President to Nominate Joshua Wright to FTC

You can read a New York Law Journal report here.  Wright is a professor at George Mason.  The article highlights his devotion to Chicago-school economics and reports that he rejects the use of behavioral economics in antitrust. The article also opines that if Governor Romney wins the presidency, Wright would be a potential FTC Chairman. Wright's SSRN page is here and includes links to some consumer protection pieces, including one that claims that the then-proposed CFPB would make it both harder and more expensive for consumers to borrow.

CL&P Blog Special Report Postponed

by Jeff Sovern

Yesterday I posted a special report on voting on consumer protection issues. I have been asked to remove the post to avoid the appearance of intervening in a political campaign.  Accordingly, I have removed the post and do not plan to post the follow-up posts I had promised until after the election. 

FTC Settles Cases About Improper Use of Consumer Information

The Federal Trade Commission announced this morning that it has settled two cases concerning improper use of consumer credit information. The first settlement resolves FTC allegations that the consumer reporting company Equifax Information Services violated the FTC Act and the Fair Credit Reporting Act by selling lists of consumers who were late on their mortgage payments. Under the settlement, Equifax will pay $393,000. Under a separate settlement, Direct Lending Source, a company that bought the information from Equifax and resold it, will pay $1.2 million and be barred from "using or selling prescreened lists without a permissible purpose, or in connection with solicitations for debt relief or mortgage assistance relief products or services." (Shouldn't all companies be barred from using consumer information without a "permissible" purpose?)

Comparing the Presidential Candidates' Views on Health Care Issues

Today's Washington Post has this article comparing President Obama's and former Governor Romney's positions and track record on a range of health care issues.

More on the eBay Arbitration Opt-Out Campaign

Last Friday, we told you about eBay's anti-class-action arbitration policy and the campaign urging consumers to opt out of eBay's arbitration clause, which seeks to bar consumers' access to the courts. The campaign has been getting a lot of notice from on-line consumer advocacy sites, such as eCOMMERCEBYTES, Tech Crunch, and The Consumerist. Join the campaign here.

 

 

More on Pay-for-Delay Settlements and the Supreme Court

We posted last week about whether the Supreme Court will take on the issue of pay-for-delay settlements. Now, this interesting article by Alison Frankel explains what she views as the FTC's efforts to maximize its influence if and when the Supreme Court grants review.

Soda Vending Machines To Display Calorie Information

As explained in this Huff-Po story . . .

As criticism over sugary sodas intensifies, Coke, Pepsi and Dr Pepper are rolling out new vending machines that will put calorie counts right at your fingertips.The move comes ahead of a new [federal] regulation that would require restaurant chains and vending machines to post calorie information as early as next year, although the timetable and specifics for complying with that requirement are still being worked out.

This follows the New York City Board of Health's final approval of NYC Mayor Michael Bloomberg's ban on the sale of large-sized sugary drinks.

Federal Court Rejects Honda's Effort to Force Auto Safety Class Action Into Arbitration

Businesses these days will go to great lengths to force their customers into arbitration and deny them access to the civil justice system. Sometimes that extends to trying to enforce an arbitration agreement that the customer is not a party to; other times, that extends to trying to enforce an arbitration agreement that the company is not a party to.

That's what the car company Honda tried to pull off in Soto v. American Honda Motor Co., C-12-1377-SI (N.D. Cal.). In Soto, the plaintiffs' class-action complaint alleged in great detail that

Honda's 2008, 2009, and 2010 Honda Accord vehicles ... suffer from a systemic design defect that enables oil to enter into the engine’s combustion chamber. This defect is present when the vehicles are sold and manifests prior to the expiration of the Class Vehicles’ warranty periods, causing excessive oil consumption, premature spark plug degradation, and engine malfunction.

One of the named plaintiffs in Soto had signed an installment sale contract with a dealership, San Leandro Honda, which assigned its rights in the contract to American Honda Finance Corp., Inc. The installment sale contract contained a mandatory arbitration clause, and so American Honda Motor Corporation -- the maker of the allegedly defective cars -- tried to force the case into arbitration. That is, Honda tried to bar its customers' access to the courts regarding claims that Honda's cars are defective on the basis of an arbitration clause in a contract with another entity concerning the financing of the car's purchase.

Federal judge Susan Illston rejected Honda's argument in this no-nonsense opinion.

After Judge Illston ruled, Clarence Ditlow, the head of the Center for Auto Safety, wrote a letter to Honda, urging it to deal with its customers more fairly. The last paragraph of the letter sums it up:

When Honda makes a defective vehicle, it should use it engineers to build a better vehicle not its lawyers to find a legal loophole to avoid responsibility. Some more defects for Honda engineers to work on include the notorious power lumbar support on 2009-12 Accords, automatic transmissions on 2000-04 Accords, Civics and Odysseys and excess brake wear on 2008-10 Accords. CAS has brought these defects to Honda’s attention with no response. As a group that frequently praises Honda for its advances in auto safety, it saddens us to see Honda fall back on quality and responsibility.

The Fine Print, a Fine Read on How a Rigged Economy Harms Consumers

by Theresa Amato [guest post] [cross-posted from faircontracts.org]

The Fine Print, a Fine Read on How a Rigged Economy Harms Consumers

Pulitzer Prize-winning reporter David Cay Johnston asks why the United States ranks forty-seventh out of 224 countries in infant mortality, forty-sixth in the share of our economy spent on public education, thirty-seventh in the quality of our health care (with approximately 50 million without insurance), and “dead last” in 2009 among 190 countries on our current account deficit that measures how much more we import than export.   He concludes that as a country we have been “letting big business damage and destroy competition, escape tax burdens and push down wages.”

For more than four years Johnston has researched appalling examples of corporate greed and government policy complicity that harms consumers and which he sets forth in his very fine book The Fine Print, How Big Companies Use “Plain English” To Rob You Blind.  The book treats the fine print at a macro level, with less about the actual fine print, though it does have a discussion of arbitration clauses and talks about the harmful line items on telephone and cable bills and footnotes in student loans.  Overall he diagnoses the “core problem is with oligopolies and monopolies and their excessive prices, lower quality services and reduced innovation.  They are the principal means, enabled by government, to redistribute income and wealth from the many to the politically connected few.”  [cont'd after the jump]

Review Granted by Supreme Court in Open Government Case

The Supreme Court has agreed to hear McBurney v. Young, which presents the following question:

Under the Privileges and Immunities Clause of Article IV and the dormant Commerce Clause of the United States Constitution, may a state preclude citizens of other states from enjoying the same right of access to public records that the state affords its own citizens?

Specifically, the case challenges a provision of Virginia's Freedom of Information Act that allows state and local Virginia agencies to deny requests for public records on the ground that the requester is not a citizen of Virginia. Click here for access to all the cert-stage briefs.

Two CL&P co-coordinators, Deepak Gupta and Brian Wolfman, are the lead counsel for the petitioners. Deepak is counsel of record. About a dozen students at Georgetown University Law Center have worked on the case since it was filed in early 2009, and two of them played a significant role in drafting the petition for a writ of certiorari. More on this case soon.