Consumer Law & Policy Blog

What Made Starbucks Change its Arbitration Clause?

by Jeff Sovern

Gregory Gauthier has pointed out that Starbucks has changed its arbitration clause and wonders why. The old version is described here.  The new version is somewhat less onerous. For example, it permits the arbitration to be "held in a reasonably convenient location in the state in which you reside or at another mutually agreed location," while the old version required the arbitration to take place in Seattle unless otherwise agreed.  If you have a thought as to this or other changes, please comment below.

Working at a meat processing plant is really dangerous

We've previously discussed Tyson Foods v. Bouaphakeo, the pending Supreme Court case regarding whether workers at an Iowa meat-processing plant can sue as a class over violations of wage-and-hour protections.

For a bit of (unfortunately gruesome) context, check out this recent article from Buzzfeed, "America’s Biggest Meat Producer Averages One Amputation Per Month," about OSHA data on Tyson. Scary stuff.

Court upholds NYC sodium warnings

As NPR reports this morning, a New York state trial court (misleadingly named the "New York State Supreme Court" apparently for historical reasons) upheld the City's requirement that restaurants label high sodium menu items. The story explains, "Mandated salt warnings on menus are intended to make New Yorkers more aware of the link between excessive salt in their diets and high blood pressure, heart disease and stroke, according to health officials."

Here's what the label looks like:

 

The National Restaurant Association, which brought the case, is mulling an appeal.

Listen to the story here.

Are you Teaching or Interested in Teaching Consumer Law?

On May 20-21, the Center for Consumer Law at the University of Houston Law Center will present its bi-annual conference for consumer law professors, adjunct professors, and those interested in teaching consumer law. The conference is especially valuable to anyone interested in teaching consumer law as an adjunct professor.

Registration forms, a tentative schedule and hotel information is now available for "Teaching Consumer Law in Our Popular Culture and Social Media.” This is the only Conference focusing on the teaching of consumer law, and will include discussions of teaching methods, substantive updates and discussions of current consumer law issues, empirical studies of consumer issues, as well as discussions about the CFPB and the FTC. Presenters include the top scholars from the U.S., as well as Canada, Japan, New Zealand, Nigeria, India, Holland, Denmark and China. 

For more information and to register, click here. 

FDA's plan to combat opioid addiction

Opioids include morphine, heroin, codeine, oxycodone, and hydrocodone. Many opioids are available by prescription to treat pain. Addiction to these drugs is on the rise. (Addiction to the illegal opioid heroin also is on the rise.)

Earlier this month, the federal Food and Drug Administration released its plan to reduce abuse of prescription opioids. Read about the plan here and here.  

Public Citizen: Deny federal funding to schools forcing students into arbitration

by Julie A. Murray, guest blogger

Today Public Citizen submitted a citizen petition to the Department of Education asking it to issue a rule that requires colleges to agree, as a condition on receipt of certain federal funding such as Stafford loans and Pell grants, not to include pre-dispute arbitration clauses in enrollment or other agreements with students. Forced arbitration clauses are a tool of choice among for-profit schools, which rely heavily on federal funding and have recently been at the center of numerous government investigations and lawsuits alleging fraud and other wrongdoing.

The petition describes recent cases in which students have been barred from pursuing claims against their schools in court because of arbitration agreements, including cases against the now-liquidated Corinthian Colleges, which collapsed last year under the weight of its own wrongdoing. The petition also highlights some of the fundamentally unfair arbitration clauses that schools have used, such as provisions requiring students to keep all aspects of an arbitration proceeding confidential, limiting an arbitrator’s remedial authority to award punitive or other damages, and sticking students with high costs or fees that would not apply in court. The petition makes the case that, whether or not these clauses are enforceable, they are effective at discouraging students from pursuing their claims. And when students have no access to the civil justice system, particularly to pursue justice in class or consolidated proceedings, the public and regulators are hampered in their ability to uncover wrongdoing that affects federal aid programs.

Take a look at the petition here. An appendix compiling recent arbitration provisions used by schools is here, and Public Citizen’s press release is here.

CFPB orders Citibank to provide relief to consumers for illegal debt sales and collection practices

The Consumer Financial Protection Bureau yesterday took two separate actions against Citibank for illegal debt sales and debt collection practices.

In the first action, the CFPB ordered Citibank to provide nearly $5 million in consumer relief and pay a $3 million penalty for selling credit card debt with inflated interest rates and for failing to forward consumer payments promptly to debt buyers.The order is here.

In the second action, taken against both Citibank and two debt collection law firms used by Citibank, arose from the firms' falsification of court documents filed in debt collection cases in New Jersey state courts. The CFPB ordered Citibank and the law firms to comply with a court order that Citibank refund $11 million to consumers and forgo collecting about $34 million from nearly 7,000 consumers. The two law firms must also pay penalties. The consent orders are here, here, and here.

The CFPB's press release is here.

 

David Adam Friedman Paper: Refining Advertising Regulation

David Adam Friedman of Willamette has written Refining Advertising Regulation.  Here's the abstract:

Why did the Federal Trade Commission (FTC) aggressively pursue Volkswagen’s claims about “clean-diesel” technology, while ignoring widespread practices like deceptive discount pricing? Why did the FTC offer formal guidance to industry about “native advertising,” but only casual guidance to consumers about widely-used, peer-review aggregators like Yelp! and Fandango?

For decades, the FTC has only loosely employed a cost-benefit-analysis approach toward prioritizing enforcement of advertising regulation. I contend that federal regulators can best refine enforcement priorities by looking to the information economics literature for an established framework for classifying advertising claims. This Article shows that classifying advertising into search claims, experience claims, and credence claims offers a structure for more rigorous cost-benefit analysis of enforcement opportunities. Expressly incorporating this search-experience-credence claim framework into regulatory decision making and prioritization will lead to improved stewardship of FTC resources.

Paul Bland: Notorious RBG Offers Hint to Whether Post-Scalia Court Will Be Better for Workers, Consumers

On HuffPo.

Prestigious Pets, or Litigious Pets? Dallas Pet Care Company Invokes Non-Disparagement Clause to Maintain Its Yelp Rating

by Paul Alan Levy

Until recently, a Dallas, Texas pet-sitting service called Prestigious Pets enjoyed a fairly high rating on Yelp – most of the reviews gave it five stars.  There were, however, two one-star dissents, one from Michelle D and one from Tatiana N, each of whom objected, in fairly mild terms, to some of Prestigious Pets' policies.    But that was before Prestigious Pets initiated a litigation campaign invoking a non-disparagement clause buried in the fine print of its standard form contract, along with vague claims of defamation, to try to get rid of the one-star reviews.