Consumer Law & Policy Blog

Ninth Circuit: no religious exception for state access-to-medicines regulations

Washington State regulations concerning the dispensing of medicine require timely delivery of medications. There's an exception if a provider has a religious objection, but that exception applies only where there's another pharmacist who can provide timely delivery. A pharmacy owner and two pharmacists challenged these regulations under the Equal Protection Clause and Free Exercise Clause (among other claims); essentially, their argument was that being required to provide medicines (such as Plan B) to which a pharmacist has a religious objection violates the pharmacist's religious freedom.

The district court agreed with the challengers, but last week an ideologically diverse panel of the Ninth Circuit unanimously reversed in Storman's Inc. v. Wiseman. In a forty-four-page decision, the court held that Washington's neutral and generally applicable regulations are rationally related to the state's interest in ensuring that "its citizens have safe and timely access to their lawful and lawfully prescribed medications" and therefore pass constitutional muster.

Judging by the host of amicus briefs filed on both sides (from religious groups, from health care groups, from non-profits, and from prominent legal academics interested in religious freedom issues including one former federal appellate judge), it's clear this case drew a lot of attention. The decision is an important victory for health care access. We can expect more religion-based challenges to health care laws in the future, however, in the wake of the Supreme Court's decision last year in Hobby Lobby (for our coverage, see here) -- which was based on a statute (the federal Religious Freedom Restoration Act) that provides more robust rights than the constitutional clams at issue here. For one example addressed by the Third Circuit earlier this year, see here.

Last week's decision from the Ninth Circuit is here.

Amtrak's woes mount; infrastructure upgrades and repairs, not so much

A CNBC article this week provocatively titled "Aging Amtrak tunnel is a reminder of crumbling America" chronicles the recent troubles that have plagued passenger train travel in the northeast U.S. and highlights the absence of crucial fixes. For instance:

For the fifth time in a week of breakdowns and electrical failures, thousands of passengers were left stranded on both sides of the 105-year-old Hudson River tunnel that provides a vital transit gateway between New Jersey and New York for millions of passengers and hundreds of freight trains every year.

On Tuesday, an Amtrak train headed to New York's Penn Station stalled inside one of two tunnels, stranding passengers for over an hour and backing up commuter trains that share the two-track passage.

"It isn't just these cables that need to be repaired. It's the track, it's the ballast, it's the signals, it's the catenary, it's all the things that need to be done," Amtrak President and CEO Joseph Boardman said Friday, according to the Associated Press. "So we have to juggle on a constant basis what we take down in order to get the work done."

It's not just a matter of passenger inconvenience, of course, although that is a serious problem in its own right. May's fatal derailment in Philadelphia reminds us that passenger safety is at stake, too. 

Here's the CNBC story. (If you're curious what Boardman means by "the catenary," and whether that's important for anything but chasing away the mousenary, Amtrak's blog has you covered, here.)

Racial disparities in health care; a pitch for single-payer

As Vijay Das of Public Citizen and physician Adam Gaffney observed in a CNN op-ed this week:

[A]cross the nation, black males in 2010 had a life expectancy almost five years lower than white males; black women could expect to live three years fewer than white females. In addition to inequalities in health outcomes (which have many roots), disparities persist in health care access. According to a 2013 report [from the Kaiser Family Foundation], blacks and Hispanics have substantially higher uninsured rates than whites. And while many are pinning their hopes on the Affordable Care Act to address such inequalities, the act won't remedy the many deeply rooted racial injustices in America's health care system.

Das and Gaffney place part of the blame on the Supreme Court's ruling that states could opt out of the Medicaid expansion (whose status we've recently discussed, here).

But ultimately, they argue, the only way to close the racial health-care gap is through a single-payer Medicare-for-all system. Read the op-ed here.

An encouraging trend on ascertainability continues

In April, we told you about about a decision from the Third Circuit -- the court that has given the strictest reading of ascertainability -- in which the panel refused to extend the doctrine further and one judge suggested it should be cut back. (See here.)

On Tuesday, we flagged a Seventh Circuit opinion taking a sensibly narrow approach to the doctrine. (See here.)

Today, we see another decision from the Third Circuit holding that ascertainability isn't a problem. In a case alleging an illegal home equity lending scheme involving two banks, one of the banks' arguments against certification was that some of the borrowers who would be included in the class might have declared bankruptcy and in that context might have abandoned the claims pursued on their behalf by the class. The Third Circuit rejected this claim as too speculative to raise an ascertainability problem. An encouraging sign. Read the case, In re Community Bank of Northern Virginia Mortgage Lending Practices Litigation, here.

Appellate court holds cases should be stayed, not dismissed, during arbitration

The Second Circuit Court of Appeals yesterday weighed in on the “unsettled” question whether a district court should stay a case or dismiss it, when it grants a motion to compel arbitration. The court held that the case should be stayed. The opening paragraph summarizes the issue and the reasoning:

In an effort to more efficiently manage their dockets, some district courts in this Circuit will dismiss an action after having compelled arbitration pursuant to a binding arbitration agreement between the parties. That is what happened here. After the District Court (Briccetti, J.) found Michael A. Katz’s state law claims against Cellco Partnership d/b/a Verizon Wireless (“Verizon”) to be arbitrable, the court compelled arbitration but denied Verizon’s request to stay proceedings. By dismissing the case, however, the District Court made the matter immediately appealable as a final order, provoking additional litigation—specifically, this appeal. Although we recognize the administrative advantages of a rule permitting dismissal, we hold that the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), requires a stay of proceedings when all claims are referred to arbitration and a stay requested.

Read the decision in Katz v. Cellco Partnership here.

CFPB Acts Against Mortgage Payment Company For Deceptive Ads

The Consumer Financial Protection Bureau acted yesterday against Paymap Inc. and LoanCare, LLC for deceiving consumers with advertisements for a mortgage payment program that promised tens of thousands of dollars in interest savings from more frequent mortgage payments. Under the terms of the orders, Paymap will return $33.4 million in fees to consumers and pay a $5 million civil penalty to the CFPB, and LoanCare will pay a $100,000 civil penalty.

The CFPB found that Paymap and LoanCare violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition against deceptive acts and practices. Specifically, the Bureau found that consumers were:

• Lured with deceptive promises of savings: Paymap made claims on its website such as, “The average customer will achieve over $33,000 in interest savings” using the Equity Accelerator Program. However, Paymap had no factual basis to support this claim. Moreover, only a tiny percentage, if any, of its customers achieved that amount of interest savings.

• Misled about when their payments would be applied: Paymap and LoanCare told consumers in their direct mail solicitations that enrolling in the Equity Accelerator Program would change the consumers’ payoff schedule to “every 2 weeks.” Although Paymap makes more frequent withdrawals from consumers’ accounts in the Equity Accelerator Program, it does not actually make more frequent payments on consumers’ mortgages. Instead, Paymap holds the collected payments in custodial accounts, and then pays consumers’ mortgages on their original monthly schedule. Consumers are charged a transaction fee with every withdrawal. Any interest savings that consumers may achieve through the Equity Accelerator Program is because they make a higher annual mortgage payment in the Program, using the same payment schedule as before enrollment.

The CFPB press release is here. The consent orders are here and here.

Brookings on a $15 minimum wage for the District

On the heels of news that D.C. voters will likely have the opportunity to vote in a $15 minimum wage in November 2016 (see the Washington Post's story here, from last week), an analysis from Brookings takes on claims from business that the region can't afford it. The short answer from Brookings is that we can, based on current wages and an economist's benchmark recommending a minimum wage of half the local median wage. The piece notes that D.C. would join several other major cities in this push, including Seattle, San Francisco, L.A., and Chicago. New York state is moving in a similar direction for fast food workers. Read the Brookings piece here.

Affirming class certification, Seventh Circuit refuses to expand "ascertainability"

We've covered numerous times the rise of a heightened "ascertainability" requirement in the Third Circuit. (See, for instance, here, for a summary and a recent development. Brief summary: ascertainability is the court-developed notion that a class must show an administratively feasible means of identifying class members; the test is particularly strict and plaintiff-unfriendly in the Third Circuit, where reliance on affidavits of the class members themselves has been held to be insufficient.)

Today the Seventh Circuit refused a class-action defendant's invitation to adopt a strict version of ascertainability. The court's reasoning is worth quoting at length (after the jump)...

Should Ninth Circuit Abolish the Doctrine of Initial Interest Confusion?

by Paul Alan Levy    

A couple of weeks ago, I blogged about a Ninth Circuit decision, Multi Time Machine v. Amazon.com, that undid a great deal of progress made in that court undoing the adverse effects of that Court's decision in Brookfield Communications v. West Coast Video; last week, I noted that Amazon had sought rehearing en banc, urging the Ninth Circuit to restore the gains.

In an amicus brief that I filed today on behalf of both Public Citizen and EFF, we urge the Ninth Circuit to go further and overrule Brookfield altogether.  We argue that the Ninth Circuit's various rulings initial interest confusion rulings are so inconsistent with each other as to form a "hopeless hodgepodge," that the doctrine does more harm than good, and that the best course is for the Ninth Circuit to overrule the decision and start over.

Judge rejects GM's request for broad protective order in litigation over defective ignition switches

The judge rejected a motion for a broad protective order but issued a narrower one. Reuters reports:

A federal judge overseeing litigation over multiple General Motors recalls last year will allow plaintiffs' lawyers to share some nonconfidential material gathered during discovery, rejecting the company's bid to broadly ban public pretrial dissemination of the material.

On Friday, U.S. District Judge Jesse Furman in the Southern District of New York said that while he would not grant the company's bid for a blanket ban on sharing the pretrial discovery, he would allow a more tailored protective order balancing the need to protect individuals' private information and ensure a fair trial for GM with the public's right to access the material.