Consumer Law & Policy Blog

Industry Lawyer Fact Checks John Oliver on Robocalls

Earlier this week, we posted a link to a John Oliver segment on robocalls.  Eric J. Troutman fact checks Oliver here. Excerpt:

Assertion 5: Robocall Volume Exploded After A Court Decision Overturned the FCC’s Rules Expanding the TCPA

TCPAworld. com Accuracy Score: Liar liar pants on fire

This was the worst part of the bit.

Oliver states that robocalls exploded after ACA Int’l set aside the FCC’s expansion of the TCPA last year. He even throws up a blurry little graph to prove it. * * *

But wait a second. Take a close look at that graph.

What you’ll see is that robocalls actually exploded AFTER the 2015 Omnibus Ruling expanding the TCPA and BEFORE the court set aside those rulings. 

* * *

Lobbyists scuttle consumer product safety rules

The online journal FairWarning this week reported on how lobbyists from the law firm Bracewell LLP have "specialized in helping product makers thwart rulemaking by the Consumer Product Safety Commission."

One after another, industries have turned to Bracewell to fight unwanted federal standards, and they have not been disappointed. Along with the [recreational off-highway vehicle] rule, Bracewell and its clients in recent years have sidelined mandatory standards aimed at keeping toddlers from being strangled by window blind cords; avoiding carbon monoxide poisoning deaths from portable generators; and preventing thousands of finger amputations by table saws.

The article is here.

Anne Fleming: Consumer rights are worthless without enforcement

In The Conversation. Excerpt:

Compared with 1962, when President Kennedy put consumer concerns on the national agenda, ordinary Americans now have far more robust rights to safety, to information, to choice and to a fair hearing.

But consumer rights do not enforce themselves. Public enforcement requires funding and willing leaders. Private enforcement requires legal devices that allow consumers to pay attorneys for their work.

Without an ongoing commitment to enforcement, consumer rights may become paper tigers, offering the appearance of protection without any teeth.

“Dormant: The Consumer Financial Protection Bureau’s Law Enforcement Program in Decline”

That’s the title of a new report from Chris Peterson at the Consumer Federation of America. According to the executive summary:

This study analyzes whether the CFPB, under the Trump Administration, is delivering on its statutory law enforcement objectives and stated commitments to take aggressive action in the area of consumer law enforcement, particularly where complaint volume is the largest. To accomplish this, this study identifies and classifies every public enforcement action since the inception of the CFPB through the first three months of Director Kathleen Kraninger’s term in office.

Overall, this study finds that under the leadership of Acting Director Mick Mulvaney, and more recently, Director Kathy Kraninger, enforcement activity at the CFPB has declined to levels that are either nonexistent or significantly below that of the prior Administration, even in the areas where consumer complaint activity is the highest. The Bureau has announced only two cases each under authorities specifically given to the Bureau to address issues with credit reporting and mortgage lending, one case related to debt collection, and no cases related to student lending. Troublingly, the Bureau has also failed to announce or resolve a single antidiscrimination case.

Further, in addition to a decline in the overall volume of enforcement actions, this study shows significantly less monetary relief going to consumers. The CFPB returned about $43 million in restitution to consumers for each week of the Bureau’s first Director’s term in office. In the relatively few cases resolved since, this amount has plummeted to about $6.4 million per week under Acting Director Mulvaney and most recently dropped again to about $925,000 per week under Director Kraninger. The Bureau has not announced a single dollar of monetary relief in any of the high-volume complaint areas of credit reporting, debt collection, or student lending.

Overall, enforcement activity and relief to the consumer has declined since the appointment of Mick Mulvaney in 2017. And, despite being touted as one of Director Kraninger’s initial priorities for her term of leadership, law enforcement activity continues to remain significantly below earlier levels since her confirmation.

The full report is available here.

Bradley Paper: The Consumer Protection Ecosystem

Christopher G. Bradley of Kentucky has written The Consumer Protection Ecosystem: Law, Norms, and Technology. Here is the abstract:

Consumer law provokes fierce policy debate on issues from identity theft to online privacy, from arbitration clauses and class action lawsuits to Americans’ accumulation of debt and the unsavory practices sometimes used to collect. Pervasive technology in every aspect of consumer transacting has opened up many new fronts in these battles. Scholars, policymakers, and advocates have responded in kind, devoting increased energy to this area of law, which affects every single one of us, every single day. Despite its prominence, however, confusion persists regarding what consumer protection really is or does. The realities of social and technological change have not been integrated into legal analyses of consumer transactions. 

This Article constructs a novel and comprehensive model of the consumer protection ecosystem by contextualizing purely legal constraints amid the other realities of commercial relationships. Drawing on scholarship in the areas of technology, social change, and the law, the model lays out three basic types of constraints on the activities of participants in consumer commercial transactions: legal, technical, and social constraints. This model provides a basis for exploring how those constraints interact and shape behavior.

The model has significant ramifications for scholars, policymakers, and advocates. The model underscores why the area of consumer-facing commerce defies one-size-fits-all solutions; instead, it demands refined and layered consideration of consumers, merchants, and the commercial relationships they pursue, as well as the changes in the social and technological contexts of those relationships. This Article’s model provides a framework for that future research and debate.

 

John Oliver Takes on Robocalls

Or click here.

Blaming the victim for "misusing" dangerous products

Consumer Product Safety Commission commissioner Robert Adler and law prof Andrew Popper have written The Misuse of Product Misuse: Victim Blaming at Its Worst. Here is the abstract:

This paper addresses the legal consequences that surface when a consumer uses a product in a manner not specifically intended by that product's designer or manufacturer. If a product is used in a reasonably foreseeable manner, the fact that the use is at odds with a manufacturer’s intention should not be a basis to deny tort liability or limit the regulatory options of the Consumer Product Safety Commission. If a product proves to be unsafe, defective, dangerous, or otherwise hazardous to users and consumers, use patterns should not be the primary determinant in assessing regulatory and common law sanctions or consequences. While producers may wish to limit tort liability or regulatory impact by characterizing as wrongful all uses not fully consistent with specified instructions, limiting tort liability or regulatory impact is indefensible, inhumane, and at odds with common law tort principles and the clear purposes of the Consumer Product Safety Act. Penalizing consumers for uses that are reasonable but not expressly intended is little more than victim blaming. A legal culture that scapegoats consumers is justly seen as pathological regulatory capture. Ramped up consumer misuse standards reward those who create risks and punish those who are harmed. That cannot possibly be the goal of the common law or the legacy anticipated when the Consumer Product Safety Commission was formed nearly a half-century ago.

CFPB director appears at House oversight hearing

In the first Consumer Financial Protection Bureau oversight hearing of 2019, "Democrats repeatedly hammered Director Kathy Kraninger and GOP lawmakers for supporting recent changes at the agency." Rollcall has the story, here.

How the New US News Scholarly Impact Ranking Could Hurt Niche Subjects, Like Consumer Law

by Jeff Sovern

There's been a lot of talk among law professors about the US News plan to measure faculty scholarly impact in part by citations to faculty scholarship (see here for a blog post citing to commentary).  While for now US News says it will not incorporate the citation rankings into its general law school rankings, US News may in the future replace the faculty reputation measure to some extent with a measure of how frequently professors are cited.  That could create disturbing incentives for faculty hiring and retention, as well as affect what professors write about. 

To be more concrete, imagine that a law school is hiring a new professor and has two candidates.  One candidate writes about criminal law and the other writes about consumer law.  The law school wants to maximize its ranking, and so wants to hire the candidate whose work will be cited more.  The universe of people writing scholarly articles about criminal law is much larger than the universe of professors writing about consumer law, and so, all other things being equal, the criminal law professor is likely to rack up more citations and so help with the school's ranking more.  How do we know more people write about criminal law?  I did a search for "consumer law" on SSRN and got 637 hits. "Criminal law" by contrast elicited 7,867 hits, or more than a dozen times as many. Every law school offers criminal law courses, probably all have a full-time professor teaching in the area, and many have one or more professors writing in the area. But as of 2014, only about a third of law schools had a consumer law course of one sort or another (yes, I need to update that), and many of the courses were taught by adjuncts who have a day job and so are unlikely to find time to write about consumer law.  Fewer professors writing in an area means fewer people likely to cite your work. And so that means hiring the consumer law scholar could hurt your ranking as compared to hiring the criminal law professor. It also means that those seeking to become law professors should write in widely-taught areas to make themselves more attractive to law schools.

Now maybe you're thinking that even within broad areas like criminal law, professors are apt to specialize when it comes to writing and so as a practical matter writing about a consumer law topic is no different than writing about a criminal law topic. So let's compare the number of papers on SRRN in a couple of specific areas within criminal law and consumer law.  Homicide drew 767 hits while "mens rea" got 479 hits. "Debt collection" elicited 179 hits while "credit reporting" got 135.  Those differences are less dramatic, but the number of criminal law hits are still multiples of the consumer law hits. No doubt SSRN is an imperfect measure of the amount of scholarship in a particular area, but it would have to be off by a lot to make those differences insignificant. It makes intuitive sense that a subject that is taught at fewer law schools will be written about less--and so generate fewer citations. 

This isn't just bad for consumer law scholars. It's also bad for consumer law, and indeed any subject that isn't taught at all or nearly all law schools.  If you think, as I do, that scholarship is valuable, and law schools stop producing consumer law scholarship because they stop hiring consumer law professors, then society will have lost something. Society will have gained instead more articles about widely-taught subjects, but surely the marginal value of yet another article on criminal law is less than the marginal value of an article in an area less traveled.

 

Robocalls, the TCPA, and Professional Plaintiffs

by Jeff Sovern

The next edition of our casebook will have a lot more about robocalls.  According to a letter from the attorneys general of all 50 states dated yesterday, robocalls and telemarketing calls are the top source of consumer complaints at many AG's offices.  The Telephone Consumer Protection Act, which outlaws some robocalls, also offers some interesting lessons about consumer lawmaking.  The TCPA provides for statutory damages of $500 for each call, and even that can be tripled for willful and knowing violations. That brings us to Stoops v. Wells Fargo Bank, 197 F. Supp. 3d 782 (W.D. Pa. 2016).  Stoops had purchased at least 35 cell phones. She carried the phones about with her, waiting for them to ring with illegal calls. She had filed at least 11 TCPA cases and sent at least twenty pre-litigation demand letters. Two of plaintiff’s numbers had previously been assigned to customers of Wells who had defaulted on loans and consented to receiving Wells auto-dialed and recorded calls. After Wells made numerous such calls to the numbers, plaintiff sued Wells under the TCPA.  Plaintiff testified that she was bringing the lawsuits as a business. The court granted summary judgment for defendant on the ground that plaintiff had not suffered an actual injury and therefore lacked standing.

There is something quite distasteful about professional plaintiffs like Ms. Stoops. It's hard not to cheer at her getting her comeuppance. Stoops stooped to conquer (sorry). On the other hand, would the same conduct have been objectionable if the FCC or a state AG had engaged in it?  Law enforcement agencies routinely engage in stings. Consumers are given the right to bring claims under consumer protection statutes like the TCPA because we need more enforcement of the law than the government can supply. Such plaintiffs are even said to serve as private attorneys general. So didn't she do exactly what the law contemplates? Did she lose because of her honesty in testifying that she was suing under the TCPA as a business?  What else should we say in the casebook or the associated teacher's manual about this? Does her behavior leave a bad taste in your mouth?