Consumer Law & Policy Blog

The New Yorker takes you inside the eviction process in Milwaukee

A fascinating and heart-wrenching piece, here.

Intangible tort damages

Law professor Robert Rabin has written Intangible Damages in American Tort Law: A Roadmap. Here is the abstract:

This paper is meant to provide a succinct roadmap to the many pathways taken in providing recovery for intangible harm in tort. The paper was initially prepared for a comparative law conference, and in that setting, I assumed a lack of close familiarity with the historical origins and surprisingly broad expanse of recovery for intangible harm in American tort law. While succinctly presented, the present revised treatment, for those conversant with the US system, is meant to be comprehensive, addressing defamation and privacy, no-fault and tort reform, as well as the more conventional common law topics of intangible damages in cases of intentional and accidental harm.

This piece is a helfpul collection of ways in which U.S. tort law does (and does not) recognize certain kinds of difficult-to-quantify damages. Parts of Prof. Rabin's piece bring to mind some of the arguments in Spokeo, Inc. v. Robins, now pending in the Supreme Court. Spokeo concerns the circumstances under which a suit for statutory (non-actual) damages presents a "case" or "controversy" that may be resolved by an article III federal court.

A proposed insurance surcharge for people with a high body mass index (BMI)

NPR reports on a troubling proposal: penalizing insured individuals who don't maintain a low enough body mass index or BMI. New proposed regulations would permit employers to charge workers more for health insurance if they are overweight as measured by BMI.

There are several problems here. For instance, experts explain that millions of healthy Americans are technically "overweight" if BMI is used as a metric, and that using BMI would discriminate against African-Americans, Latinos, and low-income Americans, who are more likely to have a high BMI.

The story is well worth a listen, here.

Paper on Profiling and Targeting Consumers in the Internet of Things – A New Challenge for Consumer Law

Natali Helberger of the University of Amsterdam - Institute for Information Law has written Profiling and Targeting Consumers in the Internet of Things – A New Challenge for Consumer Law. Here is the abstract:

What does the shift from buying ‘things’ to buying ‘smart things’ imlies for consumers and consumer protection law and policy? The paper will focus in particular on the aspect of profiling and targeting in the Internet of Things. Profiling and targeting is a topic that is more commonly associated with data protection law and privacy. This chapter will demonstrate that consumer law, too, will have to play an important role in protecting the legitimate interests of consumers, and guaranteeing a fair balance between consumers, providers of smart things and services, advertisers, insurance companies and other parties.

Uber settles a couple class actions concerning the way it advertises its services

This article by Scott Graham explains that Uber has settled a couple cases about the way it advertises its $1-$2 so-called "safe ride" fee. Here are some excerpts:

The on-demand ride service Uber Technologies Inc. has agreed to pay $28.5 million to settle two San Francisco class actions over the way it advertises its services. Uber announced on its website Thursday that it is asking U.S. District Judge Jon Tigar for approval to settle Philliben v. Uber and Mena v. Uber. The cases were brought by Uber passengers over the company's "safe ride fee," which Uber claimed went to support its "industry leading" background-check process. ... [The plaintiff-passengers] argued that Uber's background checks are in fact "woefully inadequate and fall well short" of what's required of taxi drivers and other commercial providers of transportation. The fee of roughly $1 to $2 is charged to passengers on premium Uber rides such as UberX and UberXL, according to the latest complaint filed in the cases.  ... The company said on its website Thursday that as part of the settlement Uber has agreed to rename the "safe ride fee" a "booking fee" and apply it to both safety and operational costs. ... Uber will refund $28.5 million to about 25 million passengers who used the service from 2013 until January of this year, according to the announcement, which did not mention attorney fees. The parties agreed to the settlement in principle last month following several rounds of mediation last fall, court documents indicate.

Are these sensible cases? Is the settlement fair?

U.S. obesity rate hits a new high -- 28% (with another 35.6% classified as overweight)

According to this Gallup report, the U.S. obesity rate has hit a new high -- 28% -- up 2.5 percentage points since just 2008. Here are some excerpts from the report:

In addition to the 28.0% who are obese, another 35.6% of adults are classified as overweight, with 34.6% normal weight and 1.8% underweight, as reported in 2015. As with obesity, diabetes generally has trended upward since 2008. The rates of both conditions declined slightly in 2011, only to see annual upticks in the years since. The obesity and diabetes trends typically parallel each other given the close relationship between the two health conditions, but are not always in lockstep. In 2015, 11.4% of Americans reported having been diagnosed with diabetes, unchanged from 2014. This equates to about 27.9 million adults living with diabetes. * * * The obesity rate has continued to rise in the U.S. after leveling off from 2011 to 2013, and has done so despite rising public concern. Past research has demonstrated that obesity and its associated chronic conditions including diabetes cost the U.S. economy $153 billion per year in unplanned absenteeism due to poor health, a figure that has increased since the time of that study. And while blacks suffer disproportionately from chronic conditions associated with obesity, the sharp increase in obesity measured among whites since 2008 signifies that this is not a problem isolated to one racial or ethnic group.

Despite these sobering data public-health efforts regarding obesity and diabetes may be starting to work. In 2014, federal officials reported that, in the last decade, among children aged two to five, obesity rates have dropped significantly. And the report showed why: little kids are, among other things, drinking fewer sugary drinks and taking in fewer calories. Reducing obesity among little kids is considered important because little kids who are not obese are much less likely than their obese peers to be obese as adults.

Results in so-called no-injury class actions

A recent Public Citizen report maintains that the idea of the "no-injury" class action is a fiction. After all, wrongful corporate conduct may be harmful to consumers, and worthy of deterrence, even when it is difficult for many individuals to quantify the particular harms to them.

Many state and federal consumer-protection laws authorize consumers to sue for violations of those laws and to be compensated with statutory (not actual) damages only. Often, those suits are brought as class actions in which everyone in the proposed class is seeking only statutory (not actual) damages.

Law professor Joanna Shepherd has written about results in those kinds of cases in An Empirical Survey of No-Injury Class Actions. Here is the abstract:

This report empirically examines the allocation of settlements and awards in no-injury class actions among plaintiffs, attorneys, and cy pres funds. The results are based on my study of 432 no-injury class action settlements and trial awards from 2005-2015. The study finds that, on average, 60 percent of the total monetary award paid by the defendants was allocated to the plaintiffs’ class and 37.9 percent was allocated to attorneys’ fees. However, because many settlements disperse the unclaimed portion of the settlement fund to a cy pres fund, the funds available to class members at the time of settlement may significantly overstate the actual amount class members ultimately receive. Although 60 percent of the total monetary award may be available to class members, in reality, they typically receive less than 9 percent of the total. In comparison, class counsel receives an average of 37.9 percent of available funds, over 4 times the funds typically distributed to the class. A result in which plaintiffs recover less than 10 percent of the award, with the rest going to lawyers or unrelated groups, clearly does not achieve the compensatory goals of class actions. Instead, the costs of no-injury class actions are passed on to consumers in the form of higher prices, lower product quality, and reduced innovation.

Pew Trust Mobile Payments Page Goes Live

Here, complete with a white paper from Mark Budnitz. Here are the first four paragraphs of that white paper:

As the popularity of mobile payments grows, it becomes increasingly important to understand the legal framework in which these transactions take place. Consumers need to know their rights and responsibilities. They need to be alert to the financial risks they are exposed to and the legal remedies available when transactions go awry. Financial institutions and other companies that facilitate mobile payments need clear rules describing their obligations, rights, and liability as they develop new mobile payment products and contract with consumers for mobile payment services. Finally, policymakers need to understand the impact of applicable laws and rules on consumers and mobile payment providers so they can evaluate whether they are adequate, and if not, what new provisions are needed.

This report describes and analyzes the legal framework of mobile payments. That framework consists of a wide variety of state and federal statutes, regulations, agency "guidance," and court decisions. Determining which laws apply to mobile payments is complicated by several factors. For example, many federal agencies have regulatory, supervisory, or enforcement authority over various aspects of mobile payments services when offered by financial institutions under their jurisdiction. These include the "prudential regulators," the Office of Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp., and the National Credit Union Administration. Companies not within legal definitions of financial institutions, such as PayPal and other nonbanks, are subject to the authority of the Consumer Financial Protection Bureau and the Federal Trade Commission. Telecommunications companies are regulated by the Federal Communications Commission. State agencies, such as bank commissioners and attorneys general, enforce their laws applicable to mobile payments.

A final factor making it difficult to determine which laws apply is the flood of new products and services that the industry offers, as well as the different types of situations in which consumers make mobile payments. For example, most consumers charge their mobile payments for goods and services to credit cards, debit cards linked to a checking account, or prepaid card accounts. Others agree to charges being placed on their wireless carrier’s monthly bills along with the communications charges for using their cellphones. Entirely different laws apply depending on which type of account the consumer uses. Issues that arise vary significantly, from the circumstances under which online contract provisions are enforceable to a company’s liability for data security breaches and privacy invasions.1 Applicable laws range from centuries-old contract law and tort theories to new federal and state statutes. In some instances, no law at all applies.

What emerges is a patchwork of laws that is characterized to a large extent by three features: gaps (situations in which no law applies); ambiguities (where it is not clear whether a law applies); and overlap (where two or more laws apply to the  same situation and more than one agency has legal authority over the same type of conduct).

 

 

Food expiration dates

Do expiration (or "sell by") dates on packaged/bottled foods protect consumers' health and safety, or do they just encourage consumers to throw out perfectly good food (and then buy more)? Or is the answer somewhere in between?

In September 2013, the Natural Resources Defense Council and the Harvard Food Law and Policy Clinic published The Dating Game: How Confusing Food Date Labels Lead to Food Waste in America, a comprehensive report that criticized the current dating system and proposed a series of policy recommendations. The report found that "the waste of edible food by consumers, retailers, and manufacturers poses a significant burden to the American food system. Wasted food costs consumers and industry money; squanders important natural resources that are used to grow, process, distribute, and store America’s food supply; and represents a missed opportunity to feed the millions of food insecure households in the United States that are struggling to access healthy, affordable food. Misinterpretation of the date labels on foods is a key factor leading to this waste."

Now, Emily Broad Leib has penned this LA Times op-ed entitled Is that milk past its 'sell by' date? Drink it anyway. She, too, argues that our current expiration-date food labeling system causes us to waste huge amounts of good food.

Watch this interesting video to learn more about the issue.

On whether stores that sell expired merchandise are deceiving their customers, go here. 

Is the U.S. tradition of restaurant tipping fair (or unfair) to restaurant workers and consumers?

The issue has been getting attention recently and is the subject of The Case for Tipping and Unrestricted Tip-Pooling by law profs Samuel Estreicher and Jonathan Remy Nash. Here is the abstract:

Going against the well-established tipping norm in the United States, a growing number of restaurant owners are moving to ban tipping, and instead raise prices, in their restaurants. They argue that existing law precludes them from sharing tips with “back-of-the-house” employees (like chefs and dishwashers), and thus makes it hard to compensate those employees fairly. We argue that the movement against tipping is ill-advised. Tipping is a valuable social institution that allows customers to monitor service where management cannot. The better answer is to remove legal restrictions on tip-pooling. Pooling tips among a broad swath of employees (other than management-level employees) is in keeping with the cooperative effort that underlies the provision of service in settings like restaurants.

Read Scott's interesting post on the topic from last October.