Consumer Law & Policy Blog

New website to track regulatory delays

At http://safeguardsdelayed.org, Public Citizen will keep track, on a daily basis, of regulations that have been held up by the U.S. Office of Information and Regulatory Affairs, which reviews all significant safety regulations before they are implemented and has been the source of lengthy delays for numerous important regulations. Although OIRA is supposed to complete its review within 90 days (with one 30-day extension available), regulations have lingered in limbo there for many months, even years. (For our prior discussion of one egregious example from the auto-safety context, see here.)

As of this posting, the new website's "Delay Tracker Dashboard" notes that 23 rules are over the 120-day limit right now. The site also informs us that:

• Rules addressing child nutrition, oil pipeline hazards and discrimination against people with disabilities are among those experiencing the greatest delays.

• Regulatory delays have a high price. Recent regulatory delays at OIRA that exceeded the statutory limit cost no less than $12 billion overall. Faster rulemaking could have saved thousands of lives, prevented thousands of injuries and kept millions of Americans from getting sick.

• In 2014, 33 proposed rules were approved without changes, and 24 rules were withdrawn by the agencies from which they originated because OIRA would not approve them.

Hopefully this new tool will enable advocates to shine on light on an underscrutinized and sometimes dysfunctional aspect of the federal regulatory process.

"How President Obama and Congress ignored food safety"

Politico has this story about implementation -- or lack thereof -- of the 2010 Food Safety Modernization Act. Here is the gist of it:

On paper, the law that Congress passed in late 2010 — known as the Food Safety Modernization Act — was bigger than anything since Teddy Roosevelt cleaned up the meatpacking industry. The law mandated more inspections and much tougher anti-contamination standards for everything from peaches to imported pesto sauce, and it placed more emphasis on preventing outbreaks than on chasing them down after people become sick.

But almost five years later, not one of the sweeping new rules has been implemented and funding is more than $276 million behind where it needs to be. A law that could have been legacy-defining for President Barack Obama instead represents a startling example of a broad and bipartisan policy initiative stymied by politics and the neglect of some of its strongest proponents.

 

What kind of car is the best for the environment, most fuel efficient, and easiest on the wallet?

That's the question consumer reporter Jerry Hirsch, with help from the Union of Concerned Scientists, tries to answer in this article.

New appellate court decision on FDCPA

Deciding a case under the Fair Debt Collection Practices Act, the Third Circuit held this week that debt collectors bear the burden of proving that their contacts with third parties fall under an exception to a ban on such contact when pursuing repayment from consumers. The court summarized the case this way:

Under the Fair Debt Collection Practices Act ... , a debt collector is liable to a consumer for contacting third parties in pursuit of that consumer’s debt unless the communication falls under a statutory exception. One of those exceptions covers communication with a third party “for the purpose of acquiring location information about the consumer” but, even then, prohibits more than one such contact “unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information.” 15 U.S.C. § 1692b. In this appeal following a jury verdict and judgment entered against a debt collector for repeated contact with third parties, we consider a matter of first impression among the Courts of Appeals: whether the burden in such a case is on the debt collector to prove or the consumer to disprove that the challenged third-party communications fit within § 1692b’s exception for acquisition of location information. We conclude that the debt collector bears that burden[.]

The court's opinion is here.

Car rental tips for consumers

Consumer reporter Michelle Singletary has written this article warning consumers about potential car-rental snafus, with a focus on how to insure the car. Some of her key tips:

●Double-check ahead of time what your personal auto policy covers for a rental, including whether you’re covered for “loss of use,” which is a charge you could have to pay while the vehicle is being repaired.

●Read your credit card agreement. Really pore over the conditions related to rental cars. ***

●Pay attention to the exclusions and restrictions. [Sometimes] the secondary coverage provides only collision damage to the rented vehicle. It does not cover injuries to [the renters] or anyone else. It doesn’t cover damages to other vehicles or property. And not all vehicle types are covered. *** [It may not cover really expensive cars at all.]

●The secondary insurance might not kick in if you rent the vehicle for longer than a certain number of days.

●Be sure to take pictures when you return the car.

●If you don’t want to risk an auto insurance claim, consider getting primary coverage from a third-party company. Shop around for rates. ***

CFPB and DOJ Address Discriminatory Auto Loan Pricing by Honda

The Consumer Financial Protection Bureau and Department of Justice yesterday resolved an action with American Honda Finance Corporation concerning discretionary auto loan pricing and compensation practices.

The CFPB explains: "Honda’s past practices resulted in thousands of African-American, Hispanic, and Asian and Pacific Islander borrowers paying higher interest rates than white borrowers for their auto loans, without regard to their creditworthiness. As part of today’s order, Honda will change its pricing and compensation system to substantially reduce dealer discretion and minimize the risks of discrimination, and will pay $24 million in restitution to affected borrowers."

The CFPB's full press release is here.

The Ninth Circuit Botches a Trademark Case About Search Engines

by Paul Alan Levy

In its decision issued last week about the application of trademark law to the operation of online search engines, Multi Time Machine v. Amazon the Ninth Circuit has taken a dangerous step backwards. The case might, however, prove to be the vehicle by which that court wipes out the bad precedent on which the case is founded and thus protects consumers from a range of abusive uses of trademark law to suppress both consumer commentary and effective competition.

The Majority and Minority Opinions

Multi Time Machine v. Amazon arose out of searches done by potential customers of Amazon’s vast commercial web site using “mtm special ops,” the name of a fancy watch made by the plaintiff, Multi Time Machine,  as a search term.  Multi Time Machine apparently does not allow its watches to be sold through Amazon.  Applying the Ninth Circuit created doctrine of initial interest confusion, and performing a results-oriented recitation of the Sleekcraft factors — that circuit’s version of the “likelihood-of-confusion factors” — the panel majority, in an opinion by Judge Bea, ruled that there was sufficient evidence to preclude summary judgment on the question whether there was likely confusion on the part users seeing this list of search results about whether one or more of the search results (the panel did not say which one was confusing) would lead to a page where they could buy or learn more about plaintiff’s product.  Although each of the eight listings for non-MTM watches identifies the MTM competitor’s brand of the watch that could be accessed through the hyperlink included in the listing (two of the links are for books rather than watches), the majority singled out the fact that the search term appears three times on the page, and the absence of any disclaimer provided by Amazon specifying that none of the ten main links leads to a page where plaintiff’s product can be bought. 

Challenge to recent Fourth Circuit decision on false advertising to consumers

Last month, the Fourth Circuit held in In re GNC Corp. that "to state a false advertising claim on a theory that representations have been proven to be false, plaintiffs must allege that all reasonable experts in the field agree that the representations are false.” -- F.3d --, 2015 WL 3798174, at *7 (4th Cir. June 19, 2015). Yes, you read that correctly: without unanimity among experts, a false advertising case must be tossed. This holding came in a case brought by consumers under various state consumer protection laws. But the court did not directly construe those laws. Rather, it analogized to its understanding of precedents under section 43(a) of the Lanham Act.

A group of academics led by Georgetown Law prof Rebecca Tushnet have filed this amicus brief arguing that the Fourth Circuit misunderstood "false advertising" under the Lanham Act and the legal concept of "falsity" more generally.

The plaintiffs' petition for rehearing and rehearing en banc challenges both the Fourth Circuit's understanding of falsity and its use of Lanham Act precedents rather than precedents under the Federal Trade Commission Act (on which many state consumer protection laws are based).

Competing visions of the future of the U.S. economy for workers

Jeb Bush: "work longer hours."

Hillary Clinton: "raise incomes."

NYT coverage of those statements and their implications here and here, respectively.

Watch CSPI's video about Coke and diabesity

The Center for Science in the Public Interest has remade Coke's famed “Hilltop” ad to drive home the relationship between sugary soft drink consumption and obesity (and obesity's cousin, diabetes). CSPI recently reported that its video has been view more than 300,000 times in English. To view the video in English, go here or click on the imbedded video below. The video also has been produced for viewing around the world with Spanish, French, Hindi, Mandarin, and Portuguese subtitles. Immediately below the embedded video is an old post concerning sugary soft drinks and Coke, which contains more interesting videos.

 

Grandpa's coca-cola

by Brian Wolfman

We have covered the interaction between consumer protection law and efforts to stem the obesity epidemic, including NYC Mayor Michael Bloomberg's effort to ban large-sized sugary drinks (which has failed so far in the New York courts).

If that topic interests you, I think you'll want to watch two videos, which are linked here and here and can be viewed by clicking on the embedded videos below. The first  video is the latest in Coke's anti-obesity advertising campaign, which suggests that you should eat, exercise, and otherwise emulate "grandpa's" lifestyle a couple generations ago--that is, you should walk and bike (rather than drive everywhere) and eat sit-down balanced meals (rather than grab junk food on the run). The second video drives home a point that Coke's ad ignores: grandpa's coke was less than a third the size of today's average coke.

Bloomberg gets that (as do others, such as Richard Posner).