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Tuesday, December 15, 2009

Comments

application control57

Very nice and useful post.Really very informative one.I have been searching for this type of posts.Thanks for the information sharing with us.Keep blogging.

Limo Hire

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Jonas

...and yet, there is still plenty of consumer abuse going on. Is it that unfair acts are profitable? I don't know. But I do think the litigation is a net "good" for society (and not just because I am a consumer lawyer).

If you consider the cost cutting moves that subject consumers to bad treatment, litigation (or at least a letter from an attorney) is really the only option. It's one of the few areas where it would be easy to avoid liability: treat your customers well, and you won't have any problems.

Alan White

If the FTC were indeed a consumer protection agency, and FTC standards were acknowledged as the benchmark for adequate consumer protection, the authors' conclusions might follow. In the view of some, there has recently been a failure in consumer protection, particularly in the financial services area, leading to significant harm to consumer welfare, and indeed the economy generally. The increase in state consumer law litigation may have been a function of the increase in abusive practices encouraged by regulatory abdication at the federal level, FTC and banking agencies included.

James Torres

Their conclusions are nonsense. Here are the limitations they acknowledge:

First, reported CPA decisions do not allow for observation of complaints that were filed but subsequently settled without a reported decision. Second, the litigation selection bias inherent in using reported CPA decisions warrants caution for making strong conclusions about the quality of the underlying CPA claims. Third, the observed increase in reported CPA decisions could be affected by several factors including an increase in CPA litigation, a decrease in settlements, an increase in the number of written decisions due to uncertainty in interpreting CPAs, and an increase in the number of unpublished decisions reported to Lexis over time. However, it is not possible to fully separate the effects given the available data. Finally, for the Searle Shadow FTC, the case fact descriptions forming the basis of the excerpts given to Shadow Commissioners may not have included all of the facts ultimately relevant to the determination of liability.

With those limitations, no meaningful conclusion can be made. "Second, the litigation selection bias inherent in using reported CPA decisions warrants caution for making strong conclusions about the quality of the underlying CPA claims" Actually it prevents any conclusion at all about CPA claims in general. They clearly don't have any idea of the numbers of cases that are brought and settled without litigation or without appeal. In every other civil court that is the vast majority of cases. They are trying to extrapolate from the exceptions to the rule, not from the vast majority of cases. Pretty charts and complicated math don't change that simple fact. If CPA claims are like every other kind of tort action, something less than 1% of cases result in appeals which are reported and/or collected by Lexis. No generalization can be made because of the litigation and appeal bias inherent in studying that goup of cases. In addition, reading the appellate decisions and second guessing the trier's of fact is not analysis.

Let me give you an example. I am a medical malpractice lawyer. The majority of medical malpractice cases that are tried before a jury return a defense verdict. If we just looked at that component, trial verdicts, we would say that the majority of medical malpractice cases are not meritorious. However, we would be dead wrong. Since the majority of cases are settled, they are completely left out of the trial bias and are not reflected in the analysis. Again, a small percentage of cases are tried and they are not random. They are selected because of their unique features that make for a trial. The same is true of consumer protection suits and every other kind of civil case. Most clear violations of the law, contracts, standards of care, etc., get resolved by the parties long before they reach an appellate court.

The only conclusions that can be reached are that on this set of data are that the reviewers felt that the FTC wouldn't have done anything about the deceptive and unfair trade practices in most of the cases. No surprise there.

It is studies like this that imply much more than their data supports that are the basis for junk science and bad policy. Even the title, STATE CONSUMER PROTECTION ACTS, An Empirical Investigation of Private Litigation is completely misleading. It is an analysis of reported decisions, not private litigation as a whole.

I would love to hear how the authors think they can make conclusions based upon a random sample of a biased sample about the entire CPA litigation world. As in the medical malpractice example, if you take away all the clear violations and egregious conduct that is settled, you are left with tough cases that were tried for lots of reasons. So the study included no cases that were so clear that the defendant paid up either before litigation or before an appeal was necessary. That study should never have passed basic peer review because it has NO data to support its conclusions regarding the character and quality of CPA claims as a whole.

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