Consumer Law & Policy Blog

Unsealed court filings show extent to which DoorDash worked with arbitration firm to craft terms favorable to the company

Two weeks ago, Scott wrote about the decision compelling arbitration in cases against DoorDash. His post explained that, after thousands of workers sought arbitration against DoorDash pursuant to the mandatory arbitration agreement in the company's employment contract, DoorDash refused to pay the fees and then tried to change the arbitration clause in the contract to require arbitration through a firm called CPR, with terms more favorable to the company.

In an article today in the American Prospect, reporter Susan Antilla reports that the judge in the case has now made accessible previously sealed documents filed in the case. The documents show that DoorDash and its law firm, Gibson Dunn, worked closely with CPR to craft the arbitration protocol. According to the article, DoorDash was so involved that CPR would not publish its new protocol until DoorDash and its lawyers gave the go ahead, including a sign off on the fee structure. In his written approval, DoorDash's head of litigation asked that CPR let him know when the new rules were published “so that we may link to it in our terms and conditions.” 

As the article notes, the unsealed records show "obvious conflicts of a defense team being so intimately involved in developing new rules in a purportedly neutral forum."

The article is here.

Dan Solove takes on the privacy paradox

Daniel J. Solove of George Washington has written The Myth of the Privacy Paradox. Here is the abstract:

In this article, Professor Daniel Solove deconstructs and critiques the privacy paradox and the arguments made about it. The “privacy paradox” is the phenomenon where people say that they value privacy highly, yet in their behavior relinquish their personal data for very little in exchange or fail to use measures to protect their privacy.

Commentators typically make one of two types of arguments about the privacy paradox. On one side, the “behavior valuation argument” contends behavior is the best metric to evaluate how people actually value privacy. Behavior reveals that people ascribe a low value to privacy or readily trade it away for goods or services. The argument often goes on to contend that privacy regulation should be reduced.

On the other side, the “behavior distortion argument” argues that people’s behavior isn’t an accurate metric of preferences because behavior is distorted by biases and heuristics, manipulation and skewing, and other factors.

In contrast to both of these camps, Professor Solove argues that the privacy paradox is a myth created by faulty logic. The behavior involved in privacy paradox studies involves people making decisions about risk in very specific contexts. In contrast, people’s attitudes about their privacy concerns or how much they value privacy are much more general in nature. It is a leap in logic to generalize from people’s risk decisions involving specific personal data in specific contexts to reach broader conclusions about how people value their own privacy.

The behavior in the privacy paradox studies doesn’t lead to a conclusion for less regulation. On the other hand, minimizing behavioral distortion will not cure people’s failure to protect their own privacy. It is perfectly rational for people — even without any undue influences on behavior — to fail to make good assessments of privacy risks and to fail to manage their privacy effectively. Managing one’s privacy is a vast, complex, and never-ending project that does not scale; it becomes virtually impossible to do comprehensively. Privacy regulation often seeks to give people more privacy self-management, such as the recent California Consumer Privacy Act. Professor Solove argues that giving individuals more tasks for managing their privacy will not provide effective privacy protection. Instead, regulation should employ a different strategy — focus on regulating the architecture that structures the way information is used, maintained, and transferred.

Uncovering the land-deal details that Mulvaney's lawyers are hiding

Over the past couple of years, there has been a fair amount of controversy about the role played by Trump Administration official Mick Mulvaney in a land deal gone bad and his efforts to manipulate the law to protect himself from losses while dumping the losses on his investors. The controversy came up during his confirmation hearing in 2017 and has continued as he has risen in responsibility within the Administration. One Mulvaney company foreclosed on a loan made to a different Mulvaney company, and the investor who was frozen out counterclaimed. Three deposition transcripts, including the deposition of Mulvaney himself, were presented to the South Carolina trial court in connection with summary judgment motions, but after the Mulvaney interests prevailed, all of the parties joined together in a motion to keep under seal both the summary judgment briefing and all of the evidence submitted with that briefing.

Georgetown law professor Adam Levitin, who had used the Mulvaney transaction in his classes on financial restructuring, noticed the sealing, which prevented him from writing a fully informed blog piece about the case. Moreover, Senator Jeff Merkley has been quoted as expressing concern that Mulvaney was less than fully candid in his answers to questions during the confirmation process, and the South Carolina trial court ruled that the candor of his answers would be a proper subject for questioning during Mulvaney’s deposition. Public Citizen and no doubt many others would like to explore whether his deposition answers fully addressed those concerns.

Many thanks to Jay Bender, a top South Carolina media lawyer with Baker, Ravenel and Bender, for co-counseling on these motions.

Libel tourism in Virginia again used to seek to identify anonymous Twitter users

Late last year, I wrote about an abusive subpoena that California Congressman Devin Nunes was pursuing in Virginia state court, seeking to identify the owner of a satirical Twitter account that makes fun of Nunes, referring to his family history in dairy farming, by using the Twitter handle “@Devin Cow” and including various puns referring to cow body parts, cow noises, and cowboys. We filed an amicus brief urging the state court judge to use the Dendrite standard to decide whether to compel Twitter to identify Nunes’ online detractor, and arguing that there was no basis for overcoming the Cow’s right to parody anonymously. The motion to quash that subpoena is still pending.

Nunes’ lawyer, Steven Biss, has recently tried another route to achieve the same objective.   He is representing a communications specialist based in North Carolina named Trevor Fitzgibbon, who has been engaged in a protracted dispute with a Washington, D.C. lawyer named Jesselyn Radack who is, in turn, one of several women who have accused Fitzgibbon of untoward sexual conduct. Their first round of litigation, filed in the Eastern District of Virginia even though neither side lives there, ended in a harsh settlement that included a six-figure payment by Radack to Fitzgibbon as well as a clause forbidding each to talk about the other publicly. Fitzgibbon has again sued Radack in the Eastern District of Virginia, accusing her of breaching the settlement agreement, of fraudulently inducing him to sign that agreement in the first place, and of defamation. The complaint charges Radack with conspiring with various other people to defame Fitzgibbon, but only Radack is named as a defendant. Radack has counterclaimed against Fitzgibbon, making much the same accusations of breach of contract, fraudulent inducement, and defamation.

Although Fitzgibbon and Radack are entitled to their mutual antagonism, and to slug it out in federal court if they must, it is the abuse of the subpoena power that engages our attention.   Supposedly for the purpose of pursuing his claims against Radack, Biss has served yet another subpoena on Twitter, claiming the right to be provided with identifying information about the owners of some twenty-two Twitter accounts.

Read NCLC's critique of the CFPB's proposed debt-collection rule

The National Consumer Law Center has issued this press release, entitled "CFPB Fails to Protect Consumers From Abusive Collection of Time-Barred Debts (Again)," which, among other things, castigates the CFPB for failing to flat-out "ban collection of time-barred debt in and out of court."

Consumers lost more than $200 million to romance scams in 2019

The Federal Trade Commission reports that consumers reported losing $201 million to romance scams in 2019—up nearly 40% since 2018. The total reflects complaint submitted to the FTC by more than 25,000 consumers.

Student debt relief from a civil-rights perspective

Law profs Dalie Jimenez and Jonathan Glater have written Student Debt is a Civil Rights Issue: The Case for Debt Relief and Higher Education Reform for the Harvard Civil Rights-Civil Liberties Law Review. Here is the abstract: 

For an ever-growing number of students aspiring to higher education, borrowing is essential. Yet the burdens of indebtedness dis-proportionally harm Black and Latinx students. Debt also undermines the meaning and effect of higher education access, enabling many who borrow to reach the middle class but still limiting possibilities relative to students who do not need to borrow or who borrow less — students who are more likely to enjoy relative privilege. This Article identifies ways in which student indebtedness works systematically to disadvantage those students who belong to groups historically subordinated on the basis of race, and thus provides more concrete historical and empirical grounding for reforms that would improve the accessibility of higher education. The Article develops proposals for reform, including debt forgiveness and elimination of public institution tuition, to promote greater equity in access. 

 

CFPB: Five ways to recognize a social-security scam

The Consumer Financial Protection Bureau has published Five ways to recognize a Social Security scam. Last summer, the agency warned in this short memo about the increasing number of scams aimed at getting social-security numbers or benefits. It explained how to identify scams (as opposed to legit inquiries from the Social Security Administration) and how consumers can report scams to authorities. 

Industry knows damn well that forced arbitration is unfair

Isn't that why the HR director at Wells Fargo, in explaining why his company was getting rid of forced arbitration of sexual-harassment claims, observed that "Wells Fargo has zero tolerance for sexual harassment"?

So, for really bad stuff, it's only fair to let people go to court. Is that it?

Does the company tolerate just plain-old race and sex discrimination in pay or job opportunities, without the harassment? Or other workplace illegalities? Or what about data theft? Or illegal lending practices? Does Wells Fargo "tolerate" all of that? After all, the company still tries to keep people out of court on disputes over those things.

It's great that people claiming sexual harassment against Wells Fargo will now be able to sue, and perhaps this move will spur other companies to reverse course on forced arbitration. But Wells Fargo's move, and the reasons given for it, reveal that industry knows that forced arbitration is both wrong and an assertion of brute legal force, nothing more.

 

Law-school loan debt

Law prof CJ Ryan has written Paying for Law School: Law Student Loan Indebtedness and Career Choices. Here is the abstract:

Student loan debt has reached crisis levels, topping $1.64 trillion dollars this year and surpassing credit card debt to become the second largest source of debt held by Americans. When discussing student loan debt, it is easy to fixate on the aggregate impact of the burdens this debt places on taxpayers, the economy, and borrowers alike, such as the depressive effects that student loan debt has on marriage, homeownership, and entrepreneurship. Yet, a discussion of which graduates are saddled with the largest student loans and how their debt obligations impacts their career choices is often absent from conversations about student debt and has been understudied to date. This Article contributes to the discourse about student loan debt and its potentially negative externalities by investigating responses from an original survey administered at four law schools, revealing novel findings about law students’ expected debt loads, career choices, and intentions to participate in the Public Service Loan Forgiveness program.