Consumer Law & Policy Blog

Judicial decision and moving papers in trademark suit against Amazon to be unsealed

We told you in May that Public Citizen was representing Prof. Rebecca Tushnet of Georgetown Law in seeking to intervene and unseal court documents in a trademark dispute between Amazon.com and the maker of a dietary supplement called SeroVital. The district court denied summary judgment to Amazon this past spring, but key facts on which the court relied -- and therefore the heart of its reasoning -- were redacted from the opinion (as well as from the summary judgment papers that the parties filed). As a result, the public and scholars like Prof. Tushnet who study IP remained in the dark about where the threshold for a valid claim lies and why the district court ruled as it did.

SanMedica opposed Prof. Tushnet's intervention (though Amazon, admirably, did not, and early on indicated a willingness to work with us). The district court granted intervention in November.

Subsequently, the parties reached an agreement to unseal almost all of the material Prof. Tushnet sought, paving the way for the lifting of most redactions in the opinion so that the public can finally understand what this case means for trademark law.

Today, the district court granted the joint motion to provide for the unsealing of the case, through a process that should culminate in late January.

This result is a welcome one in an era in which too many courts are sealing too much information too easily, thereby restricting the public's First Amendment right of access to judicial records.

Read more about the case here.

The shrinking middle class

...is the subject of a recent article from FiveThirtyEight, which explains how the middle class has shrunk over the past 45 years and where those formerly in the middle class have gone (economically speaking). And where have they gone? More Americans are now either at the extremes of wealth or poverty than in the middle (defined as earning between 2/3 and twice the national median income) than at any time since 1971. The article also breaks down the shift in terms of demographics.

Here's the story.

WSJ article on CFPB actions against payday lenders

The Wall Street Journal reports today on the enforcement actions taken yesterday by the Consumer Financial Protection Bureau and puts them in context of CFPB's  upcoming payday lending regulation.

The article is here. (Subscription may be required.)

"The Experts Were Wrong" about the cheapest places for health care

The New York Times explains, with maps.

Pharma company CEO Martin Shkreli arrested

The controversial Turing Pharmaceuticals CEO was arrested today for wire and securities fraud. The New York Times explains succinctly why Skhreli has become symbolic of what's wrong in the industry:

Mr. Shkreli has emerged as a symbol of pharmaceutical greed for acquiring a decades-old drug used to treat an infection that can be devastating for babies and people with AIDS and, overnight, raising the price to $750 a pill from $13.50. His only mistake, he later conceded, was not raising the price more.

Here's the story about his arrest. Here's a detailed profile from last week. See our prior discussion about drug price spikes (citing Turing as an example) here.

CFPB acts against aggregators for online trafficking of personal information

The Consumer Financial Protection Bureau today took separate actions against a company and an individual that resold sensitive personal data to lenders and debt collectors, allegedly exposing millions of consumers to harassment and deceit.

In a complaint filed in federal court, the CFPB alleged that T3Leads bought and sold personal information from payday and installment loan applications without properly vetting buyers and sellers. It also alleges that T3Leads’ owners unlawfully aided the company’s violations. In addition to monetary relief, the CFPB seeks to require T3Leads to clean up its business practices.

In a separate matter, the CFPB took action against Eric V. Sancho, who operated a company called Lead Publisher that sold leads to fraudulent debt collectors without regard for how they would use the data. The CFPB ordered Sancho to disgorge $21,151 he made illegally and banned him from the financial products and consumer leads industries.

The CFPB's press release is here.

LifeLock to Pay $100 Million to Consumers to Settle FTC Charges

The Federal Trade Commission today announced a settlement providing for the largest monetary award ever obtained by the FTC in an order enforcement action: LifeLock will pay $100 million to settle  contempt charges that it violated a 2010 federal court order that requires the company to secure consumers’ personal information and prohibits the company from deceptive advertising. 

The FTC's press release explains:

The FTC’s filing in the case alleged that LifeLock violated four components of the 2010 order. First, the FTC alleged that from at least October 2012 through March 2014, LifeLock failed to establish and maintain a comprehensive information security program to protect users’ sensitive personal information including their social security, credit card and bank account numbers.

Second, the filing alleged that during this period LifeLock falsely advertised that it protected consumers’ sensitive data with the same high-level safeguards used by financial institutions. Third, the FTC alleged that, from January 2012 through December 2014, LifeLock falsely advertised  that it would send alerts “as soon as” it received any indication that a consumer may be a victim of identity theft. Finally, the FTC alleged that the company failed to abide by the order’s recordkeeping requirements.

Under the terms of the settlement, LifeLock must deposit $100 million into the registry of the U.S. District Court for the District of Arizona. Of that $100 million, $68 million may be used to redress fees paid to LifeLock by class action consumers who were allegedly injured by the same behavior alleged by the FTC. These funds, however, must be paid directly to and received by consumers, and may not be used for any administrative or legal costs associated with the class action.

Any money not received by consumers in the class action settlement or through settlements between LifeLock and state attorneys general will be provided to the FTC for use in further consumer redress.

In addition to the settlement’s monetary provisions, recordkeeping provisions similar to those in the 2010 order have been extended to 13 years from the date of the original order.

 

SCOTUSBlog goes in-depth on the latest Obamacare challenge

A series of pieces in a SCOTUSBlog symposium consider various aspects of the pending religious challenge to Obamacare's conception mandate, which we've previously covered here and here. Later this term, the Supreme Court will hear seven cases on this subject known together by the name of the lead case, Zubik v. Burwell. The question is whether the Affordable Care Act's mandate that employers provide contraception violates the Religious Freedom Restoration Act as to religious employers, even when those employers are permitted to opt out.

So far, the Symposium includes these pieces:

12.16.15 Helen Alvare: Let’s hope we get a “compelling state interest” analysis this time around
12.16.15 Leslie Griffin: The missing interest in the contraceptive mandate cases — Catholic women
12.15.15 Erin Morrow Hawley: Administrative law lessons from King v. Burwell
12.15.15 Ira Lupu and Robert Tuttle: Religious opt-outs or religious vetoes?
12.14.15 John Bursch: Contraceptive mandate cases – why the Supreme Court will instruct lower federal courts to stop second-guessing religious beliefs
12.14.15 Frederick Gedicks: Adjudicating “substantial” burdens

Read them here.

Philips Uses the Internet of Things to Block Customers' "Freedom to Innovate"

by Paul Alan Levy

The Internet of Things and the world of smart devices has been heralded by industry giants like Philips for the conveniences that it provides for consumers, while allowing companies the “freedom to innovate,” but privacy advocates have long warned about the capabilities that such systems have to invade consumer privacy. 

But a recent controversy involving Philips reminds us of another downside of too much connectedness – vendors can use  their access to our devices to attack our existing rights.  Without any warning to its users, Philips disseminated a software update that rendered its Hue lighting system unable to be operated with replacement bulbs provided by third-party vendors.  In effect, Philips used its remote control over machines sold to consumers to interfere with the consumers’ “freedom to innovate” by adapting their equipment to third-party parts.

In response to wide-spread condemnation, Philips has promised to send out a new software update that rescinds the non-interoperability restrictions.  But its customers, and others tempted by this “smart”technology, should heed the warning.

Another danger in the fine print: choice of law provisions

The Washington Post explains how an employee who works in Maryland asserting rights under Maryland law in a Maryland court might be out of luck: his contract with his employer says that Georgia law applies.

It's getting easier for companies to stick choice of law provisions into contractual fine print and thereby pick the state law most friendly to the companies, the Post reports.

Read the story here.