Consumer Law & Policy Blog

Should the Affordable Care Act's employer mandate be repealed?

by Brian Wolfman

Yes, according to this study issued by the Robert Wood Johnson Foundation's Urban Institute. To oversimplify, the Affordable Care Act's employer mandate requires employers with over 50 employees to provide their full-time employees with reasonably priced health insurance that meets the ACA's minimum requirements (or to pay penalties if they don't comply with the mandate). Because of opposition from employers and implementation concerns, the employer mandate's effective date (originally January 1, 2014) was pushed back (and then pushed back even further for employers with between 50 and 100 employees).

The Urban Institute study says that two key attributes of the ACA are essential to its success both fiscally and in providing coverage to millions more Americans : the ACA's individual mandate (which was upheld by the Supreme Court in 2012) and its massive Medicaid expansion (which was upheld by the Supreme Court in 2012 on a state-by-state basis only to the extent that individual states opt in). But the employer mandate, the study concludes, will provide health-care coverage to only a relatively small number of Americans who are currently uninsured while creating significant opposition to the law from businesses. So, the employer mandate should be repealed, with people who would be covered by the employer mandate obtaining insurance through the ACA's other mechanisms: the individual mandate or, where applicable, medicaid. The report also analyzes whether, and to what degree, the employer mandate will cause employers to lay off low-wage workers or shift them to non-full-time positions to avoid the penalties associated with the mandate.

 

FDA: some temporary tattoos have serious safety risks

Tattoos are popular. Temporary tattoos are safe (and, by definition, non-permanent) alternatives to permanent tattoos, right? Not necessarily, says the FDA. They can have serious negative, long-term health consequences, such as allergic sensitivity, scarring, and sensitivity to UV exposure from sunlight.

Pomegranates, snake oil, and deceptive food advertising

Some of our readers may know about a case pending in the Supreme Court called POM Wonderful v. Coca-Cola. In that case, POM Wonderful, which markets drinks containing pomegranate juice, sued Coke under the Lanham Act, claiming that Coke has deceptively marketed products as containing lots of healthy pomegranate juice when in fact they contain almost no pomegranate juice.

POM's Supreme Court brief starts this way:

Respondent Coca-Cola has designed its “Pomegranate Blueberry” juice product to mislead consumers. Over 99% of the product is apple and grape juice. The amounts of pomegranate and blueberry juice it contains—0.3% and 0.2% respectively—are so trivial that no consumer could perceive them. Yet every aspect of the product’s appearance is tailored to convince consumers that it contains significant amounts of pomegranate and blueberry juice. The words “Pomegranate” and “Blueberry” appear in large font on the front of the bottle, each occupying a single line of the label. These words dwarf the FDA-required disclaimer, “Flavored Blend of 5 Juices,” which is set in significantly smaller font on a separate line below the product name. The bottle prominently displays images of a pomegranate and oversized blueberries, which appear, respectively, in front of images of an apple and grapes. The product is colored deep purple to resemble pomegranate and blueberry juice.

To oversimplify a bit, the Court of Appeals for Ninth Circuit said that POM had no Lanham Act claim because Coke's labels are regulated by the FDA. The degree of FDA regulation is light, and, as you might imagine, how much the FDA regulates may be relevant to the question whether the Lanham Act claim is ousted by FDA regulation. For a nice overview of the arguments, see this article by law professor Ronald Mann.

Observers have suggested that POM's arguments are a tad ironic given POM's extravagant labeled-based claims about the (supposed) health benefits of drinking its pomegranate-based juice. Satirist John Oliver had done a brilliant piece skewering POM's ads and other health claims by food sellers. (Did you know that cocoa puffs are health food?)

Oliver's piece is guaranteed to have you laughing -- and, perhaps, questioning our system of food labeling regulation. To watch, click here and then go to around 15:25 on the video.

Update: Some additional sparring between POM Wonderful and John Oliver

Annals of Consumer Law: Stephen Ware Paper on the British Debate on Imprisonment for Debt in the Twentieth Century

Stephen J. Ware of Kansas has written A 20th Century Debate About Imprisonment for Debt.  Here's the abstract:

In the early twentieth century, Parliament debated whether to abolish imprisonment for debt.  Parliament’s Select Committee on Debtors (Imprisonment) of 1909 heard testimony from witnesses and issued a report recommending the continuation of imprisonment for debt.  This testimony and report make for fascinating history.  Although imprisonment is not part of contemporary debates about debt collection and personal insolvency (consumer bankruptcy) law, the competing views expressed in Parliament over a century ago about consumer debtors and those who lend to them will be recognizable to anyone familiar with contemporary debates on either side of the Atlantic.

Company Doe suddenly loves the press!

Yesterday, Company Doe unmasked itself: it’s the baby-carrier maker Ergobaby. It was a smart move to share its side of the story (and a fascinating story it is, told here by Alison Frankel of Reuters and worth a read).

Ergobaby has every right to defend itself in the press -- that is, in fact, the very course we argued to the Fourth Circuit that the company ought to have taken from the start instead of seeking the closure of court proceedings.

The timing tickles me, though: the district court has not yet unsealed the case file (presumably because it only just got the case back in its hands yesterday from the appeals court), so the only information out there about the still-sealed facts is what Ergobaby chooses to say. There’s no reason to doubt the details Ergobaby has shared, but until the documents are unsealed, the rest of us can’t judge for ourselves. (The ability to judge for ourselves is, of course, a big part of why Public Citizen, Consumers Union, and Consumer Federation of America went to court to begin with.) Ergobaby thus milks its seal –- while it still lasts –- for all it’s worth.

Vermont Enacts GMO Labeling Law

Yesterday, Vermon't governor signed into a law a bill that will require labels on genetically engineered or genetically modified (GMO) foods sold at retail stores Vermont. The law will also prohibit labeling products that contain GMOs as “natural.” The law will go into effect on July 1, 2016.

Maine and Connecticut have also passed laws requiring GMO labeling, but those laws do not go into effect until other states also pass such laws. Vermont is the first state to pass a "no strings" law requiring GMO labeling.

Federal law neither requires nor bars GMO labeling.

Details about the Vermont law and the effort to enact it are available at the website of the Vermont Right to Know GMOs Coalition.

Aspen Publishers caves (in part)

Paul told you that the law book publisher Aspen Publishers had demanded --through a licensing scheme aimed at getting around copyright law's first-sale doctrine --that purchasers return books they had bought from Aspen at the end of the semester. Why? What better way to dry up the used-book market and increase profits in new books.

Aspen's policy drew intense criticism, with a petition drive and promises from law professors to boycott Aspen books. Now, as law professor Josh Blackmun reports, Aspen has caved in part:

Aspen has updated their policy. Now, students now have a choice: they can buy a physical book to keep, or buy a digital version and print version, and return the latter. I’m not happy with the second option, but I’ll declare a partial victory and withdraw my petition. See more here.

 

TV News Story on Arbitration

Here.

Would you like to know what your plane ticket actually costs?

by Brian Wolfman

Under a 2012 Obama administration rule -- which survived an airline industry challenge in the courts -- airline consumers are told, up front, the total cost of an airline ticket -- that is, the base airfare, mandatory fees, and the taxes. The breakdown comes later. The idea is that if all the airlines tell consumers the total fare, consumers more easily can comparison shop. (The system does not enable pefect comparison shopping in all cases without some work because many airlines charge for some "extras" (like baggage carriage) and others don't.)

As this article by Joan Lowy explains, before the "administration put its regulation in place two years ago, airlines and ticketing services would typically display the lower base fare in large type and show taxes and fees in small print. Consumers shopping online often weren't shown taxes and fees unless they scrolled to the bottom of the web page or clicked through several pages after selecting a flight."

Having lost in the courts, the industry now is turning to its friends in Congress. If a bill named The Transparent Airfares Act becomes law, the airlines will be able to advertise the base fare and then add in taxes and fees at the time of final purchase. And, for Internet sales, "disclosure" of taxes and fees can be hidden in pop-ups and links.

The airlines say that the proposed law is fair because it allows airlines to do what car rental companies and other businesses do.

The chief sponsor of the bill is House Republican Bill Shuster. Shuster has gotten more money from the airline industry this election cycle than any other member of Congress. A spokesperson for Shuster says that Shuster "receives support from many constituencies because they support his agenda, not the other way around."

"Company Doe" unmasks itself

Today, in anticipation of the district court's unsealing of the court file in the Company Doe case, the baby-carrier maker Ergobaby revealed that it is "Company Doe," the company that fought for two-and-a-half years for the right to litigate in secret its challenge to the publication of a report in the Consumer Product Safety Commission's product safety database. Even after the district court decision vindicated Ergobaby's position on the merits, finding that Ergobaby's product had not caused the harm that was reported, Ergobaby continued to insist that the court records containing the facts and evidence in the case, and even the company's name, remain secret.

The U.S. Court of Appeals for the Fourth Circuit rejected Ergobaby's position last month, ruling in Company Doe v. Public Citizen that under the First Amendment, potential harm to corporate reputation does not justify secret litigation. The court wrote:

A corporation very well may desire that the allegations lodged against it in the course of litigation be kept from public view to protect its corporate image, but the First Amendment right of access does not yield to such an interest. The interests that courts have found sufficiently compelling to justify closure under the First Amendment include a defendant’s right to a fair trial before an impartial jury, protecting the privacy rights of trial participants such as victims or witnesses, and risks to national security. Adjudicating claims that carry the potential for embarrassing or injurious revelations about a corporation’s image, by contrast, are part of the day-to-day operations of federal courts. But whether in the context of products liability claims, securities litigation, employment matters, or consumer fraud cases, the public and press enjoy a presumptive right of access to civil proceedings and documents filed therein, notwithstanding the negative publicity those documents may shower upon a company. (citations omitted)

Read our press statement here.