Paul Bland in Daily Kos: Banning Class Actions Will Not Put “America First”

Here.  Excerpt:

Drywall from China was . . . highly toxic.

* * *

Approximately 60,000 homes built with drywall from China were affected, according to one source. In fact, the problems caused by this imported drywall are so massive and widespread that individual lawsuits could not have even begun to make a dent in the problem.  

Fortunately, many homeowners were able to seek a solution via class action suits that provided much needed financial compensation as well as helping to fix the underlying problem.

* * *

[P]roperty owners were essentially compensated for 100% of their losses

* * *

Under a new bill from GOP Congressman Bob Goodlatte now making its way through Congress, however, remedies like this would be made virtually impossible. The so-called “Fairness in Class Action Litigation Act” (a misnomer if ever there was one) would wipe away Americans’ ability to take on companies whose defective products put their health and safety at risk.

From dangerous drywall from China, to defective and harmful precription drugs – and nearly everything in-between – this sweeping legislation would essentially inoculate foreign companies flooding the American market with dangerous products from ever having to answer for their behavior in court. American consumers would be blocked from the courts in favor of boosting corporations’ bottom line.

 

Department of Education delays enforcement of rule on for-profit colleges

The Department of Education announced on  Monday that it will delay implementing new rules designed to punish career-training schools that leave students with high levels of debt but weak job prospects. The Wall Street Journal (subscription required) explains:

The move delays new rules known as “gainful employment” that formed a key piece of former President Barack Obama’s higher-education agenda. It could ultimately help for-profit colleges avoid sanctions if they prove the government data underpinning the rules is flawed.

The Education Department said Monday it will give schools until July 1 to file appeals, pushing back an original deadline of Friday. “This action is taken to allow the Department to further review the GE regulations and their implementation,” the agency said.

The rules are designed to cut off access to federal money for career-training programs if multiple classes of their graduates spend at least 20% of their discretionary income, as defined by a formula, or 8% of their total earnings each year, paying off student debt.

 

The Department's announcement is here.

Chris Peterson's Important Defense of the CFPB

It's titled Will Congress Remove Consumer Credit “Seat Belts”? and is in Democracy. The whole piece is worth reading if you care about the CFPB, but here's an excerpt to whet your appetite:

[I]f the CFPB really were a “runaway agency,” we should expect to see banks running from it. In every law enforcement case, the defendant is entitled to due process of law. Banks get to have to their day in court. So, how often have banks raced to the judicial branch to protect them from this Frankenstein monster? Dozens of times? A handful of cases? The answer is not even once. In order to be subject to CFPB enforcement, by statute, banks must have over $50 billion in capital. Although this kind of money buys access to the finest lawyers, in every CFPB enforcement case, banks signed a settlement agreement. This is not to say banks were always happy with the outcome. But neither are people that get speeding tickets. When money is on the line, the facts show that our most sophisticated and well-capitalized financial institutions did not want a judge or a jury—or the media attention that go along with them—to look at their case.

The truth is that the CFPB has faced criticism not because it is out of control, but because it is effective. If the CFPB were bringing crazy cases, hundreds of federal judges appointed by Republican and Democratic presidents would simply dismiss the agency’s complaints. And some of those judges would enjoy doing so. Too many of America’s financiers are betting it will be easier to strangle the watchdog than actually follow the rules or pay up when they make a mistake. And worse, too many politicians, pundits, and astroturf-think-tanks-for-the-wealthy want to score political points by taking down what may be the best recent example of a government actually doing really great work for the public. If cooler heads prevail, then we can hope in the coming years the CFPB’s no-nonsense approach to consumer protection will be as universally accepted as seat belts are today.

 

Democrats to Introduce Bills Today to Block Arbitration Clauses

From the press release:

On Tuesday, March 7, Senator Al Franken (D-Minn.) and top Senate and House Democrats will hold a press conference to push legislation to stop the use of unfair forced arbitration clauses, which are widely used by corporations to limit consumers’ and employees’ access to justice.

 The lawmakers will be joined by individuals who have been personally harmed by forced arbitration, including former Fox News anchor Gretchen Carlson.

 From nursing home contracts and employment agreements to credit card and cell phone contracts, Corporate America uses forced arbitration clauses to restrict Americans’ access to justice by stripping consumers and workers of their right to go to court. Instead, consumers and workers are forced into an arbitration system where corporations can write the rules; everything can be done in secret, without public rulings; discovery can be limited, making it hard for consumers to get the evidence they need to prove their case; and there’s no meaningful judicial review, so consumers and employees are often unable to appeal a decision even if the arbitrator gets it wrong. 

Senate and House Democrats will reintroduce and discuss legislation aimed at limiting forced arbitration in a wide variety contexts. And as the Senate Judiciary Committee prepares for its hearing on the nomination of Neil Gorsuch to the Supreme Court, Democrats will highlight the effects of mandatory arbitration on ordinary Americans’ access to the courts to hold powerful corporations accountable.  

FOR PLANNING PURPOSES ONLY:

 

WHO:            Senator Al Franken (D-Minn.)

                        Senator Patrick Leahy (D-Vt.)

                        Senator Dick Durbin (D-Ill.)

                        Senator Sheldon Whitehouse (D-R.I.)

                        Senator Richard Blumenthal (D-Conn.)

Congressman Hank Johnson (D-Ga.)

                        Congressman David Cicilline (D-R.I.)

Congressman Brad Sherman (D-Calif.)

Gretchen Carlson is a former Fox News anchor, whose Fox News employment contract would have barred her from speaking publicly about her allegations of sexual harassment against former Fox News chairman Roger Ailes.

Aaron Brodie is a victim of Wells Fargo’s illegal practice of establishing accounts without permission. Aaron is now suing Wells Fargo, and Wells Fargo is attempting to force him to submit to arbitration instead of being able to hold the bank accountable in court.

Kevin Ziober is a Navy reservist who was fired by his former employer in 2012 after he informed them that he would be deployed to Afghanistan. He filed suit when he returned under a federal law which forbids retaliation against deployed military service members, but his company forced his dispute into private arbitration. 

DC Circuit denies injunction pending appeal in Company Doe v CFPB

In January, a company calling itself "Company Doe" filed suit against the CFPB to challenge its constitutionality. The theory of the complaint was that, in light of the DC Circuit's (now vacated) decision in PHH v. CFPB finding the structure of the CFPB unconstitutional, the agency should be enjoined from taking any action against Company Doe. The plaintiff sought a preliminary injunction, which the district court denied. Company Doe a filed a motion asking the DC Circuit for an injunction pending appeal.

In a 2-1 decision, the court denied the motion. The majority found that the Company failed to show either irreparable harm or a likelihood of success on the merits of its case. Judge Kavanaugh dissented, stating that he would have granted the motion.

The opinion and dissent are here.

Meanwhile, in the en banc proceedings in PHH v. CFPB, the petitioner's brief and amicus briefs in support of the petitioner are due this Friday. The CFPB's brief and amicus briefs in support of it are due on March 31.

A class member is seeking to opt out of the proposed Trump University class-action settlement

This article by Steve Eder explains the situation. A notice sent out at the class-certification stage in 2015 gave class members the right to opt out -- as is required in all Rule 23(b)(3) class actions (such as the Trump University class action).

But now a class member named Sherri Simpson is seeking to opt out at the settlement stage. Simpson is apparently asking the judge, Gonazalo Curiel, to invoke Federal Rule of Civil Procedure 23(e)(4), which provides:

The following procedures apply to a proposed settlement, voluntary dismissal, or compromise: . . . If the class action was previously certified under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so. (emphasis added)

Stay tuned.

House Passes Bill to Require OMB to Review Some CFPB Regs Before Issuance

by Jeff Sovern

As an independent agency, the CFPB can issue regulations without approval from the Office of Management and Budget.  But the House has now passed a bill that would require OMB to review major regulations promulgated by independent agencies, including the CFPB and the FTC (though the FTC seldom produces regulations, a topic for another day).  The bill is presumably subject to the filibuster in the Senate, unless the Senate changes those rules.  The bill and a summary can be found here.  This looks like an attempt to prevent or delay issuance of significant regulations from a body that opposes regulations. 

How Uber avoids regulators

The New York Times, in a story called "How Uber Deceives the Authorities Worldwide," reported on Friday:

Uber has for years engaged in a worldwide program to deceive the authorities in markets where its low-cost ride-hailing service was resisted by law enforcement or, in some instances, had been banned.

The program, involving a tool called Greyball, uses data collected from the Uber app and other techniques to identify and circumvent officials who were trying to clamp down on the ride-hailing service. Uber used these methods to evade the authorities in cities like Boston, Paris and Las Vegas, and in countries like Australia, China and South Korea.

The Washington Post has a follow-up story today.

In a different Uber-related story about evading regulators, the New York Times reported last week that "Uber, in defiance of California state regulators, went ahead with a self-driving car experiment on the streets of San Francisco," with some problematic results.

Edith Roberts at SCOTUS Blog on Judge Gorsuch's Arbitration Jurisprudence

Here.  (HT: Gregory Gauthier)

Eric Goldman Article on the Consumer Review Fairness Act

Eric Goldman of Santa Clara has written Understanding the Consumer Review Fairness Act of 2016, Michigan Telecommunications and Technology Law Review, Forthcoming. Here's the abstract

Consumer reviews are vitally important to our modern economy. Markets become stronger and more efficient when consumers share their marketplace experiences and guide other consumers toward the best vendors and away from poor ones.

Businesses recognize the importance of consumer reviews, and many businesses take numerous steps to manage how consumer reviews affect their public image. Unfortunately, in a misguided effort to control consumer reviews, some businesses have deployed contract provisions that ban or inhibit their consumers from reviewing them. I call those provisions “anti-review clauses.”

Anti-review clauses distort the marketplace benefits society gets from consumer reviews by suppressing peer feedback from prospective consumers, which in turn helps poor vendors stay in business and diminishes the returns that good vendors get from investments in quality (thus degrading their willingness to make those investments).

Recognizing the threats posed by anti-review clauses, Congress banned them in the Consumer Review Fairness Act of 2016 (the CRFA). As the House Report explains, the law seeks “to preserve the credibility and value of online consumer reviews by prohibiting non-disparagement clauses restricting negative, yet truthful, reviews of products and services by consumers.” By doing so, the CRFA helps advance the effective functioning of marketplaces.

This essay helps readers understand the CRFA. Part I provides some background about anti-review clauses. Part II describes the new law and how it relates to existing law. Part III considers if the law goes far enough to protect consumer reviews. The article then has a short conclusion.