Consumer Law & Policy Blog

President Bush Signs Landmark Student Loan Legislation

The Washington Post reports here that President Bush just signed into law major student loan legislation - - the College Cost Reduction and Access Act.  As indicated in our earlier post, the major focus of public attention has been Congress's efforts to slash subsidies to lenders and police improper relationships between lenders and educational institutions.  But the thrust of the legislation is the substantial reduction of interest rates for low- and moderate-income borrowers and other features that will ease student borrowing.  As the Post puts it:  The legislation "will gradually reduce interest rates on federally subsidized loans for low-income students to 3.4 percent over five years. The law will also offer loan forgiveness for those who have held public service jobs for 10 years and will cap payments on federal loans at a certain percentage of a college graduate's income."  The legislation also expands the Pell Grant program aimed at poor students.  An earlier Post story provides more detail.  The text of the legislation is available here. 

Public Citizen Report Documents Arbitration Abuses

Public Citizen's Watchdog Blog discusses a new report concluding that arbitrators rule for business between 94 and 97 percent of the time. From the blog:

In a nutshell, [binding mandatory arbitration] is a private, corporate-dominated secret “court” that overwhelmingly rules against consumers. In this world, merely by signing your name on the dotted line, you have forfeited your right to a trial by jury. If someone steals your identity and runs out to buy a $4,000 plasma TV – and the credit card company wants YOU to pay for it – the dispute will automatically bypass the public civil justice system. Instead, it goes straight to an arbitrator who may have heard thousands of cases for that same credit card company.

View the report here.

Ninth Circuit: No Cause of Action for Disparaging a Company's Trademark

by Greg Beck

In Freecycle Network v. Oey, the Ninth Circuit yesterday reversed a district court’s preliminary injunction prohibiting the defendant "from making any comments that could be construed as to disparage upon [Freecycle's] possible trademark and logo" and requiring that he "remove all postings from the [I]nternet and any other public forums that he has previously made that disparage [Freecycle's] possible trademark and logo."

Freecycle is a nonprofit corporation that hosts forums where users can give and receive free stuff online. The defendant, Tim Oey, is a former Freecycle member who had posted his opinion online that the word “freecycle” is a generic term in which the company has no trademark rights. Freecycle sued Oey, claiming that his Internet posts infringed and disparaged the company’s trademark. The district court agreed and entered the preliminary injunction. The Volokh Conspiracy has the district court's order.

On appeal, the Ninth Circuit held that Oey’s Internet posts did not infringe Freecycle’s trademark because he did not use the trademark in commerce and because his use of the trademark was not likely to confuse any consumers, two required elements of a trademark infringement claim under the Lanham Act. The court further held that there is no claim for “trademark disparagement” under the Lanham Act.

Presumably because the court held that Freecycle had no cause of action, it did not reach the question of whether the district court’s injunction violated the First Amendment. However, it’s hard to imagine how a prohibition against any speech that “could be construed as to disparage” Freecycle’s trademark could survive First Amendment scrutiny, especially where, as here, the speech is totally noncommercial. Consumers have a right to truthfully give their opinions about companies and products. Just because the opinions amount to "disparagement" doesn't give a company the right to stop it.

Nevertheless, companies unhappy about online criticism often claim that consumer disparagement of their trademarks gives rise to a cause of action under the Lanham Act. See, for example, Video Professor's case against 100 anonymous critics.

DOT Inspector General Issues Report on On-Board Flight Delays

Remember last winter when thousands of air travelers were stranded for hours and hours on runways without adequate food and water and any idea when they would be allowed off the plane? An article in today's New York Times discusses a long-awaited Department of Transportation Inspector General report on the issue.  The report itself appears to be comprehensive and detailed on the facts and the problem, but short on specific solutions.  (For instance, the report urges the agency to set a time period after which airlines must allow passengers to get off a plane, but it does not state what the limit should be.)  We blogged earlier here and here about airline passenger "bill of rights" legislation pending in Congress.

Program on Advertising and Marketing in Manhattan

The Association of the Bar of the City of New York is sponsoring a program titled Hot Topics In Advertising & Marketing 2007

on Wednesday, October 24 2007 9-12:30 p.m. at 42 West 44th Street, New York City.  The program will cover recent cases and legislative developments in the areas of general advertising, advertising to children, retail practices, branded entertainment, and sweepstakes and contests, as well as an update on regulatory enforcement priorities. For more information or to register, please view the brochure, call 212-382-6663 or go to www.nycbar.org

Sign Up for Supreme Court "Watch List"

Right before each U.S. Supreme Court conference -- the meeting at which the Justices decide, among other things, which cases to take -- Public Citizen Litigation Group's Supreme Court Assistance Project issues an email highlighting the conference's key cases and a "Watch List" providing detail on the most important matters pending before the Court.  If you want to stay up with doings at the Court, sign up right here, and you will automatically receive the email and Watch List.  You won't be inundated: The emails come out only every week or two during the Supreme Court Term.

And there's no better time to sign up:  Today marks day one of the Supreme Court's "long conference" - - a meeting where the Justices will consider the pending petitions that have built up over the Court's three-month summer recess.  The Justices will issue orders this week and/or next Monday (the first day of oral argument for the new Term), granting and denying petitions for cert. and addressing various other issues in pending cases.  To see the Watch List for the "long conference," go here.  And to view the email for the long conference go here.   Finally, to view emails regarding prior Supreme Court conferences, go here.

Subprime Songs

Today's Times points out these YouTube videos: "Mortgage Servicing Pie," to the tune of Don McLean's "American Pie," and "Takin' Care of (Subprime) Business," to the tune of Bachman-Turner-Overdrive's "Takin' Care of Business." 

Recusals for Anti-Plaintiff Bias?

In a wrongful death action in the Texas Supreme Court, plaintiffs recently moved for recusal of four justices for anti-plaintiff bias.  Relying heavily this paper by David A. Anderson at University of Texas (Austin), the plaintiffs argue that bias is evident from a couple of factors:  First, defendants won 87% of tort cases in the Texas Supreme Court in 2004 and 2005, a fact that Anderson argues cannot be explained by (1) the court's having left plaintiff victories in the courts of appeals undisturbed; (2) the correction of rogue courts of appeals; or (3) the implementation of tort reform legislation.  Second, defendants prevailed on 18 of 22 petitions alleging that there was "no evidence" to support a jury verdict, notwithstanding that in 17 of those cases the jury, the trial judge, and the court of appeals all found evidence supporting liability.

These are cogent arguments that tort plaintiffs don't get a fair shake in the Texas Supreme Court.  But assuming this motion will not secure the recusal of any justice, what might it accomplish?

Video on Predatory Credit Card Lending to College Students - Take Two

Yesterday, I blogged about a video produced by Americans for Fairness in Lending concerning predatory credit card lending to college students, with the video imbedded.  I just learned that daily email subscribers from this blog were not able to see the imbedded video.  So, for those folks, here's the video.  Enjoy.

Americans for Fairness in Lending Releases Cartoon Video on Predatory Lending

Check out this video by Americans for Fairness in Lending on credit card company tactics.

The video focuses on efforts to drive college students into debt.  In that regard, you might want to look at this law review article: Maxed Out College Students: A Call to Limit Credit Card Solicitations on College Campuses, by Creola Johnson, a Professor at Ohio State law school.