Consumer Law & Policy Blog

OT: Job-Killing Madlibs

by Jeff Sovern

I recently spotted this in the office of a politician of a certain party:

Want to know how to attack the arguments of the other party?  Just describe their proposals as "job-killing." For example, insert the proposal in the following:

The other party supports a job-killing _____.  Not only will this kill jobs, but it will raise your taxes.  Oppose the job-killing _____!  instead, vote for my plan to [do the opposite].

Here is how it works in practice:

The other party supports a job-killing program to hire people.  Not only will this kill jobs, but it will raise your taxes.  Oppose the job-killing hiring plan!  instead, vote for my plan to fire people.

And another example:

The other party supports a job-killing program to make students recite the Pledge of Allegiance.  Not only will this kill jobs, but it will raise your taxes.  Oppose the job-killing Pledge of Allegiance program!  instead, vote for my plan to ignore the Pledge of Allegiance.

Consumer Product Safety Commission to Launch Online Consumer Complaint Database

In March, the Consumer Product Safety Commission will launch a web-based public database containing all consumer complaints about products. Previously, much of this information was effectively kept secret under an exemption to the Freedom of Information Act.

The Washington Post claims that the business community is "working behind the scenes to delay or revamp the project."  Meanwhile, CPSC Chair Inez Tenebaum says that the database will go forward on schedule. Businesses claim that the database will be contain inaccurate information, while consumer advocates are praising the new system under which the CPSC generally will post complaints within 15 days of receipt.

The CPSC has established a website that will link to the database and that currently contains information on the new program, including introductory webinars for the public and industry.

Serwin Paper on History of FTC Privacy Enforcement

Andrew B. Serwin of Foley & Lardner has written The Federal Trade Commission and Privacy: Defining Enforcement and Encouraging the Adoption of Best Practices.  Here's the abstract:

This article examines the history and path of privacy enforcement by the Federal Trade Commission, as well as the FTC's recently issued "Protecting Consumer Privacy in an Era of Rapid Change: A proposed Framework for Businesses and Policymakers", in which the FTC suggested the adoption of best practices, including a "privacy by design" framework. The article examines the history of Section 5 jurisdiction, the privacy enforcement cases by the FTC, the new proposed framework, and proposes that the FTC take the proposed framework and implement it in a way that includes a focus on the sensitivity of data, provides a "safe harbor" from enforcement for businesses that choose to adopt the framework, and link the framework in a meaningful way to existing EU processes, such as Binding Corporate Rules. By combining these elements, the FTC can achieve meaningful and focused self-regulation and provide appropriate protection to consumers, while giving business an incentive to adopt best-practices, and also increase the level of international cooperation regarding privacy.

Stanley Fish Leads the Charge Against Immunity for Internet Hosts -- But Ignores the Costs

by Paul Alan Levy

The New York Times’ online edition carries a column by Stanley Fish, touting a book of essays by several law professors who, according to Fish, decry the ease with which offensive accusations and opinions can be published online and call for new limits on this freedom of expression.   To hear Fish tell it, “The answer given by the authors in this volume involves the repeal or modification of Section 230 of the Communications Decency Act” coupled with a drastic curtailment of the protections for the right to speak anonymously online.  Not having read the whole book yet, I can't vouch for the accuracy of Fish’s summary.

According to Fish, “Saul Levmore (Nussbaum’s co-editor) suggests that immunity might be conditioned on the willingness of a provider either to take down a message after notice of its falsity or defamatory character has been given, or 'to enforce non-anonymity' and thus open the way for an injured party to seek redress. The law, writes Anupam Chander, 'should allow the individual to find information to lead her to the person who committed the privacy invasion.'”

If Fish accurately portrays their essays as using these theories to curtail section 230, then Saul Levmore and Anupam Chander, and the other authors to whom Fish attributes the desire to wipe out section 230, haven’t taken a careful look at what the law is now.   Fish plainly hasn't.

Will Cars of the Future Prevent Drunk Driving?

The Washington Post reports that

Researchers funded by auto manufacturers and federal safety regulators are working on sensory devices - to be installed as standard equipment on all new vehicles - that would keep a vehicle from starting if the driver has had too much to drink. ... The new technology would not require that the driver blow into a tube, like the interlock devices some states require after drunken-driving convictions. Instead, either a passive set of sensors permanently installed in the vehicles or touch-sensitive contact points on a key fob or starter button would immediately register the level of alcohol in the bloodstream.

The car industry says that the technology could be on the market in 5 to 7 years. But whether it will be marketable that soon depends in large part on cost (which could affect the industry's desire to install the technology) and consumer acceptance.

Massachusetts SJC Voids Foreclosure Sales with Bad Transfers

The Massachusetts Supreme Judicial Court today released its opinion in U.S. Bank v. Ibanez.  In two related mortgage cases, the SJC voided nonjudicial foreclosure sales because the securitized trust selling the homes did not have a valid chain of title to the mortgages.  The decision includes three key holdings that will have a broad impact on nonjudicial foreclosures.

The trustees in both cases claimed that the pooling and servicing agreement, taken together with the blank mortgage assignment prepared by the record mortgage holder, were sufficient.  The SJC explicity rejected the theory of "bearer mortgages":

We have long held that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void; we do not regard an assignment of land in blank as giving legal title in land to the bearer of the assignment.

Of course, the foreclosing servicer could have avoided this problem by filling out the blank assignment and recording it BEFORE the foreclosure sale, but did not find it expedient to do so.

Second, the court held that in Massachusetts at least, the mortgage does not literally follow the Note.  In other words, the fact that the trusts claimed to hold the mortgage Notes in question did not mean that they could foreclose without having a valid mortgage assignment.  Owning the Note means only that the trusts were entitled to sue for an assignment of the mortgage from its current holder.

Finally, the SJC held that a mortgage assignment cannot be retroactive, i.e. cannot be executed and delivered after a foreclosure sale to validate the sale. 

The Court also declined the banks' unusual request to make the ruling prospective only:  "The legal principles and requirements we set forth are well established in our case law and our statutes. All that has changed is the plaintiffs' apparent failure to abide by those principles and requirements in the rush to sell mortgage-backed securities."

Massachusetts High Court Voids Foreclosures For Lack Of Proper Documentation

Just a few hours ago, the Massachusetts Supreme Judicial Court voided foreclosures by megabanks U.S. Bancorp and Wells Fargo because neither could document title to the properties. As the New York Times explains:

In a ruling that may affect foreclosures nationwide, the Massachusetts high court has voided the seizure of two homes by Wells Fargo & Company and US Bancorp after the banks failed to show that they held the mortgages at the time of the foreclosures. Friday’s decision by the Supreme Judicial Court of Massachusetts, which upheld a lower court ruling, is among the earliest to address the validity of foreclosures conducted without full documentation. That issue prompted an uproar last year that led lenders like Bank of America, JPMorgan Chase and Ally Financial to temporarily stop seizing homes. Courts in other states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.

Read the Supreme Judicial Court's ruling here. A concurring Justice began his opinion by referring to "the utter carelessness with which the plaintiff banks documented the titles to their assets."

Efforts to Repeal Dodd-Frank Start

Michele Bachmann, Republican of Minnesota, seems to be spearheading the effort.  Story here.

Pennsylvania Appellate Court Embraces First Amendment Protections for Anonymous Speech

by Paul Alan Levy

In a ruling yesterday, the Pennsylvania Superior Court has embraced the majority standard applied by state and federal courts across the country to decide whether a plaintiff in a defamation or other lawsuit should be able to identify the anonymous authors of speech over which the plaintiff wants to sue.  The Court therefore held that, on the record of the case, former Scranton City Council President Judy Gatelli could not identify constituents who published scathing criticisms of her conduct in office on a message board attached to the “Doherty Deceit” web site maintained by Scranton resident Joseph Pilchesky.

In an opinion by Judge Robert A. Freedberg, the court decided that before the right of anonymous speech can be taken away, the plaintiff has to show that she has a realistic chance of succeeding in the lawsuit by presenting sufficient evidence to defeat a motion for summary judgment.  Moreover, the court should apply an explicit balancing test that considers both the interests of the would-be plaintiff and the interest of the anonymous speaker to decide whether there are any special considerations, such as a danger of retaliation, or the particular gravity of the accusations, that warrant protecting the speaker from disclosure or letting the lawsuit go forward on the equities of the case.

Applying this standard to the facts of this case, the court ruled that although the trial judge had properly ensured that the anonymous speakers received notice of the subpoena to identify them, and a chance to protect their anonymity, the judge had not required sufficient proof that the adverse statements had actually harmed her, and had not applied the required balancing test.  The court stressed that a conclusory affidavit averring only that the allegedly defamatory statements harmed the plaintiff’s reputation in the community would not be sufficient.

Public Citizen had represented several of the Doe speakers at an earlier stage of the case.  Although the trial judge had quashed the subpoena to identify each of Public Citizen’s clients, and although Gatelli did not appeal the ruling in favor of Public Citizen’s clients, we filed a brief laying out the proper standard for adjudicating challenges to subpoenas to identify anonymous Internet speakers, which the Superior Court largely adopted.  We indicated that, in our judgment, at least some of the Does at issue on appeal had made statements that could easily be found to be defamatory and hence could support enforcement of the subpoena if there were evidence that they were false and caused damage.  Other Does, we argued, had simply expressed derogatory opinions in graphic or hyperbolic terms that should not afford a proper basis for an elected official to sue her constituents.

An interesting coincidence —the author of the opinion, Judge Robert Freedberg, replaced Judge Joan Orie Melvin on the Superior Court after she was elected to the Pennsylvania Supreme Court.   Judge Melvin was the plaintiff in one of the earliest Doe cases to reach the appellate level, Melvin v. Doe, although the issue squarely decided in that appeal was that a Doe can appeal an order enforcing a subpoena to identify him even though such orders are interlocutory.

Failure to Include Brake Override Technology Becomes Primary Focus of Toyota Sudden Acceleration Suits

A couple weeks ago, I posted about an individual lawsuit in which the parents of a woman killed in a car crash claimed that the daughter's Toyota suddenly accelerated and forced her car into oncoming traffic. The suit blames the sudden acceleration defect, but, as I noted, it also makes a more far-reaching design-defect argument: that the car should have been equipped with a device that shuts off the accelerator when the brakes are applied -- so-called "brake override" technology.

Now, the LA Times is reporting that, more generally, "[a]ttorneys suing the automaker [have] change[d] their strategy, [and are] no longer planning to build their cases around potential flaws in electronic throttle control systems. In a tactical shift, lawyers suing Toyota Motor Corp. over sudden acceleration are building their cases around the automaker's resistance to installing a brake system that they claim would have prevented deaths and injuries." If I understand this strategy shift correctly, the plaintiffs' cases might not depend on why the vehicle suddenly accelerated -- as between a Toyota defect or driver error. If the brakes and accelerator were operating simultaneously, the car was defective because it did not have a system that would have overriden the accelerator.