Consumer Law & Policy Blog

Who Are the 47%?

The Center on Budget and Policy Priorities answers that question in some detail. For an overview check out the chart below.

Is the LSAT Administered in Violation of the Americans With Disabilities Act?

Yes, according to the U.S. Department of Justice and the California Fair Employment Department. They have sued the Law School Admission Council claiming that it has violated the Americans Disabilities Act in administering the Law School Admissions Test. Karen Sloane explains here. Here's an excerpt:

A 29-year-old congressional aide claims his dyslexia impairs his ability to read and write. A San Jose, Calif., woman who is paralyzed in all four limbs says she cannot write without a brace. A sports marketer from Maryland alleges that pain from her scoliosis and attention deficit hyperactivity disorder make it difficult to concentrate. The three reside in different parts of the country and have different physical or cognitive disabilities, but they have one thing in common: Each claims that the Law School Admission Council violated their rights by denying them extended time on the Law School Admission Test. They are among the 22 would-be LSAT takers on behalf of whom the California Department of Fair Employment and Housing and the U.S. Department of Justice have filed suit, alleging that the council's accommodations process violates the Americans With Disabilities Act.

Tax Policy And Kids' Learning Abilities

A new empirical economic study (go here and here) by Alexander Gelber and Matthew Weinzierl says that some tax policies that put more money in the pocket of low-income U.S. parents are associated positively with their children's academic abilities. This study comes at an interesting time given the recent debate about whether there should be some minimal level of income taxation for all Americans (or at least all U.S. wage earners).

This Gelber-Weinzierl study looks at the earned income tax credit (EITC), the principal U.S. tax policy that benefits low-income working families. The EITC is one of the few income tax credits that is refundable -- that is, certain taxpayers entitled to the credit not only lower their tax liabilty, but get the EITC back from the government even when the amount of the credit they are due exceeds what they have paid in taxes. And, the EITC operates as a negative income tax -- that is, many low-income earners entitled to the EITC receive more in the refundable credit than they have paid in taxes. In fact, low-income earners can be eligible for the EITC when, because of their low income, they have paid no income taxes at all. If we were to force all U.S. earners to owe some income tax, we would have to eliminate this important aspect of the EITC.

The EITC lifts more families out of poverty than any other social program, including food stamps and various housing subsidies.

Morgan Stanley Sued Over Racially Discriminatory Home Lending Policies in Detroit

As described in this article by Emily Badger:

In the years leading up to the housing crash, public data suggest that black would-be homeowners in Detroit were 70 percent more likely than white borrowers to receive a risky subprime loan from the now-defunct lender New Century Mortgage Company. This is the central statistic embedded in a 70-page lawsuit filed Monday in New York against Morgan Stanley, the investment bank that went on to purchase a large share of those loans for repackaging in mortgage-backed securities.The suit, filed by the ACLU and the National Consumer Law Center, alleges that a kind of "reverse-redlining" became the norm in Detroit. Fifty years ago, discriminatory housing policies prevented many blacks from obtaining home mortgages. Barely five years ago, this suit suggests that a different kind of racial discrimination was taking place in Detroit: Predatory lenders couldn’t approve enough high-risk loans to black borrowers, increasing Morgan Stanley’s profits and disproportionately leaving many of these black homeowners in financial ruin.

Posner on Wealth, Luck, and Taxing the Rich

Read about it here. Check out this excerpt:

The economic significance of the disagreement [between conservatives and liberals about the role of luck in financial success] has mainly to do with taxation. Taxing success that is attributable to pure luck does not have disincentive effects, and so is a cheap away of financing government. Taxing success that is attributable to hard work may induce a substitution toward leisure, reducing money incomes, and taxing financial success attributable to talent may induce some talented people to substitute activities that generate substantial nonpecuniary income (apart from leisure), which may not be socially as productive as business. Beyond the economic concern, however, is an ethical one that is particularly acute in a society, such as ours has become, in which there is great inequality of income and wealth. I don’t find any merit to the celebration of the tycoon by Ayn Rand and her followers. I think that ultimately everything is attributable to luck, good or bad. Not just the obvious things, like IQ, genes that predipose to health or sickliness, the historical era and the country in which one is born, the wealth of one’s parents, whom one happens to meet at critical stages of one’s life and career, one’s height and looks and temperament, to the extent genetic, and one’s innate propensity to risk or caution (that is an exceptionally important factor); but also the characteristics that cause a person to make critical decisions that may turn out well or badly, characteristics that really are derivative from some of the previously noted “luck” characteristics. The decision-determining characteristics include intelligence, imagination, attitude toward risk, and personality characteristics such as aggressiveness, maladjustment, indolence, and having a low or high personal discount rate (how future-regarding one is or is not). Talent is luck but so is the propensity for working hard (often the consequence of a compulsive personality) or not working hard. In short, I do not believe in free will.

Jenzabar's Trademark Appeal Is Denied

by Paul Alan Levy

In a decision issued this morning, the Massachusetts Appeals Court affirmed the dismissal of the trademark claims brought by Massachusetts software company Jenzabar against documentary filmmaker Long Bow Group, claiming that the use of the name “Jenzabar” in the keyword meta tag and the title tag for a web page about Jenzabar infringed and diluted its trademark.  (We represented the film company).  The decision serves as a gratifying confirmation of how baseless Jenzabar’s claims are.  Even indulging Jenzabar’s most far-fetched assumptions, the court upheld a summary judgment by finding that no rational juror could possibly find a likelihood of initial interest confusion.  And the opinion contains much that will be useful in defending Internet critics in the future.  The emphasis on the need for evidence that confusion is probable, not just possible; the refusal to consider the possibility of confusion by merely careless consumers; and the insistence that a finding of initial interest confusion requires evidence of a deliberate bait-and-switch and an intent to confuse, not simply an intent to use a trademark to identify the subject of criticism, will all help other Internet speakers fend off suits intended more to punish them for criticism than to vindicate the objectives of the trademark laws. The court’s firm rejection of Jenzabar’s argument, that the mere fact that a certain number of Internet users reached a critical web site as a result of seeing a reference to the trademark holder in a search engine result is itself evidence of actual confusion that supports a claim of initial interest confusion, will be similarly useful.  Most important, the court made clear that plaintiffs cannot force critics into an expensive trial just by dumping mountains of paper on the appeals court and arguing that there must be a triable issue of fact in there someplace.  

Phoenix NAP’s Response to Kasim Reed Shows Its Unreliability as a Data Center

by Paul Alan Levy

The recent response by PhoenixNAP to a takedown demand from Kasim Reed, the mayor of Atlanta Georgia, showed its Internet customers that it cannot be counted on to stand up for their rights.   Reed was unhappy that Lipstick Alley, a gossip site with particular traction among African-American women, carried an exchange of messages about Reed’s alleged relationships with several different women, including some of his cabinet.  But instead of taking his complaints directly to Lipstick Alley, his lawyer sent a takedown notice directly to PhoenixNAP, threatening to hold Lipstick Alley and its hosting service liable for any “further republication” of the allegedly defamatory statements which, his lawyer claimed, would be “knowing publication of untrue statements.”

Unlike the recent case of hosting firm ServerBeach, which could point to a real possibility of liability for the hosting of copyrighted content on a customer blog as a justification for ensuring the removal of content claimed to violate the copyright laws, PhoenixNAP could be confident of total protection against liability for allegedly defamatory content under section 230 of the (otherwise unconstitutional) Communications Decency Act.  As often discussed here, that federal statute is a crucial aspect of the system of online free speech, protecting the providers of online interactive computer services from being sued for content that others place using their facilities.  Under section 230, an unhappy target of criticism has to sue the wrongful speaker, instead of exercising a heckler’s veto by suing online providers that cannot possibly judge who is right and who is wrong in a particular instance.  (And this is not the first time that a McKenna Long lawyer who specializes in representing politicians has sent a demand letter on behalf of a Georgia politician that utterly ignored section 230).

The Constitutionality of the Contraception Coverage Mandate in the Affordable Care Act

The contraception coverage mandate in the Affordable Care Act is important to many consumers. Some of the mandate's opponents claim that it violates the First Amendment's Religion Clauses. This article by Brigham Young University law professor Frederick Gedicks concludes that the mandate is constitutional.

American Banker Report: Four Senate Races Critical for Banks

Here.

Does Taxing Unhealthy (In This Case, Fatty) Foods Improve Health?

This short piece in the British Medical Journal, focusing on a fatty-food tax in Denmark, says that the evidence is equivocal. One problem is that consumers may respond to a fatty-food tax by substituting cheaper (but still fatty) foods for more expensive fatty foods. Another problem, believe it or not, is that consumers may buy their fatty foods in other countries that don't impose a fatty-food tax (just as consumers might do the same in the U.S. if one state has a fatty-food tax but a neighboring state does not). But there's some evidence that consumers will eat healthier foods when fatty foods are taxed. The authors conclude that more study is needed.

We've posted earlier on efforts in the U.S. to impose taxes on sugary sodas.