Consumer Law & Policy Roundup

by Deepak Gupta

So much is happening so quickly in the world of consumer law and policy right now that it's hard to keep up, let alone blog about it in our spare time. In this post, I'm taking advantage of the fact that I've just finished a major briefing project to point out just a few of the more interesting stories--an assortment of (1) things I've been meaning to blog about, (2) developments in the last day or two, and (3) stories that are continuing to unfold.  

In the coming days, I also plan to say something about how the consumer docket is shaping up for the Supreme Court's next term. (There are interesting cases on, among other things, arbitration, class actions, debt collection, and the interaction between the bankruptcy reform law and the First Amendment.)

• Auto bankruptcies and consumers' future claims. Chris Jensen at the Times had a story today on the different treatment of consumers' future products claims in the two big automaker bankruptcies: The Chrysler sale extinguished such claims, while the GM agreement will allow them (although it's unclear at this point whether that includes lemon-law claims). My Public Citizen colleague Adina Rosenbaum has been serving as lead counsel for the national consumer groups in both the GM and Chrysler cases. The litigation has been incredibly fast-paced; the Chrysler case made its way through every level of the federal court system--from bankruptcy court to the Supreme Court--within a matter of days. We recently posted the GM objections; here are the petition for certiorari and stay application from the Chrysler case, which we somehow neglected to post earlier.             

• Not everyone likes reinvigorated consumer protection: Given everything that's happened over the past couple years, is anyone still against increased enforcement of consumer protection laws?  Well, the folks at the conservative Point of Law blog reported today on our former colleague David Vladeck's first joint press conference as head of consumer protection at the FTC, and took the opportunity to remind us that they still don't like robust regulation. They do like Cass Sunstein's views on cost-benefit analysis, however, and are quite content to have him -- as opposed to, say Lisa Heinzerling -- running regulatory affairs at OMB.  (Oddly, it appears that Sunstein's published musings on animal rights are what's holding up his nomination in the Senate!)

• A new consumer financial protection agency?: Along the same lines, the Times reports that banks don't like plans for the new consumer financial protection agency, and "are placing top priority on killing President Obama's proposal." Public Citizen and Americans for Financial Reform released statements on the White House proposal, both stressing the need to supplement the agency with private rights of action for consumers. Graham Steele has more at the Fair Arbitration Now blog. The WSJ had a story recently focusing on Elizabeth Warren's central role; you can read one version of her original proposal here. Finally, here's the Times editorial making the case for a new agency.  

• The Cuomo bank preemption decision. Chris Peterson blogged on Monday about the Supreme Court's decision, in the Cuomo v. OCC case, to allow states to enforce their fair-lending laws against banks in court. The OCC's strange "enforcement preemption" argument--under which substantively non-preempted state law could not be enforced by the states--was thus rejected. You can read Justice Scalia's opinion here, the SCOTUSblog summary here, and some interesting thoughts at the Credit Slips blog by Bob Lawless here. Professor Lawless had a similar reaction to mine--that by preempting state subpoenas but not lawsuits, the decision creates a strange incentive for states to sue first and ask questions later. 

• Times profiles consumer advocate on energy policy: A really nice profile today of Tyson Slocum, who runs our energy policy shop, and who is finding himself less of a voice in the wilderness as the mood begins to shift in D.C.  

• FTC seeks comments on debt collection & arbitration: Following up on its February report on the 30th anniversary of the Fair Debt Collection Practices Act, the FTC is soliciting comments on protecting consumers in debt collection litigation and arbitration, in anticipation of a roundtable discussion at Northwestern Law School next month. Interested parties are "highly encouraged" to submit written comments or original research through August 1, 2009. Much of the focus will be on the problems posed by mandatory arbitration, and those with an interest in consumer arbitration should consider weighing in.

• First Amendment challenge to FDCPA rejected: In the first published appellate decision on point, the Sixth Circuit yesterday rejected a challenge to the Fair Debt Collection Practices Act (as applied to misrepresentations made in state-court litigation) under the First Amendment and the Noerr-Pennington doctrine. I argued that same issue in a case before the Alaska Supreme Court just over a month ago, so this is welcome news.