Consumer Law & Policy Blog

State AGs write Trump saying that Mulvaney is unfit to run the CFPB

Read this article on the topic by Kate Berry. The Hill has coverage too.

Update: Read the AG's letter.

Second Circuit holds that federal wage-and-hour claims are arbitrable

Yesterday, in Rodriguez-Depena v. Parts Authority, Inc., the U.S. Court of Appeals for the Second Circuit held that wage-and-hour claims under the Fair Labor Standards Act (FLSA) can be forced into binding arbitration under a pre-dispute arbitration agreement. The court rejected the argument that the FLSA guarantees workers access to the courts and thus overrides pre-dispute arbitration agreements, relying on the Supreme Court's pro-arbitration decisions in Gilmer and Italian Colors.

New York Court of Appeals holds that N.Y. state law requires notice to all putative class members of an uncertified class when the case is dismissed or settles

In Desrosiers v. Perry Ellis Menswear, the New York Court of Appeals held today that, under New York state procedural law, all members of a putative, uncertified class must be notified of settlement or dismissal. (Since 2003, under Federal Rule of Civil Procedure 23, the rule is just the opposite, and notice is discretionary.) Here's a quick summary from the court's opinion:

CPLR 908 provides that "[a] class action shall not be dismissed, discontinued, or compromised without the approval of the court," and that "[n]otice of the proposed dismissal, discontinuance, or compromise shall be given to all members of the class in such manner as the court directs." On this appeal, we must determine whether CPLR 908 applies only to certified class actions, or also to class actions that are settled or dismissed before the class has been certified. We conclude that CPLR 908 applies in the pre-certification context. As a result, notice to putative class members of a proposed dismissal, discontinuance, or compromise must be given.

Should consumers “beware” social media as a trap for the unwary?

by Paul Alan Levy

Eugene Volokh has a short article this morning about the brief concurring opinion filed by an appellate judge in Breen v. Holmes , 2017 WL 6133325 (La. App. Dec. 7, 2017). The case concerned statements made on social media about a controversial decision by prosecutors not to pursue charges against someone who shot her husband, based on their evaluation of the strength of her claim of self-defense. The defendants opined, in strong terms, that the killer was a murderer who deserved to be prosecuted. The majority affirmed a dismissal under the state anti-SLAPP statute, and one judge concurred, saying,

"I must express my concerns about the defendants’ statements. I suggest the statements were loose, gossipy, and reflected a lynch-mob mentality. The citizens of Louisiana should beware of the Internet and Facebook. You might find yourselves paying damages to someone."

Which toys are hazardous to kids?

As we enter into the holiday season's orgy of consumerism, you will want to avoid buying toys that risk killing or maiming kids. U.S. PIRG has published it's 32nd annual toy safety report, Trouble in Toyland, to help you do that.

Consumer Federation of America: Here's how to avoid being duped into buying a flood-damaged car

Many flood-damaged cars are all over the country in light of hurricanes Harvey and Irma, and some of them are being foisted on unsuspecting consumers. The Consumer Federation of America has some tips to avoid being duped.

13 tax law scholars/practitioners say that, among its other grave problems, republican tax bill will add more than $1 trillion to the deficit over next decade

Read The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the New Legislation, by 13 tax law scholars/practitioners. Here is the abstract:

This report describes various tax games, roadblocks, and glitches in the tax legislation currently before Congress. The complex rules proposed in the House and Senate bills will allow new tax games and planning opportunities for well-advised taxpayers, which will result in unanticipated consequences and costs. These costs may not currently be fully reflected in official estimates already showing the bills adding over $1 trillion to the deficit in the coming decade. Other proposed changes will encounter legal roadblocks that will jeopardize critical elements of the legislation. Finally, in other cases, technical glitches in the legislation may improperly and haphazardly penalize or benefit individual and corporate taxpayers. This report highlights particular areas of concern that have been identified by a number of leading tax academics, practitioners, and analysts.

Ninth Circuit rejects First Amendment petition clause challenge to arbitration agreement, saying that private party's conduct is not attributable to the state (for purposes of the "state action" doctrine)

Take a look at the Ninth Circuit's decision today in Roberts v. AT&T Mobility. Here's the court's description of the dispute:

Plaintiffs—AT&T customers and putative class representatives—contracted with AT&T for wireless data service plans. Their contracts included arbitration agreements. Plaintiffs allege AT&T falsely advertised that its mobile service customers could use “unlimited data,” but actually “throttled”—intentionally slowed down—customers’ data speeds once reaching “secret data usage caps” between two and five gigabytes. Plaintiffs claim a phone’s key functions, such as streaming video or browsing webpages, are useless at “throttled” speeds.

Plaintiffs filed a putative class action, alleging statutory and common law consumer protection and false advertising claims under California and Alabama law. AT&T moved to compel arbitration in light of the Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011),“that the FAA preempts state law deeming AT&T’s arbitration provision to be unconscionable.” Plaintiffs opposed the motion on First Amendment grounds. They argued that an order forcing arbitration would violate the Petition Clause, as they “did not knowingly and voluntarily give up their right to have a court adjudicate their claims... .” 

The Ninth Circuit nixed the argument without getting to the merits, holding that

There is no state action here. First, AT&T’s conduct must be fairly attributable to the state, and Denver Area [Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996)] did not hold otherwise. Second, AT&T is not a state actor under the “encouragement” test. The FAA merely gives AT&T the private choice to arbitrate, and does not “encourage” arbitration such that AT&T’s conduct is attributable to the state. 

Article on the practical implications of the Supreme Court's decision in Bristol-Myers Squibb

Law profs Andrew Bradt and D. Theodore Rave have written Aggregation on Defendants' Terms: Bristol-Myers Squibb and the Federalization of Mass Tort Litigation. Here is the abstract: 

Although it is destined for the personal-jurisdiction canon, the Supreme Court’s 8-1 decision in Bristol-Myers Squibb v. Superior Court does little to clarify that notoriously hazy doctrine. It does, however, significantly alter the balance of power in complex litigation. Bristol-Myers is a landmark because it makes both mass-tort class actions and mass joinders impracticable in almost any state courts outside of the defendant’s home states. With federal courts already hostile toward class actions, if plaintiffs want to aggregate, they will have to do so on the defendant’s terms: either on the defendant’s home turf or in federal multidistrict litigation (MDL). Faced with this choice, we believe that most plaintiffs will turn to MDL. The result will be the culmination of a trend toward the federalization of mass-tort litigation in MDL, which has grown to make up an astonishing one-third of the federal docket. In this paper, we examine why Bristol-Myers will have this effect and explain how MDL’s hybrid structure facilitates centralized mass-tort litigation in federal courts, even as the Court’s restrictive view on personal jurisdiction prevents similar aggregation in state court. MDL cuts this Gordian knot by formally adhering to the vision of vertical and horizontal federalism underlying both diversity jurisdiction and Bristol-Myers, while also paradoxically undermining that vision in service of mass resolution. What will result is centralization of even more power over mass-tort litigation in the hands of the MDL judge and lead lawyers that judge selects to run the litigation — a prospect that comes with both opportunities and risks.

"U.S. drops proposal to force airlines to disclose bag fees"

An Obama administration proposal that would have required airlines disclose checked and carry-on bag fees at the start of a ticket purchase rather than later is being dropped by the Department of Transportation. The Associated Press story, via the Chicago Tribune, is here.