Posted by Scott Michelman on Tuesday, January 15, 2013 at 01:05 PM | Permalink | Comments (2) | TrackBack (0)
Should public companies be forced to disclose to their shareholders -- and thus to the world -- their campaign contributions (rather than funnelling them secretively through third parties, such as the Chamber of Commerce)? The SEC is considering a disclosure rule, but the Chamber of Commerce is opposed, as explained in this article by Sue Reisinger. Here are some excerpts:
The fight over whether public companies should be forced to reveal their political contributions made through third parties continues to roil on several fronts, with a coalition of 30 business associations opposing the idea of the Securities and Exchange Commission considering a new disclosure rule. ... Speaking for the [Chamber], attorney Andrew Pincus told CorpCounsel.com, “There is no policy justification for this [proposed rule]. The theory of proponents is that the management and board can’t be trusted to ensure that the company’s political expenditures are consistent with the corporation’s interests. There is absolutely no basis, no evidence, for that theory.” Pincus ...said such disclosure could actually hurt the value of a company because certain shareholders who don’t like the policies being supported could use the disclosure to “beat up on the company,” and thereby “damaging the brand and trying to stop the company from doing things that are in the long-term best interests of the company.” ... [Columbia law professor Robert] Jackson noted that opponents say disclosure is bad while contributions are in the best interests of the corporation. “If that’s true, then why wouldn’t you tell shareholders about [these contributions]?” Jackson asked. “It’s a puzzle.”
Posted by Brian Wolfman on Tuesday, January 15, 2013 at 09:32 AM | Permalink | Comments (1) | TrackBack (0)
The Alabama Supreme Court ruled on Friday in Wyeth v. Weeks that a patient who took a generic version of a drug may sue a brand-name drug manufacturer for failing to warn about a drug’s risks. In June 2011, the U.S. Supreme Court held in Pliva v. Mensing that injured patients' state-law failure-to-warn claims against generic-drug manufacturers are preempted by federal law because the Food and Drug Administration requires those manufacturers to use labeling that is the same as the brand-name labeling. Therefore, a suit against the brand-name company may be a patient's only avenue to seek compensation for injuries. Although most courts have held that a patient who took the generic drug cannot sue the brand-name company because that company owes no duty to an individual who was not its customer, the issue is a state-law question, and the answer may vary from state to state.
On a related issue, the opening brief in the U.S. Supreme Court is due this week in Mutual Pharmacuetical Co. v. Bartlett. The Court will consider in that case whether a design-defect claim brought under New Hampshire law against a generic-drug manufacturer is impliedly preempted by federal law.
Posted by Allison Zieve on Monday, January 14, 2013 at 11:29 AM | Permalink | Comments (1) | TrackBack (0)
You can get notices via email of government recalls of various products. You don't have to get notices for everything regulated by the relevant agency. For instance, you can get recall notices that concern only the make and model of the car that you own.
To sign up for emails from the Consumer Product Safety Commission (various consumer products), go here.
For the National Highway Traffic Safety Administration (vehicles and associated products), go here.
For products regulated by the Food and Drug Administration (foods, drugs, medical devices, diagnostic tests, etc.), go here.
Posted by Brian Wolfman on Monday, January 14, 2013 at 02:00 AM | Permalink | Comments (0) | TrackBack (0)
Posted by Brian Wolfman on Monday, January 14, 2013 at 12:24 AM | Permalink | Comments (1) | TrackBack (0)
Posted by Brian Wolfman on Monday, January 14, 2013 at 12:02 AM | Permalink | Comments (0) | TrackBack (0)
Edward A. Morse of Creighton and Vasant Raval of Creighton Business have written Private Ordering in Light of the Law: Acheiving Consumer Protection through Payment Card Security Measures, 10 DePaul Business & Commercial Law Journal 213 (2012). Here's the abstract:
A private ordering regime has developed within the payment card industry to define appropriate security practices and to monitor compliance by network participants. Market demands for trustworthy systems upon which consumers and merchants could rely provide incentives for security, which the card brands supplement by privately designed fines and sanctions imposed through contract. Although private ordering has functioned sufficiently well to make payment cards a trusted payment method, the system is not completely secure, as data security breaches continue to occur. This is not surprising, as complete security is not a feasible goal. Nevertheless, some have questioned whether additional government regulation is necessary to protect consumers. This article explores the effects of legal intervention, including disclosure laws, on this private ordering system. It questions whether additional government intervention would enhance consumer welfare, particularly when consumers will likely bear the ultimate costs of such regulation. It recommends modifications in breach disclosure laws to eliminate individual notice requirements in favor of public notices, which may reduce costs and enhance consumer welfare. It challenges “bounty” enforcement regimes, such as FACTA, which offer little marginal benefit to consumers while substantially raising costs. It identifies practical and political problems presented by the different capacities of large and small firms to bear security costs, which are not easily solved under either private ordering or legislative approaches. Finally, it offers a set of policy issues as a possible agenda for consideration by policy makers and researchers in this domain.
Posted by Jeff Sovern on Sunday, January 13, 2013 at 06:07 PM in Consumer Law Scholarship, Credit Cards | Permalink | Comments (0) | TrackBack (0)
Omri Ben-Shahar of Chicago has written Arbitration and Access to Justice: Economic Analysis. Here is the abstract:
Mandatory arbitration clauses in consumer contracts are widely regarded as problematic because they limit consumer’s access to judicial forums, to fair procedures, and potentially to any kind of remedy. But rather than looking at consumers as a group, I examine which sub groups of consumers are affected by this limitation more than others. I argue that in most circumstances, access to courts benefits the elite, not the weak. It is a species of open-access policy that has an unintended regressive effect. Paradoxically, rules that limit the use of pre-dispute arbitrations clauses hurt, rather than protect, weaker consumers, as they mandate a regressive reallocation. I also consider the role of class actions, and whether weak consumers are potentially the indirect beneficiaries of class action litigation. This argument has theoretical merit, but it, too, is limited in ways that are often unappreciated.
Posted by Jeff Sovern on Friday, January 11, 2013 at 07:27 PM in Arbitration, Consumer Law Scholarship | Permalink | Comments (1) | TrackBack (0)
by Paul Alan Levy
I often write in this space about baseless lawsuits brought by businesses to suppress criticism, although at the same time I have acknowledged that, sometimes, litigation may be a sound response to baseless attacks that are having a genuine untoward impact on reputation.
In this interesting blog post on a web site devoted to search engine issues, spurred by Dietz v. Perez, about which I have blogged here, Neg Norton thinks through some of the options that a business owner needs to consider in deciding how to respond to criticism on Yelp or a similar forum discussing the dangers as well as the benefits of bringing suit. He offers "five tips to consider when responding to negative online reviews, which take into account lessons learned from Dietz’s approach."
Dietz's lawyer has been telling the media about the calls he is getting from prospective new clients who want to bring lawsuits, emulating Dietz; I wonder if he is giving them cautionary advice or just signing them up to litigate?
Posted by Paul Levy on Friday, January 11, 2013 at 06:40 PM | Permalink | Comments (1) | TrackBack (0)
This week, the Supreme Court decided Already v. Nike. There, in a trademark suit instituted by Nike, Already counterclaimed that Nike's trademark on its "Air Force 1" sneakers is invalid. Applying the Court's standard for when a once justificiable case becomes moot under Article III's case-or-controversy requirement -- “a defendant claiming that its voluntary compliance moots a case bears the formidable burden of showing that it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur.” Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U. S. 167, 190 (2000) -- the Court held that Already's counterclaim was moot. (For a fun and potentially useful application of the Friends of the Earth standard, see City of Erie v. Pap's A.M.)
Assuring that a case is justiciable at the outset and remains justificable throughout is often a big challenge for consumer, environmental, and civil rights plaintiffs (as well as to the Alreadys of the world). Rochelle Broboff of the Constitutional Accountability Center has penned a short piece explaining that although Already held that the dispute there had become moot, language in the Court's decision (and in a four-Justice conurrence) may be useful to plaintiffs in a range of public-interest cases. Rochelle's piece is reproduced below.
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The Supreme Court’s decision today dismissing a trademark dispute as moot has language that could be helpful in numerous contexts, including environmental cases, public benefits, employment, etc. In a unanimous opinion written by Chief Justice Roberts, the Court emphasized the heavy burden on the party alleging mootness to prove that the allegedly illegal activity cannot recur. In a concurrence, Justice Kennedy, joined by Justices Thomas, Alito, and Sotomayor, suggested that courts “proceed with caution before ruling” that a claim is moot due to voluntary cessation. Already LLC v. Nike, Inc., No. 11-982, 2013 WL 85300 (Jan. 9, 2013).
Nike sued Already for a trademark violation and Already countersued challenging the validity of Nike’s trademark. Nike then issued a “Covenant Not to Sue” and moved to dismiss the claim and counterclaim. Already opposed dismissal of its counterclaim, contending Nike had not proven that the counterclaim is moot. The district court dismissed the counterclaim, and the Second Circuit affirmed. The Supreme Court also affirmed.
The Court stated: “a defendant cannot automatically moot a case simply by ending its unlawful conduct once sued. Otherwise, a defendant could engage in unlawful conduct, stop when sued to have the case declared moot, then pick up where he left off, repeating this cycle until he achieves all his unlawful ends.” (Citations omitted.) The Court noted that the party alleging mootness bears a heavy burden to show that the allegedly wrongful behavior could not reasonably be expected to recur. Because Nike’s covenant was “unconditional and irrevocable,” the Court held that the burden was met. The Court noted that the lower courts in the case did not “expressly invoke the voluntary cessation standard,” but nevertheless their analysis addressed the same questions. The Solicitor General had recommended a remand, but the Court found that unnecessary, based on “uncontested findings” of the district court, affirmed by the Second Circuit.
Concurring, Justice Kennedy noted that the district court and court of appeals wrongly placed the burden on Already to show that a justiciable controversy remained. Kennedy emphasized that the burden is on the party asserting mootness. He explained: “In the circumstances here, then, Nike must demonstrate that the covenant not to sue is of sufficient breadth and force that Already can have no reasonable anticipation of a future trademark infringement claim from Nike.” Kennedy cautioned lower courts to give careful consideration to whether the use of a covenant not to sue has truly mooted a case, since even the initiation of a suit can harm a competitor by forcing disclosure of future business plans or the expenditure of funds in the litigation.
Rochelle Bobroff
Director, Access to Courts Program
Constitutional Accountability Center | 1200 18th Street NW, Suite 501| Washington, DC 20036
O: 202.296.6889 EXT. 302 | F: 202.296.6895 | www.theusconstitution.org | Rochelle@theusconstitution.org
Posted by Brian Wolfman on Friday, January 11, 2013 at 09:17 AM | Permalink | Comments (0) | TrackBack (0)