Consumer Law & Policy Blog

Historic changes in privacy law

After years of laws permitting more and more government surveillance of cell phone and email users' private communications, this week Congress finally passed a law setting limits, the USA Freedom Act. President Obama signed it yesterday.

Among other provisions, the law requires the government to seek judicial approval to search the data, which will no longer be held by the government. The Foreign Intelligence Surveillance Court, which must approve governmental requests for surveillance, will operate in a more transparent manner and will in some cases receive adversary presentation (as opposed to its previous practice of hearing only the government's reason for seeking information and no argument in favor of protecting privacy).

The New York Times has the story.

Jean Sternlight: Asking Tough Questions About Mandatory Arbitration and Article III

Sternlight has been writing about arbitration for years, and has some interesting comments about the Supreme Court's opinion last week in Sharif at the Indisputably blog.  An excerpt:

The Supreme Court’s most recent Article III decision, Wellness Int’l v. Sharif (2015), raises substantial questions as to the constitutional legitimacy of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., at least as applied to private mandatory arbitration. * * *

A five justice majority (Sotomayor, Kennedy, Ginsburg, Breyer & Kagan), also joined by Justice Alito, in substantial part, held that litigants may “knowingly and voluntarily” allow a bankruptcy judge to hear claims that, absent such consent, Article III would bar the bankruptcy judge from deciding.* * *

* * * [W]hen courts have sought to justify arbitration on the ground that parties “consented” to bring claims in arbitration rather than in court, they have not applied the “knowing and voluntary” definition of consent recently applied in Sharif. If courts did look for knowing and voluntary consent they would find that while many business-to-business arbitration agreements meet the test, few if any consumer and employment clauses do so.

Those interested in the matter should read the entire post  (HT: Elayne Greenberg).

Financial retribution against protestors heightens cost of civil disobedience

NPR reports today on a Michigan State student who protested a tar sands pipeline by using a bike lock to secure himself to a truck involved in the construction. At the end of the 90-minute protest, the student (ironically named Tarr) was arrested for trespassing, which he expected. But the company responsible for the project, Precision Pipeline, managed to make him pay more: according to the story, the company "use[d] Michigan's crime victim restitution laws to assess charges to make up for the value of equipment and workers idled during their protest" -- a whopping $39,000, which amounts to more than Tarr's student debt and which is not dischargeable in bankruptcy.

This is part of a troubling trend of economic retaliation against protestors; the NPR piece also cites a Black Lives Matter protest threatened with lost-business charges for demonstrating at the Mall of America in Minnesota. It's unclear from the story who is behind this use of restitution laws: the prosecutors or the targets of the protest? If the latter, it seems anomalous that the victim of a crime can help determine the punishment. In criminal law enforcement generally, a governmental decisionmaker (a prosecutor) not affiliated with either the accused or the victim makes the decision what penalties to seek.

Either way, these uses of restitution laws seem designed to deter speech activity, albeit speech activity accompanied by civil disobedience. Although there is no First Amendment right to trespass, fining a protestor tens of thousands of dollars for a brief, peaceful demonstration seems disproportionate. Additionally, the Supreme Court has held that even criminal laws regulating unprotected speech cannot target speech based on viewpoint. (A First Amendment challenge to a particular application of a neutral criminal law would be difficult, however, because it would require the protestor in that particular case to show that a desire to punish the speech motivated the decision to seek additional penalties in that case.)

You can listen to the NPR story here.

A desert right in the middle of Baltimore

As an eye-opening op-ed in the Baltimore Sun pointed out last week, there are places in the U.S., even densely populated places, where access to essential medications is quite difficult. Acutely, pharmacies remained closed in Baltimore in the aftermath of the Freddie Gray riots. But there is a larger, more systemic problem, as the op-ed explains:

Chronically ill black and Hispanic residents are nearly half as likely to take lifesaving medications than whites with similar illnesses, largely because they don't have access to them. . . .

[M]inority residents are more likely to live in "pharmacy deserts." There are substantially fewer pharmacies in predominantly black and Hispanic neighborhoods than in white neighborhoods.

This gap in pharmacy access, which we found had widened over the last 10 years, may worsen amid the expected rise in pharmacy closures planned by retailers such as Walgreens. Unfortunately, but not unpredictably, the vast majority of these closures are likely to occur in minority neighborhoods, since they are less profitable likely due to greater rates of care for the publicly insured. Retail pharmacies are, after all, part of the private sector, often leveraging a public good for financial gain.

The author, a professor at the University of Illinois, notes that life expectancy within Baltimore can vary by twenty years depending on where a person lives. Read the whole piece, including a proposal to address the problem, here.

Sen. Warren aims to bring auto loans under CFPB oversight

...but is having trouble finding allies even on her own side of the aisle, reports Politico. The reason? Although loans from car dealers "are often the largest kind of unregulated debt consumers have" (part of the reason Sen. Warren is seeking greater regulation), the auto dealer industry is powerful:

The $730 billion auto-dealer industry enjoys a special status. Auto dealers are in every district, employ more than a million people and are often local and family owned — which adds up to huge leverage in Washington. The industry has an army of lobbyists and a long history of beating back regulatory attempts.

Read the whole story here.

BoA pays fine, will reform practices, after OCC finds violations of servicemembers' rights

Under a consent order between the Office of the Comptroller of the Currency (OCC) and Bank of America, BoA will pay a $30 million fine and increase oversight of servicemembers' accounts to prevent further violations of the Servicemembers Civil Relief Act.

Among the violations found by the OCC here were improper debt collection procedures using affidavits not based on personal knowledge. The violations affected 73,000 servicemembers, according to the OCC (BoA did not admit to the findings as part of the consent order).

You can read more details from the NYT here.