Consumer Law & Policy Blog

More on Spokeo

After learning that the plaintiff in Spokeo v. Robins won on remand from the Supreme Court, I ran into Spokeo Misspeaks, an article by law prof Lauren Willis. Here's the abstract:

Most commentators have critiqued the Supreme Court’s opinion in Spokeo, Inc. v. Robins for failing to answer the question presented. But in important ways, the Spokeo opinion does not merely fail to speak — it affirmatively misspeaks. This essay suggests that underlying the Justices’ inability to see how standing law ought to apply to the facts in Spokeo is a failure to appreciate the power that consumer reports have over individuals’ life prospects today. Worse, the Justices’ unawareness of their own ignorance leads them to afford Congress little deference in identifying injuries occurring in our new information society. Their meta-ignorance also induces the Justices to credit their own judgment over the judgment of the market about what consumer information is material to determinations about employment, credit, insurance, and other market transactions. These are strange moves to make in the name of standing, a doctrine founded on a belief in judicial restraint.

On remand from the Supreme Court: plaintiff has standing in Spokeo v. Robins

Many of our readers will recall the Supreme Court's decision last year in Spokeo v. Robins in which the Court explained, in general terms, what it means for a plaintiff to allege a "concrete" injury sufficient to establish article III standing. The Court then remanded the case to the Ninth Circuit for findings on "concreteness" measured against the plaintiff's claims under the Fair Credit Reporting Act. Today, some 15 months later, the Ninth Circuit held, in this opinion, that the plaintiff had alleged a concrete injury.

Here is the Ninth Circuit's informal summary of the opinion:

On remand from the United States Supreme Court, Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the panel reversed the district court’s dismissal of an action brought by Thomas Robins against Spokeo, Inc., alleging willful violations of the Fair Credit Reporting Act (“FCRA”); held that Robins’ alleged injuries were sufficiently concrete for the purposes of Article III standing; and concluded that because the alleged injuries were also sufficiently particularized to Robins and caused by Spokeo’s alleged FCRA violations that were redressable in court, Robins adequately alleged the elements necessary for Article III standing.   

Mortgage Default Rate Reported to be at Lowest Level in Decade; Could the CFPB be the Cause?

by Jeff Sovern

Here is a report on the mortgage default rate from Housing Wire. So we have a low mortgage default rate and record highs in consumer debt, as Brian reported earlier, half a dozen years after creation of the CFPB.  Yet conservatives want to eliminate or reduce the Bureau's power.   

CFP: Northeast Privacy Scholars Workshop

We received the following call for papers:

The Innovation Center for Law and Technology
at New York Law School

and

The Center on Law and Information Policy
at Fordham University School of Law

are pleased to issue this Call for Papers for the inaugural Northeast Privacy Scholars Workshop, which will take place at New York Law School on October 20, 2017.

The Workshop offers privacy scholars from diverse fields the opportunity to receive extensive, constructive commentary on their works-in-progress. We invite submissions on a variety of privacy-related topics and from a wide range of disciplines, including, but not limited to, law, social science, computer science, engineering, communications, and public policy.

The Workshop format is designed to facilitate discussion and commentary on papers that can benefit from them. Therefore, the Workshop will give preference to projects and papers that are sufficiently along to be read and critiqued, but not yet submitted for publication. There will be no presentations, only commentators and feedback from participants. Participants are expected to read all papers beforehand. Also, because feedback from a broad range of disciplines is important for interdisciplinary privacy scholarship, we ask that all participants stay for the entire one-day workshop.

Important Dates:

Abstracts due: August 20, 2017, by 5 PM

Selections made no later than: September 3, 2017, by 5 PM

Papers due and commentators assigned: September 20, 2017, by 5 PM

More information here.

More on all-time high consumer debt

Following up on an earlier post, this Reuters story by Jonathan Spicer reports that

Americans' debt level notched another record high in the second quarter, after having earlier in the year surpassed its pre-crisis peak, on the back of modest rises in mortgage, auto and credit card debt, where delinquencies jumped. Total U.S. household debt was $12.84 trillion in the three months to June, up $552 billion from a year ago, according to a Federal Reserve Bank of New York report published on Tuesday. The proportion of overall debt that was delinquent, at 4.8 percent, was on par with the previous quarter. However a red flag was raised over the transitions of credit card balances into delinquency, which the New York Fed said "ticked up notably."

Go here for the New York Fed's full report. If you look at pages 12 to 15, you'll see that the level of delinquency has dropped significantly since the Great Recession for most loan types, with one major exception: student loans.

End to ACA subsidies would cause huge increases in insurance premiums and in the federal deficit

Premiums for the most popular health insurance plans would shoot up 20 percent next year, and federal budget deficits would increase by $194 billion in the coming decade if President Trump carries out his threat to end certain subsidies paid under the Affordable Care Act to insurance companies for the benefit of low-income people, reports the New York Times, summarizing a Congressional Budget Office report released today.

The CBO report is here. The New York Times article about the CBO report is here.

Center for Auto Safety names new executive director

The Center for Auto Safety, the nation’s leading independent non-profit organization providing consumers a voice for auto safety, quality, and fuel economy, has announced the appointment of Jason K. Levine as its new Executive Director. Mr. Levine succeeds Clarence M. Ditlow III, who led the Center for 40 years, until his death last November.

Mr. Levine, a consumer protection attorney, has held leadership positions in three federal agencies, including Chief of Staff at the U.S. Consumer Product Safety Commission and Director of the Office of Congressional, Legislative, and Intergovernmental Affairs at the U.S. Office of Personnel Management.

The Center press announcement is here.

Should punitive damages be awarded in mass tort cases?

Law prof James Henderson says nope in The Impropriety of Punitive Damages in Mass Torts. Here is the abstract:

Punitive damages have been around for centuries in classic one-on-one tort actions and are here to stay. Mass torts, of more recent origin and not without difficulties, have matured to the point that this article is comfortable referring to most of them as traditional. Notwithstanding the legitimacy of both institutions when employed separately, loud warning signals should sound when, as with drinking and driving, they are combined. Potentially destructive mixes of punitive damages and mass torts have, unfortunately, been prevalent in traditional, fault-based mass tort actions. The difficulties are mostly administrative. Although punitive damages are conceptually compatible with fault-based mass torts, courts administer punitive awards in ways that are so capricious as to generate gross unfairness and inefficiency. And if for that reason the warning signals should be loud in connection with punitive awards in traditional mass torts, they should be downright deafening if and when courts consider awarding punitives in what this article refers to as emerging, nontraditional, enterprise-liability-based forms of mass tort.

Given that these serious difficulties cannot be eliminated by marginal reforms, this article argues that punitive damages are manifestly inappropriate in, and must be eliminated from, all forms of mass tort. Of course, a broad proscription would require courts to overrule precedent in connection with traditional mass torts, and this article explains how this could be accomplished. By contrast, such a proscription would come early enough in the development of emerging forms of mass tort to nip punitive awards in the bud without the need to overrule longstanding precedent. Thus, if courts are going to eliminate punitive awards in mass torts, now is the time for them to act.

In challenging new consumer-protection rules, opponents will claim that the CFPB was too cozy with consumer groups

That's the thrust of this American Banker article (possibly behind a paywall). Here is an excerpt:

Consumer groups have long denounced the influence of big banks and for-profit companies on agency rulemakings, often pointing to the number of meetings held between regulators and institutions about a proposal. Now, in an ironic twist, payday lenders and supporters of mandatory arbitration are using the same tactic in accusing the Consumer Financial Protection Bureau of disproportionately favoring consumer groups at the expense of industry. House Republicans and payday lending groups are hoping to use so-called ex parte communications with consumer groups as a basis for an eventual lawsuit against the mandatory arbitration and small-dollar lending rules. (The mandatory arbitration rule was finalized in July, while the payday lending ruleis expected to be released soon.)

Times Report on How Corporate Accountability Is Declining Under Trump

Here.  The article uses Wells Fargo as an example.  Here's an excerpt:

Will Wells Fargo be held to account for the many ways in which it mistreated its customers? The prospect of governmental action appears to be diminishing, and any fines it might face are likely to be at the low end of the scale based on recent enforcement trends since the start of the administration of President Trump.

Penalties imposed by financial regulators so far in 2017 are much lower than for the comparable period last year, according to The Wall Street Journal. That may be a reflection of the end of the financial crisis cases, but the new chairman of the Securities and Exchange Commission, Jay Clayton, stated during his confirmation hearing that “shareholders do bear those costs and we have to keep that in mind.”

* * *

Even private litigation by consumers against corporations would be substantially reduced under a bill passed by the House in March. One part in the legislation would require each member of a class action to show the same injuries as all others before a federal court can certify it to proceed, severely limiting the number of such cases when the harm may not be the same to all.