Consumer Law & Policy Blog

Sid Wolfe Steps Down as Director of Public Citizen Health Research Group

After 42 years as head of Public Citizen Health Research Group, Dr. Sidney Wolfe is handing the reins over to his deputy director Dr. Michael Carome, effective today. Sid founded the Group in 1971, with Ralph Nader. Under Sid’s direction, Public Citizen helped to have 25 dangerous drugs removed from the market and pushed the Occupational Safety and Health Administration to set more than a dozen worker-protective health standards. Although retiring as director, Sid will continue to work with the Group. Public Citizen's press release has more details on Sid's accomplishments.

Full implementation of Affordable Care Act medicaid expansion at risk

by Brian Wolfman

After the Supreme Court last summer held (7 to 2) that the Affordable Care Act's medicaid expansion could not be forced on the states under the Constitution's so-called Spending Clause, it was left to the states to decide whether they wanted the expansion. Medicaid expansion under the ACA is broad, providing coverage to people with incomes up to 133% of the federal poverty level. Medicaid expansion is thus a central component of the ACA's promise to make health care coverage available to all (or nearly all) Americans. But, in light of the Supreme Court's ruling, without cooperation at the state level, many Americans will remain uncovered.

Under the Supreme Court's decision, the expansion seemed like an offer that the states could not refuse. Under the ACA, the federal government pays 100% of the new recipients' medicaid costs for the first three years of the program and at least 90% after that. But political opposition to the ACA runs very deep. We have posted repeatedly on the politics surrounding the states' decisions whether to accept the funding or not. Go, for instance, here, here, here, and here.

This article by Sandhya Somashekhar in today's Washington Post explains that in some states where Republican governors are ready to accept medicaid expansion, Republican-controlled legislatures have not been willing to go along. The expansion is slated to begin in January. But according to Somashekar's article, only 23 states and D.C. have accepted the expansion, a whopping 19 have rejected it, and 8 are still debating it. States that reject expansion can accept it down the road. But meanwhile, full implementation of the ACA for the people most in need is in serious jeopardy.

Voice of San Diego Series on Mandatory Arbitration, and a Response to Professor Lobel

by Deepak Gupta

The Voice of San Diego has been publishing a muli-part series on mandatory arbitration by reporter Will Carless. The most recent installment explores the war on consumer class actions and the impact of AT&T Mobility v. Concepcion. Previous installments focus on arbitration secrecy, the National Arbitration Forum debacle, and the plight of an individual consumer in the arbitraiton system. You can find the full series here, and hear Carless interviewed in a radio segment as well.

I spent some time talking to Carless for the series, and was impressed by his thoroughness. It's terrific to see a local organization devoting such significant resources to this under-reported story. More generally, the site itself is worth checking out as a great example of the new non-profit model of investigative reporting. 

The Voice has also published a response of sorts by Orly Lobel, a University of San Diego law professor (and former CL&P contributor), who argues that "the advantages of arbitration should not be understated" and suggests that policymakers focus on tinkering with the procedural fairness in the arbitration system itself rather than adopt more systemic reform. Her column deserves a quick response.

The problem with Lobel's argument is that it relies chiefly on comparative studies that ask: How do indivdual consumers who are able to bring claims and complete the arbitration process fare compared to individual consumers who do so in court? But, as several other legal scholars have pointed out, that's the wrong question to ask for purposes of policy reform because it misses the real purpose and effect of mandatory arbitration clauses in mass consumer contracts. Hypothetically, if arbitration clauses wiped out 99% of the claims, would it make sense to focus on putting the 1% that remain under the microsope? As Jean Sternlight of UNLV has recently argued, we should instead be asking "whether consumers' claims are suppressed or eliminated altogether as a result of companies' use of mandatory arbitration clauses." And always worth reading on this general topic is David Schwartz's article, Mandatory Arbitration and Fairness, which lays bare the misuses of empirical research by opponents of arbitration reform. This is not to say that Lobel is a political opponent of the sort that Schwartz's article has in mind; her column seems a bit more fair-minded and circumspect. But to the extent that she contends that comparative studies of individual outcomes can make the case against systemic arbitration reform, she is widely off the mark.

Times Article: If My Data Is an Open Book, Why Can’t I Read It?

by Jeff Sovern

Last week, the Times ran an article about companies that sell consumer data to businesses but won't provide it to the consumers involved.  Despite the headline, reprinted above, I thought the article didn't really explain why companies won't provide the information to consumers.  So I wrote a letter with my explanation, which the Times has now posted on its website.  My letter is accompanied by another which offers an interesting take on this issue.

Times Sunday Dialogue: More Regulation, Or Less

by Jeff Sovern

Tomorrow's Sunday Times has a series of letters on the issue of whether society needs more regulation or less.  One letter, by Dennis Canfield of  Western Springs, Ill., opines:

The problem with the current state of government involvement in our daily lives is that the overwhelming majority of it — from employment regulations to “consumer protection” laws to the Americans With Disabilities Act — is not regulation but interference, and we are drowning in it. There are legitimate areas for government regulation; if the government would focus on these and let the rest alone, it would do a better job of regulating, and we would all be better off.

I found this letter particularly unhelpful.  I can't think of any regulation which is not interference.  Even the laws making murder a crime are interference--with the murderer's attempts to kill people--but I doubt Mr. Canfield would object to that interference. The question is what kinds of interference goes too far.  Mr. Canfield's examples include consumer protection. Does he mean all consumer protection laws?  Does Mr. Canfield believe, for example, that predatory lending laws should be abolished as interference, or that lenders should be free to deceive borrowers, or merchants employ deceptive advertising?  I can't tell.  The fact that he put the phrase in quotes suggests that perhaps he means only ersatz consumer protection laws, but he doesn't identify any such laws.  That may be a function of the brevity requirements for letters in the Times.

Mr. Canfield would have done better to explain why he objects to consumer protection laws. What is wrong with them?  Which consumer protection laws are we drowning in?  In the absence of such specificity, it's difficult to have a useful debate. 

But maybe this is just sour grapes on my part. I submitted a letter to the Times, but they didn't see fit to print it.  Here's what I said:

Free markets work well when consumers understand what they are paying.  For example, a mortgage lender that charged 100% annual interest rates would not last long.  But the subprime lending debacle showed that lenders can obscure their rates.  Consumers who thought they were getting cheap fixed-rate mortgages but actually signed mortgages with initial low "teaser" rates that later soared contributed to the foreclosures that brought the economy down. 

 

We need regulation to help consumers make appropriate decisions.  In other words, regulation can make markets work better.

 

Oh well.  I am comforted by the knowledge that I have another letter coming in tomorrow's Times.