Data privacy suit on behalf of 6 million Georgia voters

The ABA Journal reports that “The Georgia Secretary of State’s office accidentally sent protected personal information for its states’ registered voters on computer disks to third parties last month, along with the public voter-registration records for which those organizations had paid.”

Last week, plaintiffs brought a class action suit under state identity-protection law on behalf of 6 million voters, alleging that the Secretary of State released personal identifying information to the media, political parties, and data purchasers.

Read more from the ABA, or the Atlanta Journal-Constitution.

The complaint is here.

Retroactive Change on Anonymous Comments at the Montana Standard

by Paul Alan Levy

Over at Internet Daily’s Policy Blog, Wendy Davis brings us news that the Montana Standard, the daily paper in Butte Montana, is retroactively changing its policy for the posting of online comments to stories on its web site.  The current policy, which will apparently continue in effect until January 1, allows users to register either using their Facebook accounts or, at the user’s option, registering “only with us” by providing their first and last names and an email address, as well as selecting a password and a “screenname”; according to the registration page, “This is the name that will be displayed next to your photo for comments, blog posts, and more. Choose wisely!”  As of January 1, however, comments will be posted under the users’ real first and last names.

The kicker here is that the change is retroactive.  Apparently unwilling to part with the wealth of comments that are already posted on its web site under the old policy, but also, apparently, unwilling to configure its software so that comments posted before the new policy is implemented remain under the chosen screen names, the Standard announces that past comments will suddenly appear using the users’ real names unless users contact the paper no later than December 26 to ask that their comments be removed.
                 

Public Citizen and allies urge D.C. Circuit to uphold "gainful employment" rule

In 2014, the U.S. Department of Education adopted the “gainful employment” rule to address overwhelming evidence that some postsecondary career training programs, particularly at for-profit institutions, were failing to prepare students for jobs that would enable them to repay their federal student debt, thus endangering the federal government’s investment in these schools by way of federal student aid and leaving some students worse off than they would have been had they never pursued postsecondary education. The rule imposes new accountability and disclosure requirements for certain career training programs.

Over the summer, the district court in D.C. upheld the rule against a challenge by the Association of Private Sector Colleges and Universities (APSCU), the largest trade association of for-profit colleges, and APSCU appealed. Today, Public Citizen and 27 other groups filed an amicus brief in the D.C. Circuit urging it to uphold the rule. Amici argue:

[A]s overwhelming evidence in the administrative record demonstrates, some predatory for-profit institutions have been responsible for charging high prices to provide low-quality training, with few to no job placement opportunities and abysmal graduation rates. They have targeted underserved populations of students—including veterans and students of color—with shameful, and sometimes outright fraudulent, recruitment practices that have prompted numerous state and federal agency investigations and resulted in significant enforcement actions. The for-profit education industry has saddled many students with a lifetime of debt often ending in default, with devastating consequences for those students and the federal fisc. 

You can read our whole brief here.

A Reply to Alan Kaplinsky's Comment on My Claim about the Industry's Supposed Love of Arbitration

by Jeff Sovern

In a recent American Banker essay, I argued that businesses praise arbitration not because they genuinely value it, but because it enables them to block class actions.  I said that for two reasons: first, that if businesses truly believe arbitration is superior to litigation, as they say they do, they should prefer arbitration even for resolving disputes in individual actions when class actions are not available.  Yet financial industry organizations have stated that if they cannot use arbitration to block class actions, they will not use arbitration at all in consumer disputes. Second, a study found that in business-to-business contracts, where class actions are rare and so not relevant to deciding whether to use arbitration, companies use arbitration clauses far less often than in their consumer contracts, suggesting that they don’t see value in arbitration except when class actions are a possibility.

In return, Alan Kaplinsky, a leading arbitration advocate and financial industry lawyer, responded in an American Banker piece of his own. But he never actually grapples with my claim that the actions of businesses show they prefer litigation to arbitration when class actions are off the table.  In fact, his argument proves my point.

First, Mr. Kaplinsky argued that “arbitration is superior to class action litigation for consumers and companies alike [emphasis mine].” The Consumer Financial Protection Bureau study disagreed, but I understand that Mr. Kaplinsky claims the bureau went off the track on that one.  However, my essay was based on what businesses want to do with disputes when class actions are not involved. As I noted above, they want to litigate, not arbitrate. 

Second, Mr. Kaplinsky wrote that I said “the evidence points to few individual arbitrations occurring in the first place.”  He then stated that there had been thousands of such individual actions, including the 1,750 the CFPB studied.  Well, that might have been a good argument if I had actually said that few individual arbitrations have occurred. Except that I didn’t.  It’s irrelevant.

Moving on from that straw man, Mr. Kaplinsky says that businesses incur extra expenses in defending claims in arbitration and that they would not be willing to incur those expenses if they must also pay for class actions.  In other words, Mr. Kaplinsky agrees that if arbitration clauses can’t prevent the use of class actions, business won’t want to use arbitration.   But as I said in my original piece, if businesses genuinely believe arbitration is superior to litigation, shouldn’t they choose arbitration whenever they can, whether or not it enables them to avoid class actions?

But what about the arbitration expense Mr. Kaplinsky cites?  Is that the explanation?  Ask yourself why businesses are willing to assume that expense now.  It’s not to sell their products: no business advertises that you should choose them because they pay for arbitration if you have a dispute with them.  Rather, it’s because they get some other benefit out of assuming that expense. And that benefit, of course, is blocking class actions. What else could it be?

In short, businesses prefer arbitration because, as CFPB Director Richard Cordray said, it gives them a “free pass” to avoid accountability to their customers. It enables them to block class actions.  Maybe it’s time they admitted it.

Krugman on Obamacare successes and disappointments

Overall, the program has been working well, the Nobel laureate chronicles:

-The uninsured rate has dropped sharply

-Most employers are not (as previously feared) dropping coverage for employees

-Costs are lower than expected

And Krugman puts some recent bad news (about rising premiums, for instance) into perspective. Read Krugman's op-ed here.

"Consumer Watchdog Weighs Anti-Discriminatory Lending Rules"

The Wall Street Journal reports on the Consumer Financial Protection Bureau's consideration of a rule requiring lenders to provide detailed data on loan applications, in an effort to prevent discrimination against small businesses and businesses owned by women and minorities.

"To do that, the agency would require lenders to provide detailed data on loan applications, including the gender, race and ethnicity of the applicants. The agency, created in the wake of the financial crisis, already requires such data on mortgage applications. New rules would expand its scrutiny to banks and others making commercial loans."

The full WSJ article (subscription may be required) is here.

"FCC proposes millions in fines, collects $0"

Politico reports:

The FCC has announced a series of eye-popping fines against companies over the past two years: Roughly $100 million against nearly a dozen firms for defrauding a phone subsidy program, $35 million against a Chinese company for selling illegal wireless jamming equipment, and $100 million against AT&T this June for throttling customers on unlimited data plans.

But how much of that money has the commission actually collected? $0.

While the FCC has always had a cumbersome process to impose penalties, the increasingly large fines proposed by the FCC are highlighting the gap between attention-grabbing press releases and slow-moving collection. The disconnect is drawing scrutiny in Congress as the FCC’s enforcement bureau ... is aggressively targeting companies on everything from their billing practices to data security to Wi-Fi blocking.

The full story is here.

Times: Foiling Electronic Snoops in Email

Here.  Excerpt:

*  * * Trackers, which come in many forms including a single invisible pixel inserted into an email or the hyperlinks embedded inside a message, are frequently being used to detect when someone opens a message and even where that person is when the email is opened. By some estimates, trackers are now used in as much as 60 percent of all sent emails.  

* * *

Yet, the prevalence of these trackers raises consumer questions. Because trackers are invisible, many people are unaware of them and have no inkling of how to dodge them. “It’s definitely a privacy concern,” said Cooper Quintin, a technologist and privacy advocate for the Electronic Frontier Foundation. “There’s no mechanism for people to opt out.”

Times: Bipartisan Bill Would Protect Service Members’ Right to Avoid Arbitration

Here.

S.I Strong Chapter: Incentives for Large-Scale Arbitration

S.I. Strong of Missouri has written Incentives for Large-Scale Arbitration: How Policymakers Can Influence Party Behaviour.  Here's the abstract:

At this point, the future of large-scale arbitration (i.e., class, mass and collective procedures) can best be described as mixed. On the one hand, class arbitration has been curtailed in the United States as a result of various US Supreme Court decisions upholding waivers of large-scale suits in arbitration. On the other hand, mass and multiparty arbitration in investment proceedings appears to be on the rise. Collective arbitration seems to exist somewhere between these two extremes, since there are an increasing number of collective procedures around the world (for example, various types of collective arbitration can currently be found in Spain, Germany and the United States) but parties appear to use such mechanisms relatively infrequently.

The uneven status of large-scale arbitration raises the question of why parties and states choose to use or develop class, mass or collective procedures. To answer this question, it is necessary to analyse the legal and social environments in which these procedures exist to determine whether parties have sufficient incentives to pursue large-scale arbitration and whether states can or should do more to promote these forms of dispute resolution.

This chapter attempts to address these concerns by considering the use and availability of incentives for large-scale arbitration and in particular whether and to what extent lawmakers can or should seek to influence party behaviour through default rules and other policymaking tools. In so doing, this chapter attempts to provide parties, practitioners and policymakers with a better understanding of how class, mass and collective arbitration operate within various legal and social environments and how the choice of certain legal frameworks can optimize both public and private values.