Airline Fees Make It Very Difficult to Comparison Shop Based on Price

by Brian Wolfman

We explained recently that airlines may be misleading consumers into paying add-on fees for seats by tricking consumers in thinking that most of the good seats are sold out when they really aren't. And we've covered the issue of airline fees and prices generally many times (go, for instance, here and here).

Now, read this AP story by Joan Lowy, which explains that the ubiquity of airline fees charged separately from the base travel price, and the failure of the airlines to provide fee information to on-line travel agents such as Orbitz, are making it very difficult for consumers to comparison shop on the basis of price. The Obama Administration is considering new regulations, and one Transportation Department regulation is under fire from the airlines in the courts.

Here's an excerpt from Lowy's article:

For many passengers, air travel is only about finding the cheapest fare. But as airlines offer a proliferating list of add-on services, from early boarding to premium seating and baggage fees, the ability to comparison-shop for the lowest total fare is eroding. Global distribution systems that supply flight and fare data to travel agents and online ticketing services like Orbitz and Expedia, accounting for half of all U.S. airline tickets, complain that airlines won't provide fee information in a way that lets them make it handy for consumers trying to find the best deal. * * * Now the Obama administration is wading into the issue. The Department of Transportation is considering whether to require airlines to provide fee information to everyone with whom they have agreements to sell their tickets. A decision originally scheduled for next month has been postponed to May, as regulators struggle with a deluge of information from airlines opposed to regulating fee information, and from the travel industry and consumer groups that support such a requirement. Meanwhile, Spirit Airlines, Allegiant Air and Southwest Airlines — with backing from industry trade associations — are asking the Supreme Court to reverse an appeals court ruling forcing them to include taxes in their advertised fares. The appeals court upheld a Transportation Department rule that went in effect nearly a year ago that ended airlines' leeway to advertise a base airfare and show the taxes separately, often in smaller print. Airlines say the regulations violate their free-speech rights.

Privacy Invasions That Also Discriminate

by Jeff Sovern

Regular readers of this blog will know that businesses use cookies, etc. to track consumer online behavior for marketing purposes. But what may be less well known is that businesses use the information they glean online to offer different consumers different prices.  A recent paper makes the point. See Jakub Mikians, László Gyarmati, Vijay Erramilli, & Nikolaos Laoutaris, Detecting price and search discrimination on the Internet (finding price differences based on the customer’s location and affluence). I wonder if such behavior might produce discrimination based on race, gender, etc.  If so, will Congress do for the internet what it did for credit lending in the Equal Credit Opportunity Act and other statutes: prohibit objectionable discrimination?

The Boca Raton Scam on Non-Profits Pops Up Again (Yet Another Name)

by Paul Alan Levy

This morning's Washington Post carries a report on a scam operation preying on non-profits, based in Boca Raton -- the scammers lure the credulous by using the name of a famous news personality, promising priceless exposure on PBS, then charge $23,400 for the privilege of having a short film created for that purpose. 

We litigated against a similar group of scammers a few years ago, and found that they would change their name every time the light of publicity was shined on them.  And each time the news personality, embarrassed to have the way in which his or her name was being associated with scandal, would withdraw and the scammers would recruit a new personality.

It will be interesting to learn whether "In Focus Martin Sheen" follows the same pattern -- and, indeed, whether the same folks are behind this new iteration of the same old ploy.

Prior Restraint Doctrine Protects Negative Yelp Review Against Preliminary Injunction

by Paul Alan Levy

Today we have joined forces with the American Civil Liberties Union of Virginia to seek appellate review of the preliminary injunction recently entered by a trial judge in Fairfax County, Virginia, requiring Jane Perez to make two changes in reviews of a Washington D.C. contractor named Christopher Dietz that she had posted on Yelp and Angie’s List.  The trial judge had pointedly refused to grant the injunction that Dietz requested, requiring that the entire posts be removed — the judge said that he was not persuaded that Perez’ criticisms of Dietz’s work were unsupported.  (The original injunction request is linked from the original Washington Post story on the case)   Dietz began a public relations offensive declaring victory, insisting that the suit would continue until he obtained damages and an apology, and further demanding that Yelp and Angie’s List “stop hiding behind section 230.”

Even though the outcome of the preliminary injunction hearing was largely a victory for the defendant (the entire transcript of the hearing, including the testimony and the judge’s oral ruling, as well as the exhibits about which the witnesses testified, are linked from this page), we decided that it was important to seek appellate review. 

Should Non-Profit Groups That Engage in Electioneering Have to Fully Disclose Their Budgets and Their Donors?

The Supreme Court has in recent years famously struck down laws that barred corporate electioneering  on First Amendment grounds. But the Court has had little problem with laws that demand disclosure about who is contributing to elections and how much (though the Court protects anonymous speech in other contexts). With that in mind, read this L.A. Times article describing proposed new rules in New York that would require non-profit groups that do electioneering to dislose their budgets and their donors. Here's an excerpt:

The push by states to force politically active nonprofits to disclose their financial backers ratcheted up Wednesday as New York's attorney general proposed tough rules that could require many such tax-exempt groups to publicly report their political budgets and donors. The regulations, which Atty. Gen. Eric T. Schneiderman plans to issue in spring after a public comment period, could affect some of the biggest outside groups that engage in federal political campaigns, including American for Prosperity, the League of Conservation Voters, the National Rifle Assn. and NARAL Pro-Choice America.

Consumer Issues Are Everywhere, Even on First Dates

So the Times reports here.   

Instagram's Binding Arbitration Clause Could Be the Worst Ever: It Seeks to Kill Off All Representative Actions

by Brian Wolfman

Earlier this year, we told you (here, here, and here) about eBay's terrible new arbitration clause that bars its customers, both sellers and buyers, from participating in class actions against the company. The new clause came with a cynical twist: eBay allowed its customers to opt out of the clause within a tight deadline if they sent a snail-mail letter to the company containing a bunch of specific information. The right to opt out was all corporate double-speak from eBay. If eBay really wanted to give its customers a choice, it would have let them choose an arbitral or judicial forum when their disputes with eBay arose. At the least, eBay could have allowed its customers to opt out via an email reply to the company's email announcing the new policy, rather than by snail mail. But eBay just wanted to give its arbitration clause the aura of consent when, in fact, it was driving the clause down its customers' throats.

Now, as The Consumerist explains here, the photo-sharing company Instagram is following in eBay's footsteps -- with a pre-dispute binding arbitration clause and a class-action ban, along with a largely illusory opt-out provision. (The Consumerist is trying to organize an opt-out campaign against eBay, just as Public Citizen did against eBay.)

But the Instagram aribtration clause is even worse than eBay's. As The Consumerist notes, Instagram's clause bans its customers' participation in an Attorney General's (or other public official's) representative action, such as an action brought under the California Business and Professions Code. After banning class actions, the Instagram provision goes on to say:

You also agree not to participate in claims brought in a private attorney general or representative capacity, or consolidated claims involving another person’s account, if Instagram is a party to the proceeding. [emphasis added]

Many state high courts, I believe, would think of this ban on participation in all representative actions (and the way it is being extracted from consumers) as unconscionable and, thus, unenforceable. Instagram's ban strikes me as a serious affront to state consumer enforcement policies around the country. Would the U.S. Supreme Court require the ban's enforcement under the Federal Arbitration Act even if a state supreme court found it unconscionable? Perhaps we'll find out.

The Obama Judiciary

Consumer advocates generally believe that federal judges nominated by President Obama are more likely to decide cases favorably to consumers than are judges nominated by the President's recent Republican predecessors. So, how has the President fared with his nominations?

Bob Barnes of the Washington Post has penned this article that discusses the President's judicial nominations. Barnes's article notes that (1) there are more federal judicial vacancies now than when President Obama took office in 2009; (2) the delay in filling vacancies is the fault of the Senate in not acting promptly on the President's nominations and the fault of the President in not making nominations promptly; and (3) the President has not had any of his nominees to the D.C. Circuit confirmed, even though there are three vacancies on that court (and there soon will be a fourth).

Barnes's piece relies heavily on a study by Brookings Instiution scholar Russell Wheeler that looked in detail at the nomination and confirmation process during the President's firm term.

Food Safety for the Holiday Season Eating Orgy

The Consumer Federation of America provides tips for safe holiday food use and preparation here.

Freer on Recent (and Future?) Supreme Court Class Action Cases

Richard D. Freer of Emory has written The Supreme Court and the Class Action: Where We Are and Where We Might Be Going.  Here's the abstract:

In 2010 and 2011, the Supreme Court decided five class action cases. In 2012, it has agreed to hear four more. This piece summarizes what the Court has done and where it appears to be going concerning aggregate litigation. The goal of this piece is more practical than theoretical: to place all nine cases in context and draw preliminary conclusions about the impact these cases have had and will have --not only on class action practice, but in other areas, including the Erie Doctrine, waivers of class arbitration, anti-suit injunctions, the binding effect of judgments on class members, enforcement of Rule 10b-5, and the apparent efforts of defendants to front-load litigation by demanding greater consideration of merits-based facts (and qualification of experts) at the class certification stage.

The cases dealing with waivers of class arbitration implicate the role of the civil suit in law enforcement. If small (usually consumer) claims cannot be pursued on an aggregate basis, they may never be vindicated; individuals and lawyers will not find it economically feasible to do so. Yet the Court appears unwilling to recognize a public-policy exception to the primacy of contract. Thus, if the underlying contract waives aggregate litigation or arbitration, apparently this will not be trumped by the concern that the relevant law (often consumer protection laws) will not be enforced through civil litigation.