Consumer Law & Policy Blog

FDA issues first-ever orders to stop sale of 4 tobacco products

The Food and Drug Administration announced today that it has issued orders to stop the sale and distribution of four tobacco products currently on the market. The orders are the first time that the FDA has used its authority under the Family Smoking Prevention and Tobacco Control Act to order a manufacturer to stop selling and distributing a tobacco product currently on the market. The Act was passed in 2009. The FDA's press release provides the details.

Where is all that college tuition money going? Is $60,000 per year too LOW?

Check out this thought-provoking piece of reporting from NPR about where an undergraduate student's tuition dollars go and the debate over what should be included in calculating the cost of a student's education. Depending on who's answering that question, one can view tuition as terribly inflated or -- if you count financial aid subsidies and the expenses of professors' research work as a part of each student's tuition -- actually not high enough.

That latter argument is made in the piece by top officials at Duke University, which happens to be my alma mater. As a social sciences/humanities guy who didn't spend any time in a research lab, I probably fell into the camp of students for whom tuition was too high.

(As a personal aside, though, I thought Coach K's salary was worth every penny. Four national championships and the winningest coach in Division I? Priceless. Go Devils!)

What does A-1 Exterminating not want its potential customers to learn about?

by Paul Alan Levy

This week Public Citizen became involved in a case pending in a trial court in Alabama, in which a lawyer is handling both a mass action and a class action against an exterminating company named A-1 Exterminating and its affiliates.  Plaintiffs allege that A-1 both provides bad services and fraudulently advertising its services; the law firm has cooperated with reporters covering the case and mentioned the litigation on its firm web site as and Facebook page.  But after several months of trying, the defendants were able to persuade the judge to enter a gag order of astonishing breadth — it barred both the consumer plaintiffs and their lawyers from referring to the litigation or its surrounding circumstances “outside of court.”   The judge did not give any reasons for the injunction, or issue any supporting factual findings; the defendants had argued variously that plaintiffs’s counsel were hurting their business by making false and defamatory statements about the extermination services, that plaintiffs’ counsel were improperly using their discussion of the case to troll for more plaintiffs, and that public discussion of problems with A-1 could pollute the jury trial and thus prevent the defendants from getting a fair trial.  The judge was, apparently, unconcerned about the possibility that prejudging the veracity of plaintiffs’ claims by suppressing further criticism of this company might deprive consumers of the opportunity to avoid getting hurt by a bad company; and he did nothing to prevent the company from touting its services to potential jurors.

Early this week, we sought mandamus from the Alabama Supreme Court, seeking to have the gag order set aside as a prior restraint.  Preliminary injunctions are never justified to restrain alleged defamation; the First Amendment protections for mass media advertising about the rights of consumers vis a vis specific defendants is well-established (in part by one of Public Citizen’s own cases, Zauderer v. Ohio; we have litigated the issue in the Eleventh Circuit as well), and no showing was made that comes close to meeting the standards that Alabama itself has set for the sort of pre-trial publicity that warrants the imposition of a remedy.

We'll be seeking a emergency stay next week.  Stay tuned.

A rare victory for privacy: quick policy reversal on license-plate tracking

Within a matter of days, the Department of Homeland Security announced plans for a broad network of license plate readers to collect information on Americans' movements nationwide, and then scrapped it.

So it appears that on the right issues, at the right moments, privacy advocates and the people they represent have some pull. Wish this were the rule rather than the exception.

 

FCC tries to revive net neutrality without rocking the boat; politically weak decision could prove disastrous

by Andrew D. Selbst, guest blogger

A month ago, I wrote about Verizon v. FCC, the D.C. Circuit decision striking down the FCC’s net neutrality regulations. In that post, I noted that the decision contained two distinct holdings. First, the FCC could not impose common carrier regulations (net neutrality is one such regulation) on broadband providers while they remain classified as “information services” rather than “telecommunication services” under the Telecommunications Act. Although changing how the broadband providers are classified is entirely within the power of the FCC, the statute explicitly says that common carrier regulation cannot be imposed on information services. Second, the court held that the FCC has authority, without reclassifying, to regulate in ways that do not directly contradict the statute. In other words, if the FCC wants to reimpose common carrier regulations like net neutrality, it must reclassify.

             Yesterday, FCC Chairman Tom Wheeler announced his response to the decision, and it has both promising and strongly worrisome parts.

NY Law Firm Censured for Debt Collection Abuses

Coverage by the New York Law Journal here and by Inside ARM.com here. 

The decline of the brand, and the rise of consumer information

James Surowiecki, The New Yorker’s financial writer, has this interesting analysis this week about how corporate brands are less valuable than they once were – thanks to the proliferation of consumer information.

Brett Kimberlin’s Attack on Free Speech

by Paul Alan Levy

Somewhat more than 25 years ago, I represented a federal prisoner named Brett Kimberlin who made a sensational accusation against a sitting Senator who was running for Vice-President – Kimberlin claimed that, during his extensive career as a drug dealer, one of his customers had been a then-law-student who was the scion of a major newspaper publisher, Dan Quayle.  Apparently hoping to block Kimberlin’s access to the major media, prison authorities put him in solitary confinement.  Kimberlin was in prison for some horrifying crimes – the planting of several bombs in Speedway, Indiana - and we had no idea whether Kimberlin was telling the truth about Quayle.  But the Justice Department was not punishing him on the theory that his speech was deliberately false and defamatory (in which case it would have been unprotected by the First Amendment; but how would the Justice Department have known whether Quayle was or was not a drug customer anyway?), and even thugs have the right to criticize public officials.  So we pursued documents about his confinement under the Freedom of Information Act, hoping to set up a Bivens action against the responsible federal officials.  (The action under Bivens and other authorities was brought by pro bono attorneys from Arnold & Porter and was ultimately settled after several denials of summary judgment and trips to the DC Circuit and even the Supreme Court).

Lawsuits by and Against Kimberlin over Free Speech Activities

After his release from prison, Kimberlin reinvented himself as an activist on such issues as addressing flaws in electronic voting as well as encouraging young people to register to vote, but the liberal direction of his politics made him the logical target of attacks from the right-wing end of the blogosphere, which recalled his criminal career and argued that it colored everything he had done since.  Some of his non-profit activities are creditable indeed, but it seems to me that Kimberlin has been undone by overconfidence in the skills that he developed as a jailhouse lawyer:  Kimberlin has responded to the online criticism with a campaign of pro se litigation, suing both individuals and groups of critics; some of his critics have sued Kimberlin and others who support Kimberlin.    There has been plenty of excess on both sides, as far as I am concerned.

Economists' Paper: Regulating Automobiles: The Consequences for Consumers

Colleen E. Haight of San Jose State University and Derek Thieme of George Mason University's Mercatus Center have written Regulating Automobiles: The Consequences for Consumers.  Here is the abstract:

Automobiles are ubiquitous. Most Americans take at least one car trip every day to get to work or school or to run household errands. The automobile has also never been safer. New technology has brought car frames that crumple to reduce the impact of a crash, airbags that cushion the blow of an accident, and cameras that show drivers what is behind the vehicle. In addition, rising standards of living have allowed consumers to purchase more safety equipment and to question the environmental impact of cars. While cleaner, safer automobiles certainly have benefits, as economists, we must ask, what do all these regulations cost the consumer? Costs arise from three sources: workplace safety regulation, environmental regulation, and consumer safety regulation. In this paper, we examine each area in turn, focusing on how the cost of regulations impacts the average automobile consumer.

KlearGear update: debt collector agrees that “non-disparagement clause” debt is void

We don’t often have occasion to praise debt collectors on this site, so it’s worth taking note when a debt collection company does the right thing.

As many of you will remember from previous posts (see here and here), an online retailer called KlearGear tried to extort $3500 from its customer John Palmer because his wife Jen criticized the company online; when John refused to pay, KlearGear reported the supposed “debt” to the credit agencies, ruining John’s credit. The claimed basis for the “debt” was entirely bogus: it was based on a “non-disparagement clause” that the company tried to impose on John years after it did business with him and which would be unenforceable anyway. In December, Public Citizen sued KlearGear on behalf of the Palmers.

Our suit also named the debt collector Fidelity Information Corp., who by this point owned the debt. Now Fidelity has done an independent review of the case and reported to the credit agencies that the debt was erroneous. So the Palmers have a measure of relief – the KlearGear debt is off John’s credit report, finally, after 18 months. Today the Palmers voluntarily dismissed Fidelity from the lawsuit.

Of course this doesn’t end the case against KlearGear, which still must answer for the year and a half during which the Palmers had applications for credit delayed or denied, had to delay trying to sell their home and buy a new one, and were without heat in their home for three cold weeks in October because they couldn’t get credit to buy a new furnace when their old one broke – all on account of the unfounded credit report from KlearGear. We’re now waiting for KlearGear to respond to our complaint.