to do. This is one of those communications: I hope you will use the CFPB’s power to regulate arbitration clauses. Pre-dispute arbitration clauses remain a serious limit on consumer protection and they are made all the worse by the fact that people agree to them without even knowing that they are surrendering constitutional rights.

It may feel as if you don’t have a deadline to act on arbitration clauses and so can put it off to attend to other matters that may seem more immediate. In fact, I fear you may have such a deadline. Because we do not know how the 2024 presidential election will go, your service at the Bureau might, unfortunately, end on January 20, 2025. And because of the Congressional Review Act, it is possible that Congress could block in 2025 rules adopted during the second half of 2024. In other words, your deadline for rules, including an arbitration rule, might actually be some time during the first half of 2024—less than three years from now. Accordingly, I hope you will not delay moving on arbitration clauses.

Some argue that Congress’s use of the Congressional Review Act in 2017 would prevent you from acting. For reasons I have explained at https://pubcit.typepad.com/clpblog/2021/05/a-suggestion-to-the-cfpb-for-a-new-arbitration-rule.html, I do not think that is so. If you proceed, there will be a battle, but it is a battle worth fighting.

One final point: many disagreements between consumer advocates stem from the desire of consumer advocates to prevent consumers from making poor choices (e.g., predatory loans, payday loan debt traps, and yes, contracts with arbitration clauses) and the desire of the industry to maximize consumer ability to make choices, including very bad ones. The unnecessary deaths of unvaccinated people from Covid has brought home the consequences of allowing people to make terrible decisions in another context. Similarly, during the Great Recession, millions lost their homes because they had willingly entered into tragic transactions. You can’t save lives, but part of your job is to prevent people from entering into transactions that could blow up their lives. I look forward to watching you do so.

Jeff Sovern

Are the Authors of Consumer Reviews Protected by Anti-SLAPP Laws?

by Paul Alan Levy

Today we entered an important case that will determine whether New York’s new and improved anti-SLAPP law protects the authors of consumer reviews against being sued for defamation when they reveal publicly that they were less than thrilled with a business’s services or products.

The case arose from the horrible experience of the Sproule family in early March 2020, when they traveled from their home in the Chicago suburbs to Sarah Sproule’s hometown, Wantagh, New York, to attend her father’s funeral. They brought along their daughter’s brand-new puppy (her Christmas present!) and took him in for grooming at a local business, VIP Pet Grooming Studio.  The precise course of events is disputed, but the bottom line is that the grooming was interrupted because the puppy reacted badly; water accumulated in the dog’s lungs; and after two days on a ventilator at a local animal hospital, at a cost of more than $10,000, the dog had to be put down.

Compounding the family’s misery, the grooming outfit refused to take any responsibility for what had happened. So Robert Sproule posted reviews on both Yelp and Google, and both he and his wife sued the grooming company for negligence once the courts reopened as the pandemic eased. On the same day that it responded to the negligence complaint, VIP Pet Grooming sued for defamation. In a particularly sleazy move, the company sued both Robert and Sarah Sproule, even though only Robert Sproule had posted the reviews. Was this punishment for Sarah Sproule’s having sued for negligence? Was it just extra pressure on the family as a whole? VIP's lawyer has ignored that question so far.

FTC settement bans bogus debt collectors from collections

An Atlanta-based debt collection company and its owners will be permanently banned from the debt collection industry under the terms of a settlement with the Federal Trade Commission.

The FTC's press release is here.

CFPB report on consumer complaints finds variations by race and wealth

The Consumer Financial Protection Bureau has released a report analyzing, by U.S. Census tract, patterns in the consumer complaints submitted to the CFPB between 2018 and 2020. The report finds that the complaints from wealthier communities and communities with higher percentages of white, non-Hispanic residents were more frequently about loan origination and performing servicing, while the complaints from communities of color and lower income communities were more frequently about credit reporting, identity theft, and delinquent servicing.

Some of the report’s other findings are:

• Complaints about loan originations increased by nearly 50% over the course of 2020, driven largely by mortgage complaints. This increase was centered in higher-income neighborhoods and neighborhoods with fewer people of color.
• Neighborhoods with the highest share of white, non-Hispanic consumers submit complaints about loan originations at more than twice the rate of neighborhoods with the highest share of Black consumers.
• Consumers from neighborhoods with the highest share of Black residents submit the most complaints per resident. Census tracts with the greatest share of Black residents (95% and over) have estimated complaint rates that are double the rates for tracts with the lowest share (5% and under).
• Lower income census tracts (those at or below 40% of their area’s median income) submit around 30% more complaints per resident than census tracts at around 100% of their area’s median income.
• Lower-income and communities of color are more likely to submit complaints about credit reporting, identity theft, and delinquent servicing, while higher-income and majority white, non-Hispanic communities are more likely to submit complaints about origination and performing servicing.

The CFPB report is here.

 

Harvard Law Review to publish Wilf-Townsend article: Assembly-Line Plaintiffs

Daniel Wilf-Townsend of Chicago has written Assembly-Line Plaintiffs, Forthcoming in the Harvard Law Review. Here is the abstract:

Around the country, state courts are being flooded with the claims of massive repeat filers. These large corporate plaintiffs leverage economies of scale to bring tremendous quantities of low-value claims against largely unrepresented individual defendants. Using recently developed litigation-analytics tools, this article presents the first nationwide study of these “assembly-line plaintiffs,” examining millions of cases across hundreds of jurisdictions. It documents the pervasive nature of this litigation, finding that in many court systems just the top ten private filers account for between one fifth and one third of all civil litigation.

This pattern raises serious concerns. Drawing on existing empirical literature and a sample of 1,000 recent case dockets, the article describes how these cases turn state courts into near-automatic claims processors for large corporations, transferring assets from mostly absent defendants without significant scrutiny of the underlying claims. These defendants, moreover, are often particularly vulnerable low-income consumers or members of other marginalized groups. And although many concerns raised by this litigation overlap with those related to unrepresented litigants more broadly, the structural features of assembly-line litigation—its one-sidedness, high volume, and low claim value—present distinctive challenges. The article concludes by considering a few specific potential reforms designed to meet those challenges: assessing a surcharge on frequent filers as a form of congestion pricing; enabling common defenses to be asserted as affirmative causes of action to facilitate aggregation; and moving courts away from one-case-at-a-time adjudication toward a more investigative, administrative-agency-like model.

(Slow) Progress on nomination of Chopra for CFPB director

In February, President Biden nominated FTC Commissioner Rohit Chopra as director of the Consumer Financial Protection Bureau. Yesterday evening, the Senate voted 49-48 along party lines to advance his nomination to the Senate floor from the Senate Banking Committee. A confirmation vote could come next week.

Hawkins & Penner essay about advertising, racial steering, and lending

Jim Hawkins of Houston and Tiffany Penner have written Advertising Injustices: Marketing Race and Credit in America, 70 Emory Law Journal 1619 (2021). Here is the abstract:

Access to affordable credit played a central role in the Civil Rights Movement. But today, racial and ethnic minorities oversubscribe to high-cost lending products like payday loans and underuse more affordable credit options that traditional banks offer. These trends remain even when controlling for demographic variables like income, credit score, and education. While research verifies that these disparities exist, little work explains why.

This Essay argues that advertising entrenches these racial inequities. Two empirical studies we conducted of advertising by banks and payday lenders suggest that payday lenders steer African Americans and Latinos to their products while banks market to whites. For instance, though African Americans make up only 23% of payday lending customers, 35% of the “model” customers featured in advertising on these lenders’ websites depict African Americans. Meanwhile, almost 30% of mainstream bank websites featured no African American models. Almost 75% featured no Latino models. Only 3% did not feature a white model. Even after the outcry over racial injustice in 2020, banks did not appreciably increase the representation of people of color on their websites.

This needs to change. We argue that lenders themselves are the first and simplest source for racial justice in advertising credit. Both payday lenders and banks can easily ensure that their advertising reflects the communities they serve. Congress and the Consumer Financial Protection Bureau also have a role to play. Amendments we propose to the Equal Credit Opportunity Act, the Community Reinvestment Act, and the regulations that implement them call for advertising that welcomes people of color to affordable credit sources.