Consumer Law & Policy Blog

FDA proposes rule to authorize generic drug manufacturers to update labels to provide new warnings (just like brand-name manufacturers are authorized to do)

In Wyeth v. Levine (2009), the Supreme Court held that the FDA's approval of the labeling for a brand-name prescription drug generally does not preempt a personal-injury state-law tort claim premised on the manufacturer's failure to warn about the drug. But, later, in PLIVA v. Mensing (2011), the Supreme Court held that state-law failure-to-warn claims are preempted by the FDA's labeling approval when the drug is a generic drug.

Why the difference? Well, mainly, according to the Supreme Court, the difference was that brand-name manufacturers can, by FDA regulation, unilaterally amend their labels to meet the safety demands of state law, but generic drug companies cannot. Rather, the Supreme Court said, generic labels must, in all cases, simply ape the labels of their brand-name counterparts (absent FDA pre-approval).

So, to help ensure that potential users of generic drugs get up-to-date safety information about generic drugs, in September 2011, Public Citizen filed a petition asking the FDA to amend its labeling rules to authorize generic drug manufacturers to make safety-related label changes without FDA pre-approval.

Today, the FDA granted that petition and proposed a regulation to do just that.

Stay tuned.

 

 

Talesh Paper on How Corporations Use Private Dispute Mechanisms to Weaken Consumer Protection Laws

Shauhin A. Talesh of Irvin has written How the 'Haves' Come Out Ahead in the Twenty-First Century, 62 De Paul Law Review .519 (2013).  Here is the abstract:

This paper attempts to bridge and link the “speculations” in Marc Galanter’s seminal article in 1974 regarding how repeat players influence public legal institutions by playing for favorable rules and Lauren Edelman and Marc Suchman’s hypotheses in 1999 that organizational repeat players have created a private legal order.  In particular, I suggest the two theories need to be connected and explored empirically if we want to better understand the link between public and private legal orders and the effect public and private institutional arrangements have on statutorily created legal rights.  I focus not just on how repeat players play for favorable rules in courts, but how organizations play for favorable dispute resolution structures that operate outside courts but are ultimately codified into law, deferred to by courts and alter the infrastructure of access for consumers.  I use a case study of California consumer protection laws to show how manufacturers initially subject to powerful consumer protection laws, weakened the impact of these laws by creating dispute resolution venues.  The legislature and courts subsequently incorporated private dispute resolution venues into statutes and court decisions and made consumer rights and remedies largely contingent on consumers using manufacturer-sponsored venues.  In this instance, organizations created a private legal order, then influenced the public legal order, in order to utilize and maintain a private legal order.  Thus, I offer a theory that explores how organizations seamlessly flow through these increasingly blurred boundaries between the public and private sphere and ultimately shape the content and meaning of law designed to regulate them in both domains.

 

Will the FDA ban trans fats?

This article by Sabrina Tavernese explains:

The Food and Drug Administration on Thursday proposed measures that would all but eliminate artificial trans fats, the artery clogging substance that is a major contributor to heart disease in the United States, from the food supply. Under the proposal, which is open for public comment for 60 days, the agency would declare that partially hydrogenated oils, the source of trans fats, were no longer “generally recognized as safe,” a legal category that permits the use of salt and caffeine, for example.That means companies would have to prove scientifically that partially hydrogenated oils are safe to eat, a very high hurdle given that scientific literature overwhelmingly shows the contrary. The Institute of Medicine has concluded that there is no safe level for consumption of artificial trans fats.

Read FDA's press release and the proposal to be published tomorrow in the Federal Register.

Hat tip to Hannah Wolfman-Arent.

Another Study of the Credit CARD Act: Did It Restrict Credit Access?

Vikram Jambulapati of MIT's Sloan School of Management and Joanna Stavins of the Boston Fed have written The Credit CARD Act of 2009: What Did Banks Do?  Here's the abstract:

The Credit CARD Act of 2009 was intended to prevent practices in the credit card industry that lawmakers viewed as deceptive and abusive. Among other changes, the Act restricted issuers’ account closure policies, eliminated certain fees, and made it more difficult for issuers to change terms on credit card plans. Critics of the Act argued that because of the long lag between approval and implementation of the law, issuing banks would be able to take preemptive actions that might disadvantage cardholders before the law could take effect. Using credit bureau data as well as individual data from a survey of U.S. consumers, we test whether banks closed consumers’ credit card accounts or otherwise restricted access to credit just before the enactment of the CARD Act. Because the period prior to the enactment of the CARD Act coincided with the financial crisis and recession, causality in this case is particularly difficult to establish. We find evidence that a higher fraction of credit card accounts were closed following the Federal Reserve Board’s adoption of its credit card rules. However, we do not find evidence that banks closed credit card accounts or deteriorated terms of credit card plans at a higher rate between the time when the CARD Act was signed and when its provisions became law.

Town Council to Meet on Settlement in Mount Holly Tonight

by Deepak Gupta

We've blogged before about Mount Holly--the Supreme Court case about the future of disparate impact in housing and lending discrimination. (My firm represents current and former Members of Congress in the case). All along, it's seemed possible that Mount Holly would settle before the December oral arguments. 

This morning, that's looking even more likely: Bloomberg reports that the Mount Holly town council will meet tonight to consider, and possibly vote, on a proposed settlement that will end the case and deprive the Supreme Court -- for the second time in two years -- of the opportunity to decide the fate of disparate impact. (Relatedly, Adam Serwer of MSNBC has an-depth piece today that summarizes the relevant history and includes interviews of photographs of Mount Holly Gardens residents and their homes.)

A settlement will shift attention to a previously little-known case before the U.S. District Court for the District of Columbia. Two insurance trade groups are challenging HUD's new disparate-impact rule. They claim not only that the rule is contrary to the FHA but that it is reverse-preempted under the McCarran-Ferguson Act because (as applied to insurance companies) it impermissibly regulates the "business of insurance," a province of state regulation. If the court adopts the far narrower McCarran-Ferguson reverse-preemption theory, the case could cease to be a vehicle for a broader challenge to disparate impact. 

CFPB gets going on debt collection

by Brian Wolfman

The Consumer Financial Protection Bureau took two steps yesterday in the debt-collection realm.

First, it began adding complaints about debt collection to its public consumer-complaint database.

Second, it began the process of rulemaking for the debt-collection industry. The agency issued an advance notice of proposed rulemaking seeking data on many issues, including the accuracy of information used by debt collectors, how consumers can best learn of their rights, and the current means -- legal and illegal -- used by debt collectors to collect debts. In the agency's press release CFPB director Richard Cordray explained the reasons behind the agency's inquiry:

For decades, many consumers have reported various unacceptable practices in the debt collection industry. Today’s action will allow us to hear from the public as we consider what rules are needed. We want to ensure that all players in the industry are working with correct information, that consumers are fully informed, and that consumers are treated fairly and with dignity.

The rules that emerge from this process could significantly change debt-collection practices. Although the federal law governing debt collection -- the Fair Debt Collection Practices Act -- has been around since 1977, until enactment of the Dodd-Frank financial reform law in 2010, no agency was authorized to issue legislative rules governing the conduct of the debt-collection industry (and practices were governed generally by the text of the FDCPA and court decisions interpreting it). Now, the CFPB has that authority.

The intersection of Obamacare and open government

This story from NPR's Morning Edition this morning discusses various states' efforts to handle consumer questions regarding the implementation of Obamacare. Several states are outsourcing the operation of call centers to companies like Maximus, but most of the states won't make public how much they are paying for the service; for instance, Connecticut's contract with Maximus is public, but information about pricing is blacked out, so taxpayers don't know how much the state is paying or how much it's being charged per call the company handles. Vermont, by contrast, makes pricing information public.

Industry group wants to ban class action privacy lawsuits

Check out this story at MediaPost describing lobbying efforts by the Digital Marketing Association "to overhaul privacy laws in order to protect companies' ability to use data for marketing purposes."

More "Reform" from John Beisner and the Chamber

In connection with its "Legal Reform Summit" last week, the U.S. Chamber of Commerce's Institute for Legal Reform issued a new paper written by John Beisner and his colleagues at Skadden Arps with new proposals for legislation to limit class actions and expand federal jurisdiction over both class actions and individual actions. Entitled A Roadmap for Reform: Lessons from Eight Years of the Class Action Fairness Act, the paper provides a corporate wish-list for legislation to expand the Class Action Fairness Act (CAFA), as well as legal analysis intended to support these proposals for further "reform." In light of John's success in helping to shape both the debate over CAFA and the terms of the law, his thoughts about next steps in pursuing the corporate agenda of limiting litigation are well worth examining.

One striking thing about the paper is that it seemingly treats any issue a defendant has lost under CAFA as a potential subject for legislation to close "loopholes" in CAFA, even if the issue has only been the subject of one or two judicial decisions. But the paper also advances some ideas that are far-reaching and well beyond CAFA's current scope, such as the complete elimination of cy pres awards, the prohibition of "issue classes," and the expansion of federal diversity jurisdiction to include even non-class actions if they are related to a Multi-District Litigation (MDL) proceeding pending in the federal courts.

The ACT and the College Board sued over alleged unlawful sale of test-takers' private information

As Emily Babay of philly.com explains

The companies that administer the SAT and ACT college entrance exams are being sued over their sales of students' personal information to outside parties. A lawsuit filed this week contends that the College Board, which  runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read the federal-court class-action complaint.

A lawsuit filed this week contends that the College Board, which runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.

The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read more at http://www.philly.com/philly/news/College_Board_ACT_sued_over_sale_of_student_information.html#3l2WYv7Q42DK5Jja.99

The companies that administer the SAT and ACT college entrance exams are being sued over their sales of students' personal information to outside parties.

A lawsuit filed this week contends that the College Board, which runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.

The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read more at http://www.philly.com/philly/news/College_Board_ACT_sued_over_sale_of_student_information.html#3l2WYv7Q42DK5Jja.99

The companies that administer the SAT and ACT college entrance exams are being sued over their sales of students' personal information to outside parties.

A lawsuit filed this week contends that the College Board, which runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students' consent.

The test companies are "masking the sale" of personal details about the students "under the guise of 'sharing'" the teens' information with other agencies, the suit says. It says the companies don't disclose to students that their personal information will be sold for profit.

Read more at http://www.philly.com/philly/news/College_Board_ACT_sued_over_sale_of_student_information.html#3l2WYv7Q42DK5Jja.99