Consumer Law & Policy Blog

The Freedom of Information Act in President Obama's First Term

by Brian Wolfman

On his first full day in office, President Obama issued a memorandum on the Freedom of Information Act (FOIA). He quoted Louis Brandeis's famous line that "sunlight is said to be the best of disinfectants" and directed federal agencies to "adopt a presumption in favor of disclosure." Less than two months later, Attorney General Holder followed suit and "strongly encourage[d] agencies to make discretionary disclosures of information." "An agency," he said, "should not withhold records merely because it can demonstrate, as a technical matter, that the records fall within the scope of a FOIA exemption."

So, has the Obama Administration kept its promise of more openness? We posted in March 2010 that, according to a review conducted by the Associated Press, annual FOIA reports "filed by 17 major agencies found that the use of nearly every one of the law's nine exemptions to withhold information from the public rose in fiscal year 2009." The results of the AP's review were consistent with another report from the National Security Archive showing that about a year into the new administration most federal agencies had not yet implemented the Obama and Holder memoranda.

Attorney General Holder's memorandum stated that the Department of Justice would “defend a denial of a FOIA request only if (1) the agency reasonably foresees that disclosure would harm an interest protected by one of the statutory exemptions, or (2) disclosure is prohibited by law.” The memorandum was taken by some openness advocates as evidence that the Department of Justice would defend FOIA litigation less aggressively than had the Bush Administration.

But a March 2012 report by the FOIA Project of the Transactional Records Access Clearinghouse (TRAC) at Syracuse University concluded that

Available evidence indicates that no affirmative steps needed to implement the new [Holder memorandum] defensive standards were ever taken [by the Department of Justice]. Further, there is little evidence that these new standards have made any impact on actual Department of Justice practices in defending federal agency withholding. In short, the new defensive standards seem to have become simply empty words on paper.

And, now, a new TRAC report issued on December 20 finds that there's been more FOIA litigation in the Obama Administration than in the prior administration. This may mean that executive agencies have been no more open (and perhaps less open) during the Obama Administration than they had been during the Bush Administration.

But more detail on the types of cases litigated over the relevant periods is needed before accurate conclusions can be drawn. One lawyer quoted in the TRAC report suggests that agency responses to FOIA requests have slowed during the Obama Administration because of funding cuts and, so, more lawsuits are being brought because “more people just got tired of waiting.” (FOIA generally requires that an agency respond to a request within 20 business days, but many agencies are seriously backlogged, and so some suits are filed even before the agency has responded to the request.)

 

Plaintiffs and Toyota Agree to Sudden-Acceleration Settlement

by Brian Wolfman

The Impact Litigation Journal reports that

The parties have announced a settlement in the Toyota sudden acceleration multi-district litigation pending in a Santa Ana federal court. Under the terms of the settlement, which must now receive judicial approval, Toyota will install a brake-override system in some 3.25 million vehicles in addition to paying cash compensation, which will be measured by the diminution in the value of the cars that were the subject of the lawsuit. As many as 16 million current and former Toyota owners are eligible to participate in the settlement.

If approved by the court, this settlement will be one of the largest automotive class-action settlements in history. To me, the interesting part of the settlement is the recall relief that requires Toyota to install brake-override systems in class members' cars.

Read the proposed settlement. Exhibit 1 to the agreement describes the notice program aimed at alerting covered Toyota owners to the deal. Exhibit 10 explains which Toyota models are covered by the deal. Exhibit 16 explains that the amounts of money available for distribution to some individual class members will differ, among other reasons, based on the class member's state of residence (because, the settling parties say, the relevant law differs among the states).

As described in Exhibit 15, the settlement also requires that Toyota

fund scientific research by leading U.S. universities into the development of new active safety technologies and/or standards, as well as testing guidelines for emerging technologies ... . In addition, Toyota has agreed to fund a national multi-media and community-based public-education campaign, supported by scientific research, that works to inform, enhance and promote safer driving among consumers. The parties agree that these safety research and education programs are tethered to the nature of, and certain issues in, the Actions and further the interests of Class Members.

In this regard, note that the relevant federal regulator -- the National Highway Traffic Safety Administration (NHSTA) -- has said the underlying safety problem wasn't that Toyota cars accelerated out of the blue, but that drivers unintentionally accelerated when they meant to hit the brakes. We blogged earlier about lawsuits that claimed that cars should be equipped with brake-override technology that shuts down the accelerator when the brakes are applied. NHTSA is seeking a new federal regulation that would require all new cars and light trucks to include brake-override systems.

Gutierrez v. Wells Fargo Bank Reversed in Part

On Wednesday the Ninth Circuit gave Wells Fargo a belated Christmas present in Gutierrez v. Wells Fargo Bank, --- F.3d ----, 2012 WL 6684748 (9th Cir. 2012), vacating the injunctive and restitution relief ordered by the lower court. The district court decision had held Wells Fargo's procedures for ordering debit card withdrawals unfair and fraudulent under California law.  The procedures, which charged the highest amounts first regardless of whether they were incurred after charges for lower amounts, had the effect of maximizing the bank's fees.  Much of the Ninth Circuit's decision was based on preemption, though the panel did affirm the distict court's judgment that Wells Fargo violated California law by making statements that were likely to mislead depositors.  Bloomberg has more here and here is the Wall Street Journal's take.

Resolution of the Steubenville Defamation Case

by Paul Alan Levy

I am pleased to note that the parties to the defamation action in Steubenville, about which I blogged earlier this month, have resolved the matter in the very sensible manner to which my blog post pointed:  the young man whose nasty behavior spurred much of the commentary was allowed to apologize for his misconduct while proclaiming his innocence of the much more serious abuses of which some anonymous commenters had accused him, while the blogger acknowledged that there was no evidence of the protagonist's involvement in such abuses.

Sad to say, this is an instance in which not only the defense against subpoenas to identify anonymous posters, but the bringing of a defamation action itself, may have done some good.  A number of people involved in the situation have told me privately that it was not until they read my blog post and compared it to what they had read in the blog comments that they appreciated that some of the anonymous speakers may have gone just a bit too far.

ADDENDUM

This post was inadequate, as originally posted, for failure to acknowledge the key role played by Ken White over at Popehat -- he put out a call for lawyers to defend the speakers in this case, and sent several Does to Public Citizen.  And although I knew from counsel involved that they were in active discussions about ending the case, it was from his concluding post about the case that I learned that the settlement had been concluded. 

I can't say I agree with every one of Ken's conclusions about the case, but his role here was invaluable.

Airline Fees Make It Very Difficult to Comparison Shop Based on Price

by Brian Wolfman

We explained recently that airlines may be misleading consumers into paying add-on fees for seats by tricking consumers in thinking that most of the good seats are sold out when they really aren't. And we've covered the issue of airline fees and prices generally many times (go, for instance, here and here).

Now, read this AP story by Joan Lowy, which explains that the ubiquity of airline fees charged separately from the base travel price, and the failure of the airlines to provide fee information to on-line travel agents such as Orbitz, are making it very difficult for consumers to comparison shop on the basis of price. The Obama Administration is considering new regulations, and one Transportation Department regulation is under fire from the airlines in the courts.

Here's an excerpt from Lowy's article:

For many passengers, air travel is only about finding the cheapest fare. But as airlines offer a proliferating list of add-on services, from early boarding to premium seating and baggage fees, the ability to comparison-shop for the lowest total fare is eroding. Global distribution systems that supply flight and fare data to travel agents and online ticketing services like Orbitz and Expedia, accounting for half of all U.S. airline tickets, complain that airlines won't provide fee information in a way that lets them make it handy for consumers trying to find the best deal. * * * Now the Obama administration is wading into the issue. The Department of Transportation is considering whether to require airlines to provide fee information to everyone with whom they have agreements to sell their tickets. A decision originally scheduled for next month has been postponed to May, as regulators struggle with a deluge of information from airlines opposed to regulating fee information, and from the travel industry and consumer groups that support such a requirement. Meanwhile, Spirit Airlines, Allegiant Air and Southwest Airlines — with backing from industry trade associations — are asking the Supreme Court to reverse an appeals court ruling forcing them to include taxes in their advertised fares. The appeals court upheld a Transportation Department rule that went in effect nearly a year ago that ended airlines' leeway to advertise a base airfare and show the taxes separately, often in smaller print. Airlines say the regulations violate their free-speech rights.

Privacy Invasions That Also Discriminate

by Jeff Sovern

Regular readers of this blog will know that businesses use cookies, etc. to track consumer online behavior for marketing purposes. But what may be less well known is that businesses use the information they glean online to offer different consumers different prices.  A recent paper makes the point. See Jakub Mikians, László Gyarmati, Vijay Erramilli, & Nikolaos Laoutaris, Detecting price and search discrimination on the Internet (finding price differences based on the customer’s location and affluence). I wonder if such behavior might produce discrimination based on race, gender, etc.  If so, will Congress do for the internet what it did for credit lending in the Equal Credit Opportunity Act and other statutes: prohibit objectionable discrimination?

The Boca Raton Scam on Non-Profits Pops Up Again (Yet Another Name)

by Paul Alan Levy

This morning's Washington Post carries a report on a scam operation preying on non-profits, based in Boca Raton -- the scammers lure the credulous by using the name of a famous news personality, promising priceless exposure on PBS, then charge $23,400 for the privilege of having a short film created for that purpose. 

We litigated against a similar group of scammers a few years ago, and found that they would change their name every time the light of publicity was shined on them.  And each time the news personality, embarrassed to have the way in which his or her name was being associated with scandal, would withdraw and the scammers would recruit a new personality.

It will be interesting to learn whether "In Focus Martin Sheen" follows the same pattern -- and, indeed, whether the same folks are behind this new iteration of the same old ploy.

Prior Restraint Doctrine Protects Negative Yelp Review Against Preliminary Injunction

by Paul Alan Levy

Today we have joined forces with the American Civil Liberties Union of Virginia to seek appellate review of the preliminary injunction recently entered by a trial judge in Fairfax County, Virginia, requiring Jane Perez to make two changes in reviews of a Washington D.C. contractor named Christopher Dietz that she had posted on Yelp and Angie’s List.  The trial judge had pointedly refused to grant the injunction that Dietz requested, requiring that the entire posts be removed — the judge said that he was not persuaded that Perez’ criticisms of Dietz’s work were unsupported.  (The original injunction request is linked from the original Washington Post story on the case)   Dietz began a public relations offensive declaring victory, insisting that the suit would continue until he obtained damages and an apology, and further demanding that Yelp and Angie’s List “stop hiding behind section 230.”

Even though the outcome of the preliminary injunction hearing was largely a victory for the defendant (the entire transcript of the hearing, including the testimony and the judge’s oral ruling, as well as the exhibits about which the witnesses testified, are linked from this page), we decided that it was important to seek appellate review. 

Should Non-Profit Groups That Engage in Electioneering Have to Fully Disclose Their Budgets and Their Donors?

The Supreme Court has in recent years famously struck down laws that barred corporate electioneering  on First Amendment grounds. But the Court has had little problem with laws that demand disclosure about who is contributing to elections and how much (though the Court protects anonymous speech in other contexts). With that in mind, read this L.A. Times article describing proposed new rules in New York that would require non-profit groups that do electioneering to dislose their budgets and their donors. Here's an excerpt:

The push by states to force politically active nonprofits to disclose their financial backers ratcheted up Wednesday as New York's attorney general proposed tough rules that could require many such tax-exempt groups to publicly report their political budgets and donors. The regulations, which Atty. Gen. Eric T. Schneiderman plans to issue in spring after a public comment period, could affect some of the biggest outside groups that engage in federal political campaigns, including American for Prosperity, the League of Conservation Voters, the National Rifle Assn. and NARAL Pro-Choice America.

Consumer Issues Are Everywhere, Even on First Dates

So the Times reports here.