Consumer Law & Policy Blog

FTC acts against scheme to access seniors' bank accounts

The Federal Trade Commission announced:

Medicare Card Scheme Took Money from Seniors’ Bank Accounts

A group of scammers who falsely promised consumers new Medicare cards in order to obtain their bank account numbers and debit their accounts will be banned from selling healthcare-related products and services under settlements with the Federal Trade Commission.

The settlements resolve charges the FTC filed last year against Benjamin Todd Workman and Glenn Erikson and their companies. Their telemarketers falsely told consumers they needed their bank account numbers to verify their identities before sending a new Medicare card, promising they would not take money from the accounts. In fact, they took several hundred dollars from each consumer’s account and provided nothing in return. In some cases, their telemarketers falsely promised to provide consumers with identity theft protection services.

The full FTC press release is here.

Marketplace morning report on NPR: Chipotle facing wage/hour lawsuits

After discussing various cases against Chipotle based on misclassification and off-the-clock work, the story goes on to claim that private wage/hour enforcement is rising in general. The reaction of the industry representative interviewed for the story is telling:

“Plaintiffs’ attorneys, the employees’ attorneys, became aware that this was sort of lucrative ground for them to cover,” [Lorrie Ray, an attorney at Mountain States Employers Council] says. “They started insisting that employers pay their clients for mistakes they’d made under the law.”

Oh, the horror! Workers insisting that employers don't make legal errors in paying them!

Have a listen, here.

More on the Fiat Chrysler recalls - control problems and explosions

Brian posted earlier this morning about cyber-security concerns leading to some of the recalls. Two other notable aspects of today's recall and $105 million fine, the largest in U.S. history, are:

-The company will offer to buy back up to half a million Dodge Ram pickups because of suspension problems that can result in a loss of control, and

-The company will recall Jeep Grand Cherokees whose gas tanks are placed behind the rear axle so as to be vulnerable to an explosion in a rear-end collision.

Here's the Detroit Free Press story, attributing the recalls in part to a new, tougher approach from the National Highway Traffic Safety Administration and its new head Mark Rosekind, appointed about seven months ago. Coverage from ABC News points out that 75 deaths have been linked to the Grand Cherokee fuel tank problem.

Kudos to our friends at the Center for Auto Safety for their years of tireless work on the Grand Cherokee issue. 

Remote hacking of cars

The ability of hackers to hijack cars' computer systems has been in the news recently. (Go here for instance.) Fiat Chrysler is recalling 1.4 vehicle susceptible to hacking. The recalled vehicles are in these models:

• 2013-2015 MY Dodge Viper specialty vehicles
• 2013-2015 Ram 1500, 2500 and 3500 pickups
• 2013-2015 Ram 3500, 4500, 5500 Chassis Cabs
• 2014-2015 Jeep Grand Cherokee and Cherokee SUVs
• 2014-2015 Dodge Durango SUVs
• 2015 MY Chrysler 200, Chrysler 300 and Dodge Charger sedans
• 2015 Dodge Challenger sports coupes

Go here, where you can type in your vehicle's VIN to see if your vehicle is subject to the recall.

And read Mary Beth Quirk's article to learn all about the problem.

What is healthy anyway?

To find out, go down on the pizza farm by clicking here or on the embedded video below.

  

 

D.C. Circuit holds Texas bank has standing to challenge CFPB's constitutionality

Just one day after a Senate Judiciary Committee hearing focusing on the constitutional challenge to the CFPB in State National Bank of Big Spring v. Lew, the D.C. Circuit has issued an opinion allowing that challenge to go forward on the merits and reversing the district court's dismissal on standing grounds. I testified in defense of the Bureau yesterday, as did Adam Levitin of Georgetown Law; C. Boyden Gray, counsel to Big Spring bank, testified in support of his constitutional theories. Thankfully, neither Adam nor I ventured any predictions about standing. Instead, we confined our comments to the merits. And I remain just as confident that these challenges will fail on the merits--just as they have already failed in four other federal courts.

Today's D.C. Circuit decision, written by Judge Kavanaugh and joined by Judges Rogers and Pillard, is quite a narrow one. It does not say (or event hint) anything about the merits of any of Big Spring's separation-of-powers arguments. Instead, the court holds the following:

1. The bank has standing to challenge the CFPB's constitutionality because it is regulated by, among other things, the CFPB's Remittance Rule and has "alleged that it must now monitor its remittances" to ensure whether they fall within a safe harbor to the rule. The challenge is also ripe because the bank need not violate the law and wait for an enforcement action--it need not "bet the farm," in other words--to challenge "the legality of the regulating agency itself."

2. The bank likewise has standing to challenge President Obama's recess appointment, for the same reasons. But the D.C. Circuit "leave[s] it to the District Court to consider the significance of Director Cordray's later Senate confirmation and his subsequent ratification of actions he had taken while serving under a recess appointment." In practice, the confirmation and ratification will prove dispositive.

3. The bank lacks standing or ripeness to challenge the Financial Stability Oversight Council (FSOC) because the bank can't rely on the doctrine of competitor standing to argue that the designation of another entity as "too big to fail" somehow harms the bank. The designation by FSOC imposes a greater regulatory burden on designated entities; any harm to Big Spring as a result is attentuated at best.

4. The States lack standing and ripeness to challenge Dodd-Frank's Order Liquidation Authority (OLA) for several independent reasons--mainly because the challenge is based on speculation about the government might wield its authority in potential future proceeding.

The good news here is that the D.C. Circuit has set things up nicely for the bank's inevitable loss on the merits. Right now, political opponents of the CFPB are using constitutional rhetoric as ammunition for their critiques of the agency as some kind of unaccountable rogue regulator. That becomes harder after an unbroken string of losses in the courts.

Food waste

Throwing away food -- huge amounts of perfectly good food -- is part of our culture -- at least for now. Each year, Americans throw away enough food to fill 730 large football stadiums. John Oliver says that two easy legal changes -- a tax credit for certain companies and sensibly regulating food "use-by" and "sell-by" dates -- would make a significant difference. I'm skeptical, but his piece on the topic is well worth viewing (and will have you laughing). Click here or on the embedded video below.

 

Will California's new kid vaccination law become a model for the country?

Laws in all states generally require kids to be vaccinated against various childhood diseases before they may attend school. (And, of course, school attendance itself is legally required.) But most of those laws have exceptions to accommodate parents' religious and philosophical objections. (And the laws don't require kids to be vaccinated when their medical conditions genuinely make vaccination hazardous.) In light of parental objection exemptions, vaccination rates have been dipping recently.

Enter California, which recently enacted SB277. With its enactment, California becomes the third state, along with Mississippi and West Virginia,  not to recognize any parental objection based on personal beliefs. Only medical exemptions remain.

Profs Michelle Mellow, David Studdert, and Wendy Parmet have written this piece on the California legislation for the New England Journal of Medicine. And Clifton Parker has reviewed the NEJM piece, focusing on whether the California legislation will spur other states to get rid of personal-belief exemptions. He notes the NEJM authors' views on why the legislative effort in California succeeded:

• Supporters in the California Legislature did not bow to considerable pressure to abandon the measure.

• The state health department publicized data showing that rates of personal-belief exemptions in California have doubled since 2007, and analysts noted that vaccination coverage is low enough to jeopardize "herd immunity" in about 25 percent of California's schools. Such immunity occurs when enough people have been vaccinated that their collective immunity provides a measure of protection for those who are not immune.

• Research showed that a lack of vaccination compliance was most likely to blame for the 2015 measles outbreak in Disneyland. That incident created a political opportunity to advance the vaccination cause, the professors wrote.

• Finally, the bill's proponents "focused on the specific threat to schoolchildren who are too medically fragile to receive vaccinations, effectively framing vaccine refusal as a decision that endangers others rather than a purely personal one."

The Hill: Cruz calls for abolishing the Consumer Financial Protection Bureau

Here.  But what is Trump's position on the CFPB?

Third Circuit joins circuit consensus on Comcast, also reaffirms that standing need not be established for each class member

Yesterday, in a product-defect class action about Volvos with faulty sunroofs, the Third Circuit addressed two important class action questions -- one arising in the wake of the Supreme Court's decision in Comcast Corp. v. Behrend, the other to be examined in the upcoming term in Tyson Foods v. Bouaphakeo.

The Comcast question, which we've discussed previously on the blog (for instance, here), is whether a class may be certified if class members' damages must be measured individually. Joining the unanimous view of the circuits to have addressed the question (the First, Second, Fifth, Sixth, Seventh, Ninth, and Tenth, by my court), the Third Circuit answered yes. On Comcast, the court explained:

Volvo relies on Comcast for the proposition that Plaintiffs must show that “‘damages are susceptible of measurement across the entire class for purposes of Rule 23(b)(3).’” Volvo Br. 44 (quoting Comcast, 133 S. Ct. at 1433). In so doing, Volvo selectively quotes from Comcast as though the Court were creating a broad-based rule applicable to Rule 23(b)(3). Yet the Supreme Court specifically noted that it was not breaking any new ground by stating at the beginning of its opinion: “This case thus turns on the straightforward application of class-certification principles.” Comcast, 133 S. Ct. at 1433. A close reading of the text above makes it clear that the predominance analysis was specific to the antitrust claim at issue. That is eminently sensible. Every question of class certification will depend on the nature of the claims and evidence presented by the plaintiffs.

The question shared in common with Bouaphakeo (pronounced "boo-uh-fuh-KAY-oh"; you can find the papers at SCOTUSBlog, here) is whether the possibility that one or more class members may not have been injured defeats standing for the class. On this issue, the Third Circuit again aligned itself with the consensus position among the federal circuits that standing for all class members need not be shown:

[A] class action is a representative action brought by a named plaintiff or plaintiffs. Named plaintiffs are the individuals who seek to invoke the court’s jurisdiction and they are held accountable for satisfying jurisdiction. Thus, a class action is permissible so long as at least one named plaintiff has standing. Requiring individual standing of all class members would eviscerate the representative nature of the class action. It would also fail to recognize that the certified class is treated as a legally distinct entity even though the outcome of such an action is binding on the class.

(Citations omitted.) The court went on to note that the Supreme Court has treated representatives' standing as sufficient in a variety of contexts.

As the Third Circuit's reasoning demonstrates, a contrary holding on the standing question would be a sweeping one that would jeopardize many class actions. Hopefully the standing challenge that the Third Circuit rejected here is one that the Supreme Court will bury once and for all in Bouaphakeo.

You can read the Third Circuit's whole decision in Neale v. Volvo Cars of North America LLC here.

[Correction: this post originally mixed up the date argued and the date decided, and as a result misindentified the date of decision as June 2 rather than July 22. The post has now been updated. Thanks to an anonymous commenter for flagging the error.]