Paper on the Right to Be Forgotten in the US

Patrick O'Callaghan of University College Cork has written The Chance 'to Melt into the Shadows of Obscurity': Developing a Right to Be Forgotten in the United States, A. Cudd & M. Navin (eds) Privacy: Core Concepts and Contemporary Issues (New York: Springer, 2018) (Forthcoming). Here is the abstract:

This chapter argues that there is some (limited) evidence of a right to be forgotten in the jurisprudence of U.S. courts. For the purposes of this argument, the right exists whenever interests in being forgotten and/or forgetting are understood as weighty enough to impose a duty on government and/or fellow citizens to respect those interests. Most of the relevant cases belong to the pre-digital era but nevertheless provide some doctrinal support for a right to be forgotten in the digital era. In particular, the chapter pays close attention to the privacy challenges associated with search engines and argues that it may be possible to implement a Google Spain-inspired right to be forgotten (in the sense of delisting or deindexing search results) in the United States.

Arbel Article Proposes that Administrative Agencies Sanction Filing of Baseless Claims Filed Against Consumers

Yonathan A. Arbel of Alabama has written Adminization: Gatekeeping Consumer Contracts, Vanderbilt Law Review, Forthcoming.  Here's the abstract:

Large companies and debt collectors frequently file unmeritorious claims against consumers. Recent high-profile actions brought by the Consumer Financial Protection Bureau (CFPB) against JP Morgan, Citibank, and large debt collectors illustrate the breadth and importance of this phenomenon. Due to the limited financial power of individuals, consumers often do not defend against such baseless claims, which results in the entry of millions of default judgments every year. To combat this problem, policymakers and scholars have explored a variety of solutions that would make it easier for consumers to defend in court, but these prove ineffectual.

To solve the problem of unmeritorious claiming, this Article proposes a budget-neutral solution called “Adminization.” This novel approach uses an administrative agency, potentially the CFPB, as a gatekeeper to civil litigation which detects and sanctions the filing of baseless claims. The main task of the agency is to select a sample of cases, audit them, and—where needed—issue fines. To effectively focus the agency’s attention, the sampling of cases for audit could rely on machine-learning algorithms—the same ones used by credit card companies to monitor fraud today. The audit will use agency investigators to gather and corroborate information relevant to the debt claim, and where wrongdoing is found, the agency will use its powers to levy fines against abusive plaintiffs. Unlike the current system, Adminization will subject every plaintiff to the risk of thorough investigation and large fines, thus undercutting the financial incentive to engage in wrongful behavior. The importance of Adminization lies in its cost-effectiveness, practicality, and political feasibility relative to “participation-based” approaches that dominate the discussion today.

Can law bloggers be subjected to Bar discipline for misstating facts or law?

by Paul Alan Levy

On Friday morning, a panel at the annual meeting in New York of the Association of Professional Responsibility Lawyers will be discussing an issue dear to the heart of blawgers who discuss subjects that make powerful figures in their own areas uncomfortable – to what extent should lawyers be subject to professional  discipline for speech that they make not in their representational capacity, and to what extent does the First Amendment bear on that question?

David Dayen on Foreclosure Victims and Playing Politics

by Jeff Sovern

The title of the piece, in The New Republic, is The Left’s Misguided Debate Over Kamala Harris. Perhaps non-Californians will be less interested in the parts about Kamala Harris and more interested in the parts about foreclosure victims (recall that Dayen wrote the excellent book Chain of Title about the foreclosure crisis). Here is an excerpt:

[I]f you were to rank the performance of law enforcement officials during this period, everyone would be tied for last. They all deserve criticism for their inability to hold the perpetrators of the biggest incidence of consumer fraud in American history to account. They all displayed shocking cowardice and let down millions of vulnerable people, when they had reams of documentary evidence revealing the crime, enough to extract much more justice and far better outcomes for the victimized. They all ushered in the two-tiered system of justice that sapped people’s faith in democracy * * *

* * *

Homeowner victims have spent the past decade largely invisible from public debate. The only time their plight gets highlighted is when somebody has an axe to grind against a particular public official. Only then do homeowners get trotted out for sympathy, as if the country didn’t ignore them for years. This is the problem with a politics of personality, which is consumed more with doling out praise and blame for high-profile politicians than demanding justice for broad social problems. It’s time the left put the issues back at the center of public debate.

Fed Study of Fintech Lending and Consumers

Julapa Jagtiani and Catharine Lemieux of the Fed have written Fintech Lending: Financial Inclusion, Risk Pricing, and Alternative Information. Here's the abstract:

Fintech has been playing an increasing role in shaping financial and banking landscapes. Banks have been concerned about the uneven playing field because fintech lenders are not subject to the same rigorous oversight. There have also been concerns about the use of alternative data sources by fintech lenders and the impact on financial inclusion. In this paper, we explore the advantages/disadvantages of loans made by a large fintech lender and similar loans that were originated through traditional banking channels. Specifically, we use account-level data from the Lending Club and Y-14M bank stress test data. We find that Lending Club’s consumer lending activities have penetrated areas that could benefit from additional credit supply, such as areas that lose bank branches and those in highly concentrated banking markets. We also find a high correlation with interest rate spreads, Lending Club rating grades, and loan performance. However, the rating grades have a decreasing correlation with FICO scores and debt-to income ratios, indicating that alternative data is being used and performing well so far. Lending Club borrowers are, on average, more risky than traditional borrowers given the same FICO scores. The use of alternative information sources has allowed some borrowers who would be classified as subprime by traditional criteria to be slotted into “better” loan grades and therefore get lower priced credit. Also, for the same risk of default, consumers pay smaller spreads on loans from the Lending Club than from traditional lending channels.

(HT: Matt Bruckner, Consumer Finance Monitor)

"The FTC and FBI are shining the spotlight on your kid's smart toys"

From an op-ed by Janis Kestenbaum, formerly of the Federal Trade Commission, in The Hill today:

While children may be fans of talking dinosaurs, robots and stuffed animals, the federal government appears to have its concerns. At least that is the suggestion from a warning to parents from the Federal Bureau of Investigation that came on the heels of a Federal Trade Commission announcement that connected toys must comply with the Children’s Online Privacy Protection Act (COPPA).

In June, the FTC announced that it had updated its COPPA compliance plan for businesses to make inescapably clear that internet-enabled toys and other “internet of things” (IoT) devices that collect personal information from children may be subject to COPPA. Shortly thereafter, the FBI issued a public service announcement warning parents that connected toys “could put the privacy and safety of children at risk due to the large amount of personal information that may be unwittingly disclosed.”

The full piece is here.

Who Regulates Arbitration?

That's the name of this article by law prof David Noll. Here is the abstract:

One of the most important battles currently being fought in the United States' "arbitration wars" involves regulation by federal administrative agencies. Since 2014, the Consumer Financial Protection Bureau, National Labor Relations Board, Center for Medicare and Medicaid Services, and Departments of Defense, Labor, and Education have all regulated mandatory arbitration or barred its use in particular domains. Legal challenges to these agency actions provoked a series of clashes over agencies' authority to regulate arbitration that have divided lower courts, with some courts holding that a grant of substantive regulatory authority includes the authority to regulate arbitration and others courts expressly disagreeing. At the core of these disputes is the Federal Arbitration Act's relationship to substantive regulatory statutes: Does the FAA bar agencies from regulating arbitration under a substantive regulatory statute or can the FAA be reconciled with substantive statutes in a way that preserves agencies' authority to regulate? 

Is there a future for mass-tort class actions?

That's a key issue addressed by law prof Alexandra Lahav in Mass Tort Class Actions - Past, Present, and Future. Here is the abstract:

The judicial experiment with mass tort class actions was an anemic one, albeit somewhat spectacular in a few cases that have captured the academic and professional imagination. This Essay explains that the reason mass tort class actions never thrived is that there is a disconnect between tort doctrine on the one hand, and tort theories and procedures on the other. Tort doctrine has largely failed to accommodate social scientific developments in fields such as epidemiology. Tort theories such as risk-spreading and deterrence, as well as the procedural law, especially common-law like informal procedural ordering, have filled the breach. The future of the mass tort class action depends on tort doctrine’s ability to take risk, probability, [and] the possibilities of statistical proof into account.

Report: Debt collectors flex muscle in people's court, system not much help to people who owe

by Jeff Sovern

Here, in The News-Press. Debt buyers use small claims courts to get judgments to enforce debts even though it is not clear how often those debt buyers can prove the facts pertaining to the debt. Excerpt:

Of more than 1,800 small claims cases filed in Lee County over the first five months of 2017, more than 45 percent involved collection of consumer debt by companies that bought the debt from original lenders, or in some cases, from another debt buyer.

 

* * *

Nearly all of those who do show up in court appear without an attorney and end up in mediation, lacking knowledge of the system to mount a defense, and lacking the ability to force the debt buyer to show, by the civil trial standard of a preponderance of the evidence, that the debt is real and the amount is correct.

* * *

Trials are presented to defendants as an unappealing alternative to coming to a settlement. In urging settlement, judges tell the litigation-averse debtors to expect to be treated the same as lawyers in the courtroom, with no help from the judge on points of law or on proper procedure. The message is clear that the mediation session is a chance to discuss how the debt will be paid off, rather than an opportunity to demand proof of the amount of the debt.

* * *

In 76 cases involving the four most active debt buying companies in Lee County small claims court during May, settlements were reached in 29 of the cases. All but two of the settlements were for the full amount claimed by the debt buyers and the two that settled were by agreements filed in advance of the pretrial conference.

By contrast, in only seven  of the 76 cases reviewed did a debtor opt for a trial at which the amount of the debt would need to be proved. In 27 cases, the debtor did not show up and was found in default without a payment plan.

 

Back-breaking student-loan collection courtesy of the Commonwealth of Virginia

According to the Department of Education, there's about $1.4 trillion in outstanding U.S. student loan debt, $137 billion of which is in default (with 1.1 million students going into default in 2016 alone). No long-term solutions are on the horizon. Meanwhile, as Danielle Douglas-Gabrielle explains in this article,"thousands of Virginia students [are] caught in a state-sanctioned debt trap. These students lack the money to pay their bills on time, and are penalized in a way that makes it harder to meet the obligation." The article goes on:

A little-known Virginia statute requires public colleges and universities to shuttle student accounts of less than $3,000 that are 60 days past due to private debt collectors. Those companies can charge up to 30 percent of the outstanding balance as a fee. That fee is far more than the interest on most credit cards, or on any car loan or mortgage, and it can add hundreds of dollars to student debt. Past-due accounts of more than $3,000 are referred to the state attorney general’s office to enforce collection. That also results in a 30 percent fee.