Smoking bans and housing

Following up on Brian's post yesterday about employment discimination against smokers, consider California's proposed ban on smoking in apartment buildings and other attached dwellings, discussed here by the Huffington Post (with a headline framing the ban critically) and here by the San Francisco Chronicle (with a more positive take). Public health measure? Unfair punishment for addicts? Either way you come down, issues of class and poverty loom large. Is a ban fair to non-wealthy smokers who cannot afford detached housing? Is the status quo fair to non-wealthy non-smokers, who are now subject to whatever smoke their neighbors want to blow, and may not be able to afford to move to a healthier living arrangement?

Fourth Edition of Our Casebook To Be Released In July

by Jeff Sovern

This is completely self-serving, but law professor readers of this blog may be interested to learn that the fourth edition of our casebook, Consumer Law, Cases and Materials, Fourth Edition is expected to be released in July, in time for fall classes.  Our goal was to continue comprehensive coverage of core consumer law subjects (like deceptive advertising, Truth in Lending, bait and switch, credit reporting and discrimination, credit card laws, lemon laws and other warranty rules, debt collection, and enforcement) while also updating the book to reflect new developments in the dynamic field of consumer law, including:  

• Internet marketing and social networks, such as Facebook

• The consumer protection issues that contributed to the subprime mortgage foreclosure crisis, as well as the legal fallout from that crisis, including the new Consumer Financial Protection Bureau  

• The Credit CARD Act of 2009 

• Online marketing and tracking as well as other privacy issues 

• Emerging payment systems – e.g., credit, debit and stored value cards  

• The latest U.S. Supreme Court developments on consumer arbitration  

• Predatory lending 

• Ad substantiation, celebrity and other testimonials 

• The debt buying industry and debt collection practices employed in that industry.

We added a new co-author, Chris Peterson of Utah and currently at the Consumer Financial Protection Bureau, to our lineup of Andy Spanogle of GW, Ralph Rohner of Catholic, and Dee Pridgen of Wyoming. Chris is known for scholarship on predatory lending, among other things, and he revitalized the predatory lending chapter, and made other significant contributions.  As in past editions, this text contains a balance of cases, problems that reflect modern situations, and notes with discussion questions and references to the latest consumer protection scholarship, including behavioral economic research that sheds light on how consumers actually behave. We wil also produce an updated teacher's manual and a new edition of Selected Consumer Statutes. I am quite excited about this new volume and I am confident that when people see it, they will share that excitement. 

Is employment discrimination against smokers ethical (and should it be legal)?

by Brian Wolfman

At this blog, we have covered issues of employment discrimination. Our posts have mainly concerned employment discrimination on the basis of someone's characteristic or status. But employers sometimes discriminate against prospective or current employees based on behavior, such as whether the prospective or current employee is a tobacco user. Apparently, an increasing number of employers are discriminating against smokers to lower their costs, among other reasons. Is that type of discrimination ethical? Should it be legal?

Those issues are the topic of a debate just published in the New England Journal of Medicine. One  article, entitled "The Ethics of Not Hiring Smokers," by Harald Schmidt, Kristin Voigt, and Ezekiel J. Emanuel, maintains that employer smoker bans are unethical. Here's the opening:

Finding employment is becoming increasingly difficult for smokers. Twenty-nine U.S. states have passed legislation prohibiting employers from refusing to hire job candidates because they smoke, but 21 states have no such restrictions. Many health care organizations, such as the Cleveland Clinic and Baylor Health Care System, and some large non–health care employers, including Scotts Miracle-Gro, Union Pacific Railroad, and Alaska Airlines, now have a policy of not hiring smokers — a practice opposed by 65% of Americans, according to a 2012 poll by Harris International. We agree with those polled, believing that categorically refusing to hire smokers is unethical: it results in a failure to care for people, places an additional burden on already-disadvantaged populations, and preempts interventions that more effectively promote smoking cessation.

The second article, entitled "Conflicts and Compromises in Not Hiring Smokers," by David A. Asch, Ralph W. Muller, and Kevin G. Volpp, takes a different approach. Here are some excerpts:

Tobacco use is responsible for approximately 440,000 deaths in the United States each year — about one death out of every five. This number is more than the annual number of deaths caused by HIV infection, illegal drug use, alcohol use, motor vehicle injuries, suicides, and murders combined1 and more than the number of American servicemen who died during World War II. A small but increasing number of employers — including health care systems such as the Cleveland Clinic, Geisinger, Baylor, and the University of Pennsylvania Health System — have established policies of no longer hiring tobacco users. ... These policies engender controversy, and we recognize that they risk creating or perpetuating injustices. One set of concerns arises from the fact that tobacco use is more concentrated in groups with lower socioeconomic status. ... However, these policies may also save lives, directly and through their potential effects on social norms, and these same disadvantaged populations are at greatest risk for smoking-related harms and ensuing disparities in health. ... These policies also increased the stigma against smoking, so although there's debate over whether stigma can be used as a tool for good, ultimately these policies almost certainly contributed to the decrease in the prevalence of smoking, not just the limits on where it occurs. For example, the Cleveland Clinic moved to a smoke-free campus in 2005 and stopped hiring smokers in 2007. Reportedly, smoking rates decreased in Cuyahoga County (where the Cleveland Clinic is located) from 20.7% in 2005 to 15% in 2009, whereas the overall rate in the state decreased only from 22.4% to 20.3%. ... Do hospitals' anti-tobacco hiring policies denormalize smoking and help communities escape tobacco's burden? Critics may argue that these claims are disingenuous, akin to a human resource director's saying to tobacco-using applicants, “Believe me, it's for your own good that I'm not hiring you.” But in the long run, such policies may indeed be for their own good. We recognize that these hiring practices are controversial, reflecting a mix of intentions and offering a set of outcomes that may blend the bad with the good. We know that many companies will want merely to continue their current level of anti-tobacco efforts, but given the threats that tobacco presents to our communities and institutions, we believe it's time to climb another rung on the ladder.

Interest rates for new student loans to double if Congress doesn't act

It's not Groundhog Day, but, yes, you've heard this story before. During the presidential election campaign, student loan interest rates were going to double unless Congress acted to keep them low (3.4%), and Congress acted. And, now if Congress doesn't act by July 1, rates will double. Read about it here, or check out this excerpt:

The rate for subsidized Stafford loans is set to increase from 3.4 percent to 6.8 percent on July 1, just as millions of new college students start signing up for fall courses. The difference between the two rates adds up to $6 billion. ... “What is definitely clear, this time around, there doesn’t seem to be as much outcry,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We’re advising our members to tell students that the interest rates are going to double on new student loans, to 6.8 percent.” The new rates apply only to those who take new subsidized loans. Students with outstanding subsidized loans are not expected to see their loan rates increase unless they take out a new subsidized Stafford loan. Students’ nonsubsidized loans are not expected to change, nor are loans from commercial lenders. But it translates to real money for incoming college freshmen who could end up paying back $5,000 more for the same maxed-out student loans their older siblings have.

Supreme Court sends Whirlpool class action back to the 6th Circuit for reconsideration in light of Comcast ruling

A few days ago, we posted about the cert petition pending in the Supreme Court in Whirlpool Corp. v. Glazer. In that case, the plaintiffs allege that their Whirlpool washing machines have a design defect that makes them prone to mold and noxious odors. The Sixth Circuit decision had affirmed class certification. Whirlpool's cert petition posed the following question (among others):

Whether a class may be certified under [Federal] Rule [of Civil Procedure] 23(b)(3) even though most class members have not been harmed and could not sue on their own behalf.

Whirlpool maintains that unless the absent class members prove, at the class-certification stage, that they have suffered the alleged harm, they do not have standing to pursue the class action in a federal court. If that view were accepted, plaintiffs would have a harder time litigating consumer class actions.

The Supreme Court did not deny cert this morning. Rather, it granted the petition, vacated the 6th circuit's ruling, and remanded in light of the Court's recent decision in Comcast Corp. v. Behrend. Comcast reversed a class certification in an antitrust class action on the ground that the plaintiffs' theory of damages liability could not be measured across the entire class and, therefore, did not meet Rule 23(b)(3)'s requirement that common questions "predominate" over individual questions.

Defendants are trying to defang the class action by forcing plaintiffs to prove as much of their cases as possible at the class-certification stage. Keep you eyes on the Whirlpool case with that in mind.

U.S. PIRG's Ed Mierzwinski: "Time to Break Up the Big Banks?"

Remember when Attorney General Eric Holder testified recently that the big banks are too big to prosecute? (Go here as well.) U.S. PIRG's Ed Meirzwinski poses a possible solution: If some of the banks are too big to be held accountable under law, maybe the law needs to break them up.

Disability benefits in the U.S.

For the radio program "This American Life," Chana Joffe-Walt has written "Unfit for Work: The startling rise of disability in America."

Here are a few stats cited in Joffe-Wait's essay: (1) In West Virginia, 9% of all working-age people (people between 18 and 64) receive federal disability benefits. (2) In some U.S. counties, that figure is 25%; (3) In 1961, the leading cause of disability among people receiving federal disability benefits was heart disease and stroke, at nearly 26%; mental illness and development disabilities accounted for less than 10%. (4) Today, the leading causes are back pain and other musculoskeletal problems, at just under 34%, and mental illness and developmental disabilities, at 19.2%. (5) 14 million Americans receive federal disability benefits. (6) Despite passage of the Americans with Disabilities Act (which is aimed at bringing disabled people into the workforce) and improvements in medical care (which sometimes make people more functional), the number of people found disabled by the federal government is expanding (doubling in just the last 15 years).

Here is the beginning of Joffe-Walt's report:

In the past three decades, the number of Americans who are on disability has skyrocketed. The rise has come even as medical advances have allowed many more people to remain on the job, and new laws have banned workplace discrimination against the disabled. Every month, 14 million people now get a disability check from the government. The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined. Yet people relying on disability payments are often overlooked in discussions of the social safety net. The vast majority of people on federal disability do not work. Yet because they are not technically part of the labor force, they are not counted among the unemployed. In other words, people on disability don't show up in any of the places we usually look to see how the economy is doing. But the story of these programs -- who goes on them, and why, and what happens after that -- is, to a large extent, the story of the U.S. economy. It's the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net. For the past six months, I've been reporting on the growth of federal disability programs. I've been trying to understand what disability means for American workers, and, more broadly, what it means for poor people in America nearly 20 years after we ended welfare as we knew it. Here's what I found.

To listen to the entire story, go here.

UPDATE: Media Matters has published this item that says that the "This American Life" piece is riddled with errors.

Another Prediction that Regulation Will Hurt Consumers Proves Wrong

So says Time in Why Banks Love Debit Cards Again.  The report begins as follows:

Debit cards were supposed to be toast. The industry started writing their
obituary when financial reform targeted overdraft fees and interchange or
“swipe” fees, which had made debit cards extremely lucrative for banks. So why
is it that banks are now pushing debit cards like never before?

A couple years ago, the banking industry warned federal regulators that
reform efforts could lead to both an increase in fees and a decrease in debit
card usage. “Banks and credit unions could charge for various debit card‐related
products and services that are now offered free of charge, such as free debit
cards and free debit card transactions,” a consortium of financial industry
executives wrote in a 2011 letter to the Federal Reserve arguing against reform. “Issuers
could also be forced to discourage the use of debit cards for certain
transactions … there could also be a reduction or termination of various
products and services associated with debit card programs.”

As it turned out, none of that really happened. After an initial
retrenchment, banks now are marketing debit cards as aggressively as ever.
They’re even adding back debit card rewards programs, which many had
discontinued in anticipation of the hit the regulations would deliver to their
bottom lines.

"Weathering Wal-Mart"

That's the name of this article by Joseph Seiner. Seiner sets out what he says are the best ways for discrimination victims to vindicate their rights in the wake of the Supreme Court's class-action decision in Wal-Mart v. Dukes. (The problems for plaintiffs created by Wal-Mart arguably have been exacerbated by the Supreme Court's decision earlier this week in Comcast Corp. v. Behrens. Go here and here.)

Here's Seiner's abstract:

In Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2531 (2011), the Supreme Court held that a proposed class of over a million women that had alleged pay and promotion discrimination against the nation’s largest retailer could not be certified. According to the Court, the plaintiffs had failed to establish a common thread in the case sufficient to tie their claims together. The academic response to Wal-Mart was immediate and harsh: the decision will serve as the death knell for mass employment litigation, undermining the workplace protections provided by Title VII of the Civil Rights Act of 1964 (Title VII). This Article embraces the view offered by scholars to date, and does not engage the debate over the extent to which Wal-Mart will eviscerate the employment rights of workers.

Instead, this Article attempts — for the first time — to find a solution to the problem created by Wal-Mart. The academic literature has yet to explore possible ways to minimize the impact of the Court’s decision, and this Article seeks to fill that void in the scholarship. Though the case undoubtedly weakens the ability of Title VII plaintiffs to pursue class-action claims, the decision still leaves substantial room for creative approaches to systemic discrimination. This paper offers three such solutions to the problem created by Wal-Mart: the governmental approach, the procedural response, and revised relief. This Article critiques each approach, and explains how they are useful in pursuing workplace cases that involve company-wide discrimination. This paper also situates these proposals in the context of the existing literature.

The thesis of this Article is simple. Taking at face value the argument of scholars that Wal-Mart has created a gaping hole for victims of systemic discrimination, this paper asks what tools are still available for plaintiffs to help fill that hole. Wal-Mart signals a sea change for mass-employment litigation. The challenge now will be to find imaginative ways of pursuing systemic discrimination claims. For the first time in the academic literature, this Article takes on that challenge.

"Assessing the Optimism of Payday Loan Borrowers"

That's the title of this article by Ronald Mann. Here's the abstract:

This essay compares the results from a survey administered to payday loan borrowers at the time of their loans to subsequent borrowing and repayment behavior. It thus presents the first direct evidence of the accuracy of payday loan borrowers’ understanding of how the product will be used. The data show, among other things, that about 60% of borrowers accurately predict how long it will take them finally to repay their payday loans. The evidence directly contradicts the oft-stated view that substantially all extended use of payday loans is the product of lender misrepresentation or borrower self-deception about how the product will be used. It thus has direct implications for the proper scope of effective regulation of the product, a topic of active concern for state and federal regulators.