Consumer Law & Policy Blog

Who Publishes in Top Law Journals and Implications for Consumer Law Scholarship

by Jeff Sovern

One of my goals with this blog has been to raise the profile of consumer law among legal educators.  Consumer protection affects all of us—as the effect of the subprime mortgage meltdown on the broader credit markets has demonstrated yet again—and yet it receives far less attention in the legal academy than other subjects that seemingly are less important (at least in my view).  In that spirit, I posted an entry some time ago wondering why consumer law is not taught at more elite law schools.  More recently, I’ve become curious about the extent to which the top law reviews publish scholarship on consumer protection.

Just in case anyone reading this blog doesn’t already know, publishing in top law reviews is the Holy Grail for many law professors.  Top placements confer prestige, which is likely to translate into offers from better schools, chairs, tenure, and higher salaries, among other things.  At least theoretically, top placements also attract more attention, which means your ideas are likely to have more of an impact. 

So I asked my research assistant to list the articles published in a recent year by the lead law reviews of the top twenty schools, as ranked by U.S. News (I share the objections everyone else has to using the U.S. News rankings, but for this purpose it seemed the least bad way to go).  In a future post, I’ll write about the subjects of those articles.  This post is about the authors of the articles in those law reviews, or more precisely, where their schools ranked according to U.S. News.

 

A few caveats: I have no idea if the year we picked is representative of other years.  Some authors (e.g., judges) were not affiliated with law schools while some articles were co-authored.  With co-authored articles, my research assistant counted both authors only if they were from different tiers while articles co-authored by two professors from the same tier got counted only once.

 

Here are the results: 114 authors were from schools ranked in the top ten; 121 were from schools ranked 11 through 50; 41 were from Tier II schools; 8 were from Tier III schools; and 4 were from Tier IV schools.  To put it another way, more than twice as many authors of articles in the top twenty journals (114) were from top ten schools as were from the bottom three tiers put together (53).

This phenomenon may have many explanations.  Articles by authors at top ten schools may be of better quality; after all, there’s a reason those professors are at top ten schools.  When a professor at X Law School submits a piece to the X Law Review, the students at X Law Review may be reluctant to turn it down even at the expense of better articles written by people at other law schools.  In some cases, the fact that a celebrity law professor holds a particular view may itself make the article noteworthy. Law review editors may use the affiliation of the author as a proxy for the quality of the article, particularly if the article is complex or deals with an area with which the editor is unfamiliar (something that is likely to be true of consumer law at top schools, by the way).  It’s easier for a law review editor to defend publishing an article by a professor at a top school than by a professor at a lower-ranked school.

 

This phenomenon has implications for subjects that are less well-represented at elite schools, such as consumer protection.  Because few professors at elite law schools specialize in consumer protection, we’re likely to see fewer articles in elite law reviews on consumer protection.  That’s unfortunate.

I had understood, of course, that the top law journals published many more articles by scholars at top schools, but I hadn’t realized the odds of winning the law review lottery were that bad for people in the bottom three tiers.  If you’re a professor at a school in the bottom three tiers and you want to publish in a top twenty journal (and who doesn’t?), you might do well to find a co-author at a first tier school. 

Criticism of Bush Administration Plans for Addressing the Subprime Mortgage Crisis

The Times editorial page continues to monitor proposals for addressing the subprime mortgage meltdown.  The most recent editorial, "Lifeline for Whom?," appeared yesterday.  Here's an excerpt:

In May last year, Senator Christopher Dodd, chairman of the Senate Banking Committee, convened a group of major banks and loan servicers that promised to “create a permanent solution,” wherever possible, for troubled subprime borrowers. Then there was Hope Now, created last October and, now, as of Tuesday, Project Lifeline, both created at the urging of the Bush administration and both involving mortgage industry honchos promising to help hard-pressed borrowers.

If the industry had kept the promises they made last May, the other two efforts might not have been needed. So it’s unclear why the administration continues to believe that urging the industry to do more is the most effective way to cope with the foreclosure crisis. The industry, for its part, has earned the skepticism that has greeted its serial promises.

The Business section also included an article about Project Lifeline.  Headlined "Plan to Aid Borrowers is Greeted by Criticism," the article included the following:

“These policies make nice politics because it says our politicians care about us and don’t want the impersonal market forces to hurt the innocent,” said Marc Chandler, the top currency strategist for Brown Brothers Harriman. “They don’t seem to address the real underlying cause of the angst in the market.”

And Senator Charles E. Schumer, chairman of the Joint Economic Committee in Congress, said in a statement that the plan failed to offer enough help.

“It is encouraging that lenders and servicers are willing to temporarily pause foreclosures, but only meaningful and long-term loan modifications will help keep people in their homes,” Mr. Schumer, Democrat of New York, said.

And here's a link to an article from December 30 in which local officials complained that they were not included in the Hope Now program:

[B]anking regulators in New York, New Jersey and Connecticut said the alliance was missing some important pieces: namely, them. The lack of a coordinated local response, they said, could hinder the financial recovery of thousands of struggling homeowners.

''Ignoring the complexities, differences and commonalities of state laws and regulations is a big miss for the Hope Now alliance,'' said Richard H. Neiman, New York's superintendent of banks. The omission, he added, ''exposes the alliance to proposing unrealistic plans without consideration for the complete picture.''

I should note that for all I know, local regulators have since become involved.

New Study Shows Disproportionate Numbers of Payday Lenders in Bible Belt and Mormon West

by Christopher Peterson

A new study, conducted by Steven Graves and myself, finds a surprising relationship between populations of conservative Christian Americans and the proliferation of payday lenders. A draft of the study can be downloaded from SSRN, free of charge.

The natural hypothesis is to assume that given strenuous Biblical condemnation  of usury there would be more aggressive regulation and less demand for payday loans in these states, but ironically, the numbers show the opposite is true. 

The study is based on the largest and most comprehensive database of payday lender locations yet created. We developed an index that measures the density of payday lender locations based on the number of lenders within a geographic area, the number of payday lenders relative to population, and the number of payday lenders relative to bank branches. We also developed an index that measures the political power of conservative Christians within a state. This index has three components. First it is based on voting scores given to a state’s Congressional delegation by a panel of three leading Christian Faith based advocacy organizations including the Christian Coalition, the Family Research Council, and the Christian Action Network. Second, the Christian power index also included Congressional delegation scores compiled by Poole and Rosenthal, two widely respected political scientists that study these issues. And finally the index was also based on the percent of a state’s Evangelical or Mormon population. Our results are based on a simple correlation coefficient test comparing the payday lending density index to the Christian power index. Our hope was to create transparent results, that simply describe a commercial and spatial pattern of high cost lending that exists in our society.

One thing our data does not show is a causal relationship between faith and payday lending. For example, we believe there are many other variables that help explain why this pattern has emerged, in addition to faith. Nonetheless, our findings should serve as a wake up call to pastors, religious leaders, and people of faith that usurious lenders are thriving in their neighborhoods, communities, and states. Given the Bible’s injunction against usury, Christ’s example of expelling usurious money changers, and the ancient Christian tradition of sound financial stewardship, our study suggests that Christian Americans may want to pressure their political leaders to better effectuate Biblical values on consumer finance.

We believe it is sad that states with a pious and honorable religious heritage now disproportionately host predatory lenders.

Eliot Spitzer: Bush Administration Stymied States In Efforts to Stop Predatory Lending Crisis

by Brian Wolfman

Check out this op-ed by Eliot Spitzer in today's Washington Post. The N.Y. Governor and former N.Y. attorney general argues that the Bush Administration, by insisting that federal law preempted the states' efforts to curb predatory lending, created and perpetuated the mortgage crisis. Spitzer explains that the states enacted laws and filed suits to try to curb predatory practices because they saw the current crisis looming. Sptizer explains the federal government's role:

"What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no."

"Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye."

Article on Peer Promotions and False Advertising Law

Ellen P. Goodman of Rutgers--Camden has written an article on how "peer promotions," such as postings on Facebook or blogs, fit into false advertising law.  The article, Peer Promotions and False Advertising Law, 58 South Carolina Law Review (2007), can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1009304.  Here's the abstract:

What many call social media or Web 2.0 applications - podcasts, blogs, and services such as Facebook and Wikipedia - allow individuals to communicate on a massive scale often anonymously or under assumed identities. Businesses are learning to take advantage of these social media to connect with consumers in ways designed to feel authentic and personal. The result is a massive flow of information to individuals, sometimes from their peers, and sometimes from institutions disguised as peers. When the information flow consists of advertising and promotion, it challenges the structure and application of false advertising law, which was designed to manage information in relatively controlled environments where few speakers were capable of mass communication.

This essay offers tentative thoughts on how “peer promotions” fit into the structure of federal false advertising law. In the first instance, it is important to set aside peer promotions that are spontaneous commentary on a product with no connection to the brand owner. These communications are not advertising at all, but editorial comment. Increasingly, however, brand owners themselves create “peer” promotions or adopt such communications for marketing purposes. In these cases, there is commercial speech which, depending on its content, may be regulated.

It is the gray area between brand control and no control where peer promotions most severely strain the application of advertising law and its efficacy. Where brand owners sponsor peer promotions but conceal their involvement, the resulting communication mixes the commercial speech of the sponsor with the noncommercial speech of the peer. The borders of commercial speech have shifted with each innovation in modern marketing, particularly as advertising has become more image-based and integrated into other forms of media content. Mixed peer-advertiser promotions take the blurring of commercial and noncommercial speech one step further and pose more insistently the central question of advertising law: how do we balance the desirability of regulating for transparent commercial communications with the free speech dangers of regulating at the commercial-expressive interface?

Bush Administration Unveils Foreclosure Reprieve Program

This article in today's Washington Post explains the Bush Administration's joint program with six large mortgage lenders -- Countrywide Financial, Bank of America, Citigroup, J.P. Morgan Chase, Washington Mutual, and Wells Fargo -- to offer short reprieves to homeowners on the verge of foreclosure. Go here for U.S. Treasury Secretary Henry Paulson's official statement on the program.

CPSC and NHTSA Recalls for January 2008

For January 2008, here are the product recalls instituted by the Consumer Product Safety Commission; and the vehicle and vehicle equipment recalls instituted by the National Highway Traffic Safety Administration.

Times Pieces on Telemarketing, the CPSC, and Credit Reports

Recent articles in the Times that bear on consumer law issues include a report in Wednesday's paper, "Papers Show Wachovia Knew of Thefts."  Some excerpts:

Last spring, Wachovia bank was accused in a lawsuit of allowing fraudulent telemarketers to use the bank’s accounts to steal millions of dollars from unsuspecting victims. When asked about the suit, bank executives said they had been unaware of the thefts.

But newly released documents from that lawsuit now show that Wachovia had long known about allegations of fraud and that the bank, in fact, solicited business from companies it knew had been accused of telemarketing crimes.

* * *

“YIKES!!!!” wrote one Wachovia executive in 2005, warning colleagues that an account used by telemarketers had drawn 4,500 complaints in just two months. “DOUBLE YIKES!!!!” she added. “There is more, but nothing more that I want to put into a note.”

However, Wachovia continued processing fraudulent transactions for that account and others, partly because the bank charged fraud artists a large fee every time a victim spotted a bogus transaction and demanded their money back. One company alone paid Wachovia about $1.5 million over 11 months, according to investigators.

“We are making a ton of money from them,” wrote Linda Pera, a Wachovia executive, in 2005 about a company that was later accused by federal prosecutors of helping steal up to $142 million.

Also on Wednesday, the Times editorialized about curing the problems with the Consumer Product Safety Commission in "The Next Step to Safety:"

Right now the commission is paralyzed because it lacks a quorum to adopt safety rules or order recalls. The White House must quickly fill at least one vacancy or Congress must quickly pass a law allowing the commission’s two members to qualify as a quorum.

There is a lot more work to be done. Congress should approve Senate legislation giving the commission the money and the authority it needs. At the very least, this would make it easier for the commission to notify consumers promptly when they have bought a hazardous product. The commission often keeps such data secret while it negotiates — for months or even years — with the manufacturer.

I've been meaning to post links to a couple of interesting articles from January.  First, Bob Tedeschi's column on mortgages, "How to Get a Cheaper Loan," which ran on January 20, described how lenders deal with the fact that the three credit bureaus sometimes report different credit scores for the same consumers:

To account for those differences during the mortgage application process, loan officers review the scores from all three credit bureaus and base their loan offers on the middle number. If a couple — married or not — is jointly applying for a mortgage, the loan officer will choose the middle score of the partner with the lower score.

This was news to me.  Tedeschi also reports:

Bureaus offer more than one type of report — TransUnion has its traditional report and its Vantage report, for instance. A bureau may well come up with different scores for the same borrower because each report weighs various factors like recent payment history in a slightly different way.

Finally, on January 19, the Times ran Janet Morrissey's "Your Money" column, headlined, "What's Behind Those Offers to Raise Credit Scores" about companies that, for a fee, piggy-back the credit records of people with good credit histories onto those with poor credit histories.

Credit Card Practices Bill Introduced in House of Representatives

Thanks to Ed Mierzwinski over at U.S. PIRG's Consumer Blog for this excellent post on the introduction last Thursday of the Credit Cardholders Bill of Rights Act, H.R. 5244. The bill addresses a number of credit card company practices, including imposition of certain interest rate and fee hikes and charging interest on already-paid-off balances. Ed's post has a number of useful links about the bill. The text of the legislation is here.

Foreclosure Counseling Controversy

by Alan White

The National Foundation for Credit Counseling, which represents many of the established non-profit debt advice agencies, dispatched a strongly-worded letter on Wednesday to the HOPE NOW foreclosure prevention alliance. In it, NFCC protests the refusal of the HOPE NOW hotline to include NFCC counseling agencies on its referral list for the national foreclosure hotline (888 995 HOPE). The letter asserts that because so few agencies are connected to the hotline, homeowners calling the hotline are not being referred to counselors, but often simply told to call their lenders (i.e. servicers.) This is the hotline number that President Bush misread on TV in December. HOPE NOW is an alliance of mortgage servicers and industry trade groups working with four housing groups to reach out to homeowners.

NFCC has its own hotline, 866 557-2227, foreclosure help web site, and referral network of housing counselors. Hopefully these groups, who all share the same goals, can work out their differences.