Consumer Law & Policy Blog

More on the Michigan Court of Appeals' Internet anonymity ruling

Last Friday, Paul Levy posted on the Michigan Court of Appeals' new ruling, Thomas Cooley Law School v. Doe, concerning the rights of anonymous on-line critics to retain their anonymity during litigation. Karen Sloan has now written this article providing more details on the ruling and quoting Paul.

NHSTA: The number of drivers using cell phones and other electronic devices is huge, and distracted driving is killing and injuring a lot of people

Last Friday, the National Highway Traffic Safety Administration issued its 2011 National Occupant Protection Use Survey (NOPUS). The agency explains that "at any given daylight moment across America, approximately 660,000 drivers are using cell phones or manipulating electronic devices while driving, a number that has held steady since 2010. According to separate NHTSA data, more than 3,300 people were killed in 2011 and 387,000 were injured in crashes involving a distracted driver" (emphasis added). Read the agency's press release for more information.

Fox Business News: Medical Credit Cards: Treatment Today, Payment Headaches Tomorrow

Here. 

Cert-stage amicus practice: Where are the legal liberals?

by Brian Wolfman

In this SCOTUSblog post, Adam Chandler has repeated a study he did five years ago of cert-stage amicus filings at the U.S. Supreme Court. Chandler took a look at every cert.-stage amicus brief filed between May 19, 2009, and August 15, 2012. He found that "the [U.S.] Chamber [of Commerce] has cemented its status as the country’s preeminent petition-pusher, and the rightward tilt of the most frequent filers has grown even more pronounced."

Chandler has produced this astounding chart, which shows the Chamber leading the pack, with 54 cert-stage amicus briefs. The National Association of Criminal Defense Attorneys is in second place with 41. The rest of the top 10 is occupied by groups generally on the legal political right, or, at least, groups that typically support business interests and oppose the positions taken in the Court by civil-rights or consumer-rights plaintiffs. The top ranks include the Pacific Legal Foundation, Cato, the Defense Research Institute (DRI), and the NAM. Of the 16 groups that have filed 10 or more cert-stage amicus briefs during the period studied, only two are considered liberal (the criminal defense lawyers already mentioned and AARP, which is ranked 11).

Let's assume that cert-stage amicus briefs matter, at least to some degree. Many court watchers think they do. Chandler cites evidence indicating that they do. So, where are the liberal groups, such as the ACLU, the National Employment Lawyers Association, and Public Citizen? Is it a matter of resources? To be sure, many liberal legal organizations can't match the resources of the Chamber of Commerce. Or is it tactical -- that liberal groups would rather the current Court not get its mitts on cases that individual aggrieved litigants are taking up? A combination of the two? Or something else entirely?

What should federal regulation look like and who should make it happen?

by Brian Wolfman

Congress crafts the outlines of federal regulation -- sometimes providing little direction and other times giving more specifics -- and delegates the rest of the job to expert federal agencies, which are duty bound to protect the people's interests in health, safety, and economic well-being (taking into account feasibility, costs and benefits, federalism concerns, etc.). In promulgating regulations, the agencies are required to take account of public comments, and their work may be reviewed by courts to assure its legality. That's how the system works, right? Well, not really. Before most important regulations are issued, they must be reviewed by the Office of Management & Budget, more specifically that agency's Office of Information and Regulatory Affairs (OIRA). And they may be delayed for years or die at OIRA.

Law professor Cass Sunstein, who ran OIRA during President Obama's first term, has just published a book about what he did at OIRA called "Simpler: The Future of Government." Here's an excerpt from Sunstein's introduction:

From 2009 to 2012, I ended up as administrator of OIRA. In that position, I helped to oversee the issuance of nearly two thousand rules from federal agencies. Under President Obama’s direction, I promoted simplification, including the use of plain language, reductions in red tape, readable summaries of complex rules, and the elimination of costly, unjustified requirements. I argued in favor of the use of “nudges”—simple, low-cost, freedom-preserving approaches, drawing directly from behavioral economics, that promise to save money, to improve people’s health, and to lengthen their lives. Also under President Obama’s direction, I promoted a disciplined emphasis on costs and benefits, in an effort to ensure that the actions of government are based on facts and evidence, not intuitions, anecdotes, dogmas, or the views of powerful interest groups. In this book I describe the large-scale transformation in American government that took place while I was OIRA administrator. I explore initiatives designed to increase simplicity—some now in effect, others on the horizon, still others for the distant future. As we will see, initiatives of this kind can be used not only by governments all over the world but by countless private organizations as well, including businesses large and small, and indeed by all of us in our daily lives. Each of us can benefit from simplicity, and all of us can make things simpler.

Go here or click on the embedded video below to hear Sunstein discuss the book.

 

But there's definitely another side to the story. Law professor Lisa Heinzerling has written "Sunstein’s ‘Simpler Government’ Is Legally Suspect, Overly Secretive And Politically Unaccountable." Here's an excerpt:

In his revealing book, Sunstein tells us why [regualtions languished and died at OIRA]: It is because he, Sunstein, had the authority to “say no to members of the president’s Cabinet”; to deposit “highly touted rules, beloved by regulators, onto the shit list“; to ensure that some rules “never saw the light of day”; to impose cost-benefit analysis “wherever the law allowed”; and to “transform cost-benefit analysis from an analytical tool into a “rule of decision,” meaning that “[a]gencies could not go forward” if their rules flunked OIRA’s cost-benefit test.

Assertive intrusions into agencies’ prerogatives — prerogatives given by law to the agencies, not to OIRA — were necessary, Sunstein insists, because otherwise agency decisions might be based not on “facts and evidence,” but on “intuitions, anecdotes, dogmas, or the views of powerful interest groups.” In Sunstein’s account, OIRA’s interventions also ensured “a well-functioning system of public comment” and “compliance with procedural ideals that might not always be strictly compulsory but that might be loosely organized under the rubric of ‘good government’.” No theme more pervades Sunstein’s book than the idea that government transparency is essential to good regulatory outcomes and to good government itself.

The deep and sad irony is that few government processes are as opaque as the process of OIRA review, superintended for almost four years by Sunstein himself. Few people even know OIRA exists; in fact, the adjective that most often appears in descriptions of this small office is “obscure.” Even fewer people know that OIRA has effective veto power over major rules issued by executive-branch agencies and that the decision as to whether a rule is “major” — and thus must run OIRA’s gauntlet before being issued — rests solely in OIRA’s hands. Most people, I would venture to guess, think that the person who runs, say, the Environmental Protection Agency is actually the Administrator of the Environmental Protection Agency. But given OIRA’s power to veto rules, the reality is otherwise: In the rulemaking domain, the head of OIRA is effectively the head of the EPA.

Congressional Research Service Report on the D.C. Circuit's "Noel Canning" Decision and the Recess Appointment Power

We've posted many times about the D.C. Circuit's Noel Canning decision, which held that three putative recess appointments made by President Obama to the National Labor Relations Board were, in fact, not proper recess appointments and were thus invalid. Go, for instance, here, here, and here.

Last week, the Congressional Research Service issued a report entitled The Recess Appointment Power After Noel Canning v. NLRB: Constitutional Implications. The report reviews the recess appointment clause and how earlier analyses of the clause from the Second, Ninth, and Eleventh Circuits compare to the analysis in Noel Canning. Perhaps most interesting is the report's take on the practical implications of the D.C. Circuit's ruling if it were to become the law of the land. Here's an excerpt of that section:

Although the D.C. Circuit’s actual order in Noel Canning directly implicates only one specific action, against one specific party, within one specific circuit, the court’s interpretation of the President’s recess appointment authority could have a substantial impact on the future division of power between the President and Congress in the filling of vacancies. If affirmed by the Supreme Court, the likely effect of the reasoning adopted in Noel Canning would be a shift toward increased Senate control over the appointment of government officials and a decrease in the frequency of presidential recess appointments. Most prominently, the President would no longer be permitted to make intrasession recess appointments. Since 1981, 329 appointments—more than half of all recess appointments made during that period—have been made during intrasession recesses of the Senate. In addition, the President would no longer be permitted to exercise his recess appointment authority to fill vacancies that arose while the Senate was in session, or that arose during a different intersession recess. Although CRS has not been able to determine the precise number of appointments that would have fallen into this category, it would appear that few of the intersession recess appointments made since 1981 filled vacancies that arose during the intersession recess in which the appointment was made. Vacancies in positions requiring Senate confirmation that no longer qualify for a recess appointment under Noel Canning would need to be filled through the general process of presidential nomination and Senate confirmation. Thus, by limiting both the periods in which a President may make recess appointments, and the vacancies that may be filled by such appointments, the decision likely would strengthen the Senate’s “Advice and Consent” role, while restricting the President’s authority to make unilateral appointments.

And here is the report's summary:

Under the Appointments Clause, the President is empowered to nominate and appoint principal
officers of the United States, but only with the advice and consent of the Senate. In addition to
this general appointment authority, the Recess Appointments Clause permits the President to
make temporary appointments, without Senate approval, during periods in which the Senate is not
in session. On January 4, 2012, while the Senate was holding periodic “pro forma” sessions,
President Obama invoked his recess appointment power and unilaterally appointed Richard
Cordray as Director of the Consumer Financial Protection Bureau (CFPB) and Terrence F. Flynn,
Sharon Block, and Richard F. Griffin Jr. as Members of the National Labor Relations Board
(NLRB).

The President’s recess appointments were ultimately challenged by parties affected by actions
taken by the appointed officials, and on January 25, 2013, the U.S. Court of Appeals for the
District of Columbia Circuit (D.C. Circuit) became the first court to evaluate the merits of the
President’s appointments. In a broad decision entitled Noel Canning v. National Labor Relations
Board, the court invalidated the appointment of all three NLRB Board Members. In reaching its
decision, the D.C. Circuit concluded that under the Recess Appointments Clause, the President
may only make recess appointments during a formal intersession recess (a recess between the end
of one session of Congress and the start of another), and only to fill those vacancies that arose
during the intersession recess in which the appointment was made.

Although the D.C. Circuit’s actual order in Noel Canning directly applies only to the NLRB’s
authority to undertake the single action at issue in the case, the court’s interpretation of the
President’s recess appointment authority could have a substantial impact on the future division of
power between the President and Congress in the filling of vacancies. If affirmed by the Supreme
Court, the likely effect of the reasoning adopted in Noel Canning would be a shift toward
increased Senate control over the appointment of government officials and a decrease in the
frequency of presidential recess appointments.

This report begins with a general legal overview of the Recess Appointments Clause and a
discussion of applicable case law that existed prior to the D.C. Circuit’s decision in Noel
Canning. The report then analyzes the Noel Canning opinion and evaluates the impact the case
could have on the roles of the President and Congress in the appointments context. A companion
CRS report, Practical Implications of Noel Canning on the NLRB and CFPB, provides a detailed
discussion of the impact the Noel Canning decision may have on the functioning of the NLRB
and the CFPB.

Michigan Appeals Court Protects Anonymity of Online Critic, But Should Have Done More

by Paul Alan Levy

The decision posted this morning by the Michigan Court of Appeals in Thomas Cooley Law School v. Doe is a victory for the Doe defendant, who gets the reversal that he sought, but is a mixed blessing for anonymous Internet speakers in future cases.

A unanimous Court of Appeals decided that the trial judge, Clinton Canady, was wrong to deny a protective order barring Thomas M. Cooley Law School from disclosing the name of a former student whom it had sued, alleging that harsh criticisms of Cooley on his blog, the Thomas Cooley Law School Scam, were defamatory.  The majority opinion faults the trial judge for deciding that Michigan law does not require such a protective order, and for assuming that a public figure like Cooley is exempt from having to allege and prove actual malice simply because the Doe had called its conduct criminal.  Under the ruling, Doe will be able to seek to have the complaint dismissed either on its face or for lack of evidence to support the claim that his blog is defamatory. 

Equally important for future cases, the Court of Appeals made clear that an anonymous speaker’s First Amendment rights must be considered in addressing protective orders.  The Court indicated that the Dendrite and Cahill standards, which are applied in other states directly pursuant to the First Amendment, “largely overlap” with Michigan law, and that, although the protective order motion itself does not turn on whether an adequate complaint has been filed or the plaintiff has evidence to support its claims, a protective order can be granted barring disclosure of a defendant’s name while the anonymous defendant seeks to have the lawsuit dismissed.

For future cases, however, it is disappointing that the majority opinion, in its effort to avoid applying the Dendrite and Cahill standards directly, gave little guidance to trial courts about the standards under which anonymous speakers’ requests for protective orders should be decided by trial judges.  And most troublesome is the majority’s deliberate refusal to address the notice requirement on which every other state appellate court has insisted, because otherwise an anonymous defendant may not know that a subpoena has been issued seeking his identifying information.  Thus, while the Doe was well-protected in this case, that is only because Cooley Law School issued a press release announcing its defamation claims, enabling the Doe to file a motion to block the subpoena.

A powerful opinion by Judge Jane Beckering concurs in the decision to overturn the denial of anonymity protection and remand the case, but strongly disagrees with the reasoning, arguing that Michigan should embrace the approach taken by almost very other state that has addressed the issue and adopt clear standards to guide trial judges.  Judge Beckering explains that Michigan’s existing rules require notice before subpoenas can be issued, and hence that appropriate First Amendment standards can be incorporated without any need to change the current rules.

No decision has yet been made whether to seek further review in the Michigan Supreme Court, in light of hints in the majority opinion that the Supreme Court might be the right Court to decide whether to adopt a specific rule to govern anonymity disputes about subpoenas.

More on disability in the United States

On Monday, we posted about Chana Joffe-Walt's piece for "This American Life" called "Unfit for Work: The startling rise of disability in America."  Joffe-Walt chronicled the rising number of people on federal disability benefits and discussed poor U.S. counties (focusing in particular on one county in Alabama) where 25% of all working age people receive federal disability benefits. We updated that story with a critical response from Media Matters, which claimed that Joffe-Walt's reporting was chock full of errors. Other organizations agree that Joffe-Walt's story is misleading or misunderstands the federal disability programs. Go here, here, and here.

UPDATE:

Go here for a powerful response to the Joffe-Walt story from eight former commissioners of the Social Security Administration. Here's a key excerpt:

The statutory standard for approval [of federal disability benefits] is very strict, and was made even more so in 1996. To implement this strict standard, Social Security Administration (SSA) regulations, policies, and procedures require extensive documentation and medical evidence at all levels of the application process. Less than one third of initial DI and SSI applications are approved, and only about 40 percent of adult DI and SSI applicants receive benefits even after all levels of appeal. As with adults, most children who apply are denied SSI, and only the most severely impaired qualify for benefits. * * * It is true [as reported by Joffe-Walt] that DI has grown significantly in the past 30 years. The growth that we’ve seen was predicted by actuaries as early as 1994 and is mostly the result of two factors: baby boomers entering their high disability years, and women entering the workforce in large numbers in the 1970s and 1980s so that more are now "insured" for DI based on their own prior contributions. The increase in the number of children receiving SSI benefits in the past decade is similarly explained by larger economic factors, namely the increase in the number of poor and low‐income children. More than 1 in 5 U.S. children live in poverty today and some 44 percent live in low‐income households. Since SSI is a means‐tested program, more poor and low‐income children mean more children with disabilities are financially eligible for benefits. Importantly, the share of low‐income children who receive SSI benefits has remained constant at less than four percent.

CFPB acts against mortgage insurers giving kickbacks to lenders

The Consumer Financial Protection Bureau (CFPB) announced four enforcement actions against mortgage insurers that the CFPB believes are paying improper kickbacks to mortgage lenders in exchange for business. The CFPB filed complaints alleging violations of the Real Estate Settlement Procedures Act (sometimes referred to as RESPA) and proposed consent orders against the four insurance companies to stop the practices, which the CFPB says have been prevalent for more than 10 years. The proposed consent orders would require the mortgage insurers to pay more than $15 million in penalties. The proposed consent orders are posted at the bottom of this page.

American Banker: How CFPB Exams Will Change the Debt Collection Industry

by Jeff Sovern

Here (behind a paywall, unfortunately). The article implies that the Bureau will listen to collector phone calls (at least, that's how I interpret the statement that the Bureau will audit the "handling of phone calls").  That contrasts with what Fred Williams reported in his book Fight Back Against Unfair Debt Collection Practices (which I blogged about here), when he wrote that collectors were told when the firm's compliance department was listening to their calls, in response to which the collectors would tone down their behavior.