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Monday, December 06, 2010

Does Anybody Read Disclosures?

by Jeff Sovern

More and more anecdotal information is surfacing to supplement the empirical data indicating that consumers don't read disclosures.  According to Above the Law and Josh Blackman's blog, 7th Circuit Judge and former Chicago Law Professor Easterbrook stated at a Federalist Society event that he didn't read the RESPA disclosures when he recently bought a home.  His colleague at both Chicago and the court, Judge Posner, has been quoted to similar effect.  All this raises a number of questions, including: do disclosures serve any societal purpose at all?  If leading judges don't read them, is it fair to say that the reasonable person doesn't read them either?  Should we replace disclosures with something that actually provides consumer protection?  Does the so-called duty to read make sense when we know that people don't read?  (Hat tip: Dee Pridgen and her student, John Alexander Brodie)

Posted by Jeff Sovern on Monday, December 06, 2010 at 08:56 PM in Other Debt and Credit Issues | Permalink | Comments (2) | TrackBack (0)

Why Rosetta Stone’s Attack on Google’s Keyword Advertising Program Should Be Rejected

by Paul Alan Levy

In a brief filed today, Public Citizen argues to the United States Court of Appeals for the Fourth Circuit that trademark law does not prevent Google from selling keyword advertising for display when Internet users conduct a search using the words “Rosetta Stone” as a search term.  We became involved in the case because Rosetta Stone and its supporters seek to deprive consumers of valuable information about Rosetta Stone and its competitors.

Keyword advertising provides a means for those who have things to say about trademarked terms to call their communications to public attention.  Because both keyword advertising, and the "sale" of keywords, are commercial speech, the regulation of this practice must be consistent with the First Amendment.  Moreover, the only sound objective of trademark law is to protect consumers against confusion about whether goods and services emanate from the trademark holder.

Continue reading "Why Rosetta Stone’s Attack on Google’s Keyword Advertising Program Should Be Rejected" »

Posted by Paul Levy on Monday, December 06, 2010 at 04:07 PM | Permalink | Comments (0) | TrackBack (0)

Supreme Court Grants Cert in Major Class-Action Case, Rewrites Question

by Deepak Gupta

Picture1 This morning, the Supreme Court granted certiorari in a closely watched class-action case from the Ninth Circuit, Wal-Mart v. Dukes.  Although Dukes is an employment case, involving allegations of gender discrimination -- it's been called the largest class action in history -- the case is likely to have major implications for consumer class actions as well.

Dukes has already been the subject of a lot of press attention. In fact, I can't remember the last time a dispute between private parties garnered as much press at the cert stage, before the Court had even considered it.  The chatter increased even more when the Court emerged from a recent conference without granting or denying the petition. As some observers had predicted, the Court took the additional time to tinker with the two questions presented in Wal-Mart's petition:

I. Whether claims for monetary relief can be certified under Federal Rule of Civil Procedure 23(b)(2)--which by its terms is limited to injunctive or corresponding declaratory relief--and, if so, under what circumstances.

II. Whether the certification order conforms to the requirements of Title VII, the Due Process Clause, the Seventh Amendment, the Rules Enabling Act, and Federal Rule of Civil Procedure 23.

The second question, to which most of Wal-Mart's petition was devoted, reflected an unusual kitchen-sink approach by Wal-Mart's lawyers. The Court did not grant certiorari on that unmanageably broad question. Instead, the Justices agreed to hear the first question and posed a second question of their own: "Whether the class certification ordered under Rule 23(b)(2) was consistent with Rule 23(a)."

This morning's grant, together with Concepcion and Shady Grove, may reflect a growing interest among the Justices in class actions--a subject with which the Court has previously had relatively little involvement.  Lyle Denniston has more at SCOTUSblog, here.

Posted by Public Citizen Litigation Group on Monday, December 06, 2010 at 11:01 AM in Class Actions, U.S. Supreme Court | Permalink | Comments (0) | TrackBack (0)

Thursday, December 02, 2010

Marotta-Wurlgler Asks if Disclosure Matters

Florencia Marotta-Wurgler of NYU has written Does Disclosure Matter?  Here's the abstract:

Disclosure has long been the preferred regulatory approach to curtail one-sided standard form contract terms. Examples include the Truth in Lending Act, the new "ALI Principles of the Law of Software Contracts," and many other proposals which await Congressional approval. The appeal of disclosure is that it is relatively low cost, improves consumer decision-making and preserves consumer choice. For disclosure to be effective, however, it must increase readership and understanding of contracts to a meaningful rate, and, conditional on readership, contract content must be relevant to purchase decisions. This paper tests both these necessary conditions. We follow the clickstream of 47,399 households to 81 Internet software retailers to measure contract readership as a function of disclosure. We find that making contracts more prominently available does not increase readership in any significant way. In addition, the purchasing behavior of those few consumers who read contracts is unaffected by the one-sidedness of their terms. The results suggest that mandating disclosure online should not on its own be expected to have large effects on contract content.

Posted by Jeff Sovern on Thursday, December 02, 2010 at 10:04 PM in Consumer Law Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 01, 2010

Indiana closes debtors' prison

A while back I reported on the revival of debtor's prison in a southern Indiana county court.  The Indiana Court of Appeals has now struck down the local county court rule that imposed contempt sanctions, including imprisonment, for debtors who failed to pay small claims judgments on ordinary civil debts.  The county court rule provided for a "personal order of garnishment,"  which, unlike ordinary garnishment orders directed at third parties like banks and employers, would order the debtor herself to turn over any non-exempt funds in the debtor's possession, regardless of whether such funds actually existed.  The disabled and indigent defendant in the case at issue was found in contempt and ordered to serve 30 days in jail for failing to pay $10 monthly on a $445 judgment, despite not having any non-exempt assets or income.

The Court of Appeals cited the Indiana Constitution's provision that "there shall be no imprisonment for debt, except in case of fraud, " and voided the local court procedures.  Congratulations to John Brengle and Katherine Rybak of Indiana Legal Services on achieving simple justice in this case.

Posted by Alan White on Wednesday, December 01, 2010 at 11:34 AM in Consumer Litigation, Debt Collection | Permalink | Comments (0) | TrackBack (0)

Highlights from Mobile Payments: Global Markets, Empowered Consumers and New Rules

MobilePayby Colin Hector & Liz Eraker

Last month,the University of Washington, School of Law and the Samuelson Law, Technology & Public Policy Clinic at U.C. Berkeley Law School convened representatives from regulatory, academic, industry, and public interest communities for a day-long conference exploring the growth of mobile payment, or m-payment, systems. Experts discussed the promises and pitfalls of mobile payment systems in developed and developing markets, and evaluated various regulatory approaches to protecting consumers while ensuring continued innovation in the industry.

Although the conference covered a wide spectrum of topics, three basic questions provided a foundation for much of the discussion. First, to what extent will mobile payment systems develop as an independent payment system? Second, what are the consumer expectations concerning the security and integrity of m-payment systems? Finally, what regulatory models appropriately reflect these expectations while ensuring the continued development of this burgeoning technology?

Detailed highlights of the participants' discussion of these questions after the break.

Continue reading "Highlights from Mobile Payments: Global Markets, Empowered Consumers and New Rules"

Posted by Colin Hector on Wednesday, December 01, 2010 at 10:56 AM in Conferences, Consumer Law Scholarship, Global Consumer Protection | Permalink | Comments (0) | TrackBack (0)

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