CL&P Blog

Joint Corporate-Republican Effort to Kill Consumer Product Safety Database in Full Swing

The Washington Post reports this morning that House Republicans are attempting to kill the new, publicly-available Consumer Product Safety Commission product safety database by cutting off its funding. The Post explains that

As part of the spending bill that passed the House on Feb. 19, Rep. Mike Pompeo (R-Kan.) won support for a measure to withhold money to implement the system, which is set to launch March 11. The database, which was welcomed by consumer advocates, would make public thousands of complaints received by the Consumer Product Safety Commission each year about safety problems with products, from table lamps to baby strollers.

Manufacturers claim that the database will be "filled with inaccurate or fictitious claims," but that assertion seems baseless:

CPSC officials say they have built in safeguards to prevent such abuse and have balanced the interests of consumers and manufacturers. The agency had a "soft launch" of the database [earlier this month] and, of the 900 complaints that were logged, four were determined to be inaccurate, [CPSC Chair Inez] Tenenbaum [pictured above] testified before Congress this month.

There's a reason why 2008 reform legislation sought to make safety information public. Under the prior law . . .

The CPSC collects reports of defective products from a wide range of sources, including consumers, health-care providers, death certificates and media accounts. But most of that information is shielded from public view. The only way for consumers to access safety complaints is to file a public-records request with the CPSC. The agency is then required by law to consult with the manufacturer before releasing information about products, and the company can protest or sue to stop disclosure. If the agency thinks a dangerous product should be pulled from the market, it must negotiate a recall with the manufacturer, a process that used to take years and now takes weeks or months. Meanwhile, unwitting shoppers may continue to buy the item.

 

 

Are the Better Business Bureau's "A" Ratings a fraud?

by Paul Alan Levy        

David Segal's  "Haggler" column today raises serious questions about whether the Better Business Bureau gives its own members an easy pass, in return for little more than a check.

 

UDAP Statutes Used Against Books

by Jeff Sovern

Kevin Jon Heller of the Opinio Juris blog has a post about the troublesome practice of using UDAP statutes against book authors and publishers in connection with the content of their books.  Heller writes about the suit against former President Jimmy Carter and the publisher of his book Palestine: Peace Not Apartheid for, according to the plaintiffs, publishing inaccurate information about Israel.  This strikes me as a perversion of deceptive trade practices statutes which are intended to prevent deceptive speech in selling products, rather than claims in books.  It obviously also raises First Amendment issues; UDAP statutes are constitutional because states can regulate commercial speech within boundaries, but this speech is not commercial.  The appropriate response to inaccuracies in books is more speech, not a UDAP claim.  (HT: Charles Bobis)

NCLC Launches New Working Cars for Working Families Website

The National Consumer Law Center has launched this new website called "Working Cars for Working Families." Here's how NCLC explains it:

A safe and reliable car is essential to the success of most working families.  Child care, jobs, groceries, medical appointments, and so many other everyday tasks are often out of reach for families without a car. Yet, buying, financing, and keeping a reliable car is fraught with dangers for everyone and simply not possible for some families. Working Cars for Working Families is fighting to ensure that families get a fair deal when buying and financing a car and that the lack of a car does not stand in the way of families’ ability to become economically successful. We seek to bring about policy reform to bring transparency and fairness to the markets for used cars and car finance. We also promote policy and practice solutions to help non-profit ownership programs that help struggling families get a car.

Jim Hawkins Paper on the CFPB and Regulation of Fringe Credit Products

Jim Hawkins of Houston has written The Federal Government in the Fringe Economy, 14 Chapman Law Review (2011).  Here's the abstract:

This paper is a contribution to Chapman Law Review’s symposium, From Wall Street to Main Street: The Future of Financial Regulation. It explores the Dodd-Frank Act’s creation of the Consumer Financial Protection Bureau and specifically assesses the Bureau’s new power to regulate alternative financial services providers like payday lenders, rent-to-own companies, pawnshops, and auto title lenders.

I advance two claims. First, I argue that the Consumer Financial Protection Act gives broad, novel powers to the Bureau to regulate fringe credit. Part I describes the scope of the Bureau’s power under the Act, demonstrating how the Act covers the vast majority of fringe credit transactions. Part II surveys the substance of the Act to reveal the surprising emphasis the Act places on the Bureau governing fringe banking transactions. The scope of the Bureau’s authority coupled with its substantive mandate to confront problems in fringe credit markets signal the new power and interest the federal government has taken in the fringe economy.

Second, I argue that most of the justifications that have been offered for the Bureau regulating fringe credit are flawed. To understand why people have contended the Bureau should govern the fringe economy, I surveyed the two most important academic articles arguing in favor of the Bureau, and I conducted an empirical study to measure the frequency of the rationales for the Bureau regulating fringe credit in media, government press releases, and testimony to Congress. Part III reports the results of the study, and it assesses the different rationales for the Bureau intervening in fringe credit markets.

Should the Judicial Ethics Code Apply to Supreme Court Justices Like It Does To Other Federal Judges

The Washington Post explains here that 100 law professors have asked Congress to subject Supreme Court justices to a judicial ethics code like the one that all other federal judges apply to themselves. One concern is the recent attendance of Supreme Court justices at events sponsored by conservative groups:

The group's appeal on Wednesday, in a letter to the House and Senate Judiciary committees, comes after recent controversies involving travel and appearances at political events by several Supreme Court justices, including Clarence Thomas and Antonin Scalia. . . . Thomas and Scalia have been criticized by a public interest group for attending private political meetings sponsored in January 2007 and 2008 by David and Charles Koch, conservative billionaires who made large contributions during last year's election and have financially backed the tea party movement.

 

U.S. Government and Big Tobacco in Fight Over Corrective Advertising

For years, the tobacco companies lied about tobacco. They said it wasn't harmful or that the evidence of its health effects wasn't conclusive, when they knew it caused cancer and a range of other diseases. They said that tobacco wasn't addictive when they knew it was. In the government's case against the tobacco companies, U.S. District Judge Gladys Kessler found in 2006 that the companies had deceived the public. As explained here, now the tobacco companies and the U.S. Department of Justice are battling over the kinds of corrective advertising Judge Kessler should order. Here are a few of the 14 ads that the government wants:

We falsely marketed low tar and light cigarettes as less harmful than regular cigarettes to keep people smoking and sustain our profits.

For decades, we denied that we controlled the level of nicotine delivered in cigarettes. Here's the truth. ... We control nicotine delivery to create and sustain smokers' addiction, because that's how we keep customers coming back.

We told Congress under oath that we believed nicotine is not addictive. We told you that smoking is not an addiction and all it takes to quit is willpower. Here's the truth: Smoking is very addictive. And it's not easy to quit.

Just because lights and low tar cigarettes feel smoother, that doesn't mean they are any better for you. Light cigarettes can deliver the same amounts of tar and nicotine as regular cigarettes.

The tobacco companies say that court imposition of the government's proposal would violate their constitutional rights and a prior court of appeals ruling in the case.

Important New Treasury Rule Protects Social Security, Other Federal Benefits in Bank Accounts

by Jon Sheldon

An extremely important federal rule issued today (76 Fed. Reg. 9939) strengthens protections for Social Security and other federal benefits deposited in consumers' bank accounts. The “interim final” rule, which will take effect on May 1 but is still open for public comment, will limit creditors’ ability to freeze and take funds from accounts that contain Social Security, Supplemental Security Income (SSI), VA and other federal benefits.

Federal law makes these funds immune from seizure by creditors. But in practice creditors frequently obtain court garnishment orders and banks then freeze bank accounts containing protected funds. A beneficiary may be unable to access urgently needed funds for weeks or months. Often, the paperwork and procedures needed to end an illegal freeze prove too daunting for a recipient, so that a bank turns over supposedly “untouchable” funds to a creditor. The new rule requires all banks to determine whether an account contains protected funds. If so, the bank is required to protect two months of benefit payments from garnishment or even from a temporary freeze.

Comments on the new rule may be filed by May 24, 2011, by going to www.regulations.gov and entering “3206-AM17” in the keyword field. The NCLC contact on this rule is Margot Saunders, (202) 452 6252 x 104; (304) 553 1123 (cell phone); msaunders@nclc.org.

Supreme Court Rejects Preemption Defense, 8-0, in Product Defects Case

Good news today from the U.S. Supreme Court.

In a decision issued this morning in Williamson v. Mazda, the Court unanimously held that state-law damages claims seeking to hold an automaker accountable for its vehicle-design choices were not barred by federal regulation of motor vehicles. Justice Breyer wrote the opinion for the Court, which was joined by the Chief and Justices Scalia, Kennedy, Ginsburg, Alito, and Sotomayor; Justice Sotomayor wrote a concurring opinion and Justice Thomas concurred only in the judgment. (Justice Kagan was recused.) 

Justice Thomas's short concurrence is a particularly interesting read for those interested in the development of preemption doctrine. Building on his pathbreaking opinions in Wyeth v. Levine and other recent preemption cases, Justice Thomas takes the position that the plain text of the savings clause in the relevant statute (the Safety Act) should have governed the case, thus obviating the need to engage in any consideration of so-called purposes-and-objectives preemption. Justice Thomas's distinctive, textualist jurisprudence in this area may tip the balance in other preemption cases pending this term, including perhaps AT&T Mobility v. Concepcion.

Thanh Williamson was killed while riding in the second-row aisle seat of a Mazda minivan when it was struck head on by another vehicle. Her seat was equipped with a lap-only seatbelt, which caused fatal internal injuries when the impact of the collision caused her body to jackknife over the belt. After her death, Mrs. Williamson’s family brought suit against Mazda, alleging that the van was defective because it lacked a lap/shoulder belt for the aisle seat. When the minivan was manufactured and sold, the relevant federal safety standard allowed but did not require that seat to have a lap/shoulder belt.

The question before the Court was whether the Williamsons’ damages claims were barred by implied conflict preemption, on the theory that holding Mazda accountable for failing to install a lap/shoulder belt would pose an obstacle to the federal safety standard in effect at the time. In a unanimous decision, the Court held that the claims were not preempted. The case will now return to the trial court, where the Williamsons will have an opportunity to litigate their case on the merits.

One of my colleagues here at Public Citizen Litigation Group, Allison Zieve, helped to secure this important victory in the fight against broad theories of preemption, which are used to deny consumers access to the civil justice system. The Williamsons’ lead counsel in the Supreme Court was Martin Buchanan of San Diego. As co-counsel in the Supreme Court, Allison worked closely with Martin on briefing and argument preparation. Congratulations to Martin on such a resounding victory in his first appearance before the U.S. Supreme Court!

District Court for the District of Columbia Rejects Challenge to Health Care Law's Insurance Mandate

In this 64-page opinion issued yesterday, Judge Gladys Kessler of the U.S. District Court for the District of Columbia has upheld the insurance mandate of the Affordable Care Act against a constitutional challenge. I believe that makes the district court decision scorecard 3 to 2 (with 3 courts holding that the mandate's passage was within Congress's Commerce Clause power and 2 holding that it wasn't). The Blog of the Legal Times has this write-up on Judge Kessler's decision, including this interesting description of the plaintiffs:

The plaintiffs include a 62-year-old self-employed resident of North Carolina, [lead plaintiff] Margaret Peggy Lee Mead, who has not had health insurance for about 18 years. Mead and two other plaintiffs intend to refuse medical service for the remainder of their lives. Two [other] plaintiffs in the suit said they want to pay for medical services with their own money. Three of the plaintiffs, including Mead, believe “God will provide for their physical, spiritual and financial well-being,” Kessler wrote.

This description of the plaintiffs suggests that the mandate injures them for standing purposes. Libertarians and/or religious adherents who don't want medical care, and are willing to die if necessary from an infected ingrown toe nail, or who just want to go without insurance and (try to) pay for medical care out of their own pockets, would suffer pocketbook injury if they were subject to the mandate's requirement that they either buy insurance or pay a tax or fine.