Consumer Law & Policy Blog

Billionaires for Romney

Rolling Stone has this useful piece on the relationship between the Supreme Court's Citizens United decision and efforts by 15 billionaires to use their wealth to elect Mitt Romney. The article includes a five-paragraph introduction and then a biographical paragraph on each of the billionaires. Here's an excerpt:

Presidential politics has always been a rich man's game. But now, thanks to the Supreme Court ruling in Citizens United that upended decades of limits on campaign donations, financing a presidential race is the exclusive domain of the kind of megadonor whose portfolios make Mitt Romney look middle-class. "I have lots of money, and can give it legally now," Texas billionaire and top GOP moneyman Harold Simmons recently bragged to The Wall Street Journal. "Just never to Democrats." * * * The undisputed master of Super PAC money is Mitt Romney. In the primary season alone, Romney's rich friends invested $52 million in his Super PAC, Restore Our Future – a number that's expected to more than double in the coming months. This unprecedented infusion of money from America's monied elites underscores the radical transformation of the Republican Party, which has made defending the interests of 0.0001 percent the basis of its entire platform. "Money buys power," the Nobel Prize-winning economist Paul Krugman observed recently, "and the increasing wealth of a tiny minority has effectively bought the allegiance of one of our two major political parties." In short, the political polarization and gridlock in Washington are a direct result of the GOP's capitulation to Big Money.

Rob Weissman on the Facebook IPO and the Need for More Regulation of Wall Street

Here.

FTC Settlement with Skechers

Read this nice post from Arnold & Porter's Consumer Advertising Law Blog about the Federal Trade Commission's settlement with the sneaker company Skechers over its goofy celebrity ads claiming that wearing its "toning " shoes helps you lose weight and tighten your butt. Skechers has also settled with the states.

Supreme Court grants petition in FDCPA case

    The Supreme Court today took a case for next Term that raises an issue under Fair Debt Collection Practices Act. (Disclosure: I am Supreme Court counsel for the petitioner.) That Act generally prohibits debt collections from communicating with third parties about a consumer’s debt. Plaintiff Marx sued GRC, a debt collector, for sending a fax to her employer that included information concerning a debt. A panel of the Tenth Circuit Court of Appeals held that the fax did not constitute a communication within the meaning of the FDCPA because the fax did not indicate that it related to a debt. The court also upheld an award of costs against Marx.

    The cert petition raised two questions. First, FDCPA provides that, “[o]n a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” 15 U.S.C. § 1692k(a)(3). Federal Rule of Civil Procedure 54(d) provides that, “[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.” The question presented in the petition is whether a prevailing defendant in an FDCPA case may be awarded costs where the lawsuit was not “brought in bad faith and for the purpose of harassment.” Second, the petition sought certiorari on the question whether the FDCPA’s strict limits on communications with third parties cease to apply when a debt collector, contacting a third party in connection with the collection of a debt, does not indicate the reason for the communication.

    The Supreme Court granted the petition only as to the first question. The question is more "cert-worthy" than the second one because the Ninth and Tenth Circuits are split on the answer. At the appellate level, in support of a petition for rehearing en banc (which was denied), the Consumer Financial Protection Bureau filed an amicus brief supporting the plaintiff's view, and we hope that the government will file again at the merits stage of the case. The grant provides a chance to correct an appellate decision that may deter debtors from bringing cases to challenge abusive debt collection practices, because many debtors will not be able to risk having to pay the defendant's costs if the defendant prevails in the suit although the debtor brought the case in good faith.

    At the same time, I am disappointed that the Court denied the petition as to the second question, regarding the scope of "communications." On that question, the Tenth Circuit's decision undermines many important FDCPA protections.

Nice coverage of Public Citizen's latest consumer case

Here.

Provides a thorough discussion of the case we filed last Thursday, and situates it within the context of a dangerous pro-business trend toward shutting consumers out of court.

The Biggest Myth of Taxation

According to Bruce Bartlett, it is "the complete and total nonsense" that raising taxes on people with high incomes will slow economic growth (or, put the other way around, that lowering taxes on high incomes will stimulate economic growth). Watch Bartlett here or click on the embedded video below:

 

Sunscreen and FDA (Non-)Regulation

The Environmental Working Group (EWG) has come out with its 2012 Sunscreen Guide, which seeks to help consumers pick the best sunscreens. As Mother Jones reports here, people who use sunscreen are more vulnerable to cancer-inducing sun damage, among other reasons because using sunscreen gives them a false sense of invulnerability. According to EWG, one problem is FDA's regulatory failure:

The [2012 EWG] guide comes less than a week after the FDA pushed back the compliancy requirement for a news set of guidelines (33 years in the making) meant to urge manufacturers to more clearly label their products and toss out misleading terms like "sweatproof" and "sunblock." But even the now-delayed FDA guidelines, says EWG, fall short in some important ways. For starters, the FDA's new guidelines fail to address the risk of trusting a sunscreen with an SPF higher than 50. For sunscreens that boast SPF 100, for instance, "there's no evidence they provide additional health benefits," says David Andrews, a spokesperson for EWG. The higher value "lends to a sense of invincibility, so that people spend more time in the sun longer," Andrews argues.

Are Too Many People Going to College (and Racking Up Too Much Debt)?

Here.

Student Loan Debtors Are Often College Dropouts

We've been covering the issue of exploding student loan debt, which now exceeds $1 trillion. (Yes, that's $1 trillion.) About 1/4 of all student loan debtors are in default. And now, the Washington Post reports that the problem is exacerbated by the increasing inability of student loan debtors to complete their studies (and, presumably, increase their chances of getting a job that will help them pay back their student loans). In 2001, 23% of student loan debtors had dropped out. In 2009, that figure was 29%. At four-year for-profit colleges, the 2009 rate was 54%, up from 34% in 2001.

Some Prescription Drug Costs Soaring

The typical two-tiered prescription drug coverage plan charges, say, $30 for a 30-day supply of the branded drug and $15 for the generic. But, as explained here, major insurers -- such as the Blues and Aetna -- now have added a third tier for  expensive "speciality" drugs that treat cancer, rheumatoid arthritis, and multiple sclerosis, to name a few. The co-pays are very large. Proposed state legislation would limit patient payments, but the insurers are saying that's a bad idea because they'll just have to raise everyone's premiums, and, besides, in 2014, the Affordable Care Act will limit patients' total out-of-pocket obligation. (And if state limits are enacted, won't the insurers argue that they are federally preempted by ERISA?)