Will the OCC be Less Protective of Banks and More Protective of Consumers Under Its New Head Curry?

The Wall Street Journal weighs in.  Excerpt:

* * * Mr. Curry vowed to change the perception that the OCC is too cozy with banks it regulates.

* * *

"It's one of my goals as comptroller to really eradicate or eliminate that perception, and you do that by doing the job," Mr. Curry said.

* *  *

Some critics of the agency say they are encouraged by Mr. Curry's attitude toward J.P. Morgan and other problems, such as the foreclosure crisis.

"He's taken, to me, a different tone," said George Washington University law professor Arthur Wilmarth.

* * *

Before President Barack Obama nominated Mr. Curry as comptroller, he served two stints as the top Massachusetts banking regulator, and took pro-consumer positions as a director at the FDIC.

Many banking regulations are worked out jointly among regulators, and "the OCC has been a very negative presence behind the scenes in Washington for many years," said Travis Plunkett, legislative director of the Consumer Federation of America.

To have the agency under the leadership of someone with Mr. Curry's track record could significantly affect future banking and consumer regulations, he said.

Mr. Curry declined to comment on future changes at the OCC, although he said his goal of being a "premier" bank regulator is "probably going to require some changes in terms of outlook at a minimum" and potentially staff changes.

GlaxoSmithKline Pleads Guilty to Massive Criminal Fraud in Marketing Drugs for Off-Label Uses

When drug companies market their products for off-label uses to doctors, hosptials, and others, consumers may be injured or die. After all, an off-label use is a use that the FDA has not found to be safe and effective. In recent years, the FDA and the Justice Department have stepped up their criminal prosecutions of drug companies that market their products for off-label uses.

Yesterday, the Justice Department announced that the Deparment along with its

law enforcement partners have reached an historic $3 billion resolution with the pharmaceutical manufacturer GlaxoSmithKline, LLC, to resolve multiple investigations into the company’s sales, marketing, and pricing practices. This action constitutes the largest health care fraud settlement in United States history. [emphasis added] It underscores our robust commitment to protecting the American people from the scourge of health care fraud. And it proves the effectiveness of the strong relationships we’ve forged with our partners to help ensure the health and safety of the American people, and to safeguard the integrity of our health care system. Under the agreements announced today, GSK will plead guilty to criminal charges and pay $1 billion in criminal fines and forfeitures for illegally marketing and promoting the drugs Paxil and Wellbutrin for uses not approved by the FDA – including the treatment of children for depression, and the treatment of other patients for ailments ranging from obesity, to anxiety, to addiction and ADHD – and for failing to report important clinical data about the drug Avandia to the Food and Drug Administration.  GSK will pay an additional $2 billion to resolve civil allegations that it caused false claims to be submitted to federal health care programs for these and other drugs as a result of the company’s illegal promotional practices and payments to physicians.  This settlement also resolves a civil investigation of the company’s alleged underpayment of rebates that were required under the Medicaid Drug Rebate Program.

Go here  to read the complaint, the plea agreements, and other information concerning the prosecution.

This AP story provides more details.

 

"How America's biggest banks took part in a nationwide bid-rigging conspiracy"

In a recent Rolling Stone article entitled “The Scam Wall Street Learned From the Mafia: How America's biggest banks took part in a nationwide bid-rigging conspiracy - until they were caught on tape,” by consumer reporter Matt Taibbi writes about a financial corruption trial against three bank executives in the case United States v. Carollo, Goldberg and Grimm. Although Taibbi begins by characterizing the case as, on the surface, “a snoozefest” about minor antitrust violations, he goes on to explain that it involved a “gigantic rip-off” by banks that “secretly collude[ed] to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from 'virtually every state, district and territory in the United States,' according to one settlement.” Describing the trial as presenting clear evidence that Wall Street has moved into a "cartel-type brand of criminality," Taibbi offers an interesting and provocative take on the case.

California Legislature Passes Landmark Foreclosure Protection Law

The LA Times explains here. And here's an excerpt:

California lawmakers have passed legislation that would provide homeowners with some of the nation's strongest protections from foreclosure and such aggressive bank practices as seizing a home while the owner is negotiating to lower mortgage payments. After years of distress in the housing and mortgage markets, during which lenders seized nearly a million California houses, legislators Monday sent a pair of Assembly and Senate bills to Gov. Jerry Brown designed to help financially troubled borrowers stay in their homes. The legislation would make California the first state to prohibit lenders from "dual tracking," the practice of negotiating with clients to modify a mortgage so that payments become more affordable while simultaneously pursuing foreclosure. In such cases, homeowners can wind up being evicted even though they had been working with the bank to modify their loans.

According to the article, the legislation would . . .

• Prohibit lenders from "dual tracking," or pursuing a foreclosure even though the homeowner is negotiating to modify the mortgage loan.

• Outlaw "robo-signing," or mortgage servicers' improper or faulty processing of foreclosure documents.

• Allow homeowners and state agencies to sue financial institutions for economic and civil damages, under limited circumstances.

•Require banks and loan servicers to provide a single representative for a borrower to work with, to prevent bureaucratic mazes.

Under Supreme Court Decision, States Can Opt Out of Medicaid Expansion, But Will They?

No, according to this Washington Post article, which makes the point that the federal funding offered to the states is too good to pass up. (Which is true for most Spending Clause programs, which is why states participate in the first place.) And the states whose citizens will benefit the most are red states (defined as states that voted for Senator McCain in the last election), as shown in the chart below: (Click on the chart to enlarge it.)

Charles Carreon Digs Himself Even Deeper—and Register.com Betrays a Customer

by Paul Alan Levy

Recently, Public Citizen was aligned with a lawyer named Charles Carreon, filing an amicus brief in support of his argument against allowing a publisher to pursue a a copyright-infringement lawsuit against his wife’s Oregon company in federal court in New York.  The former colleague who wrote this amicus brief argued the personal jurisdiction issue orally, so well that Carreon did not feel the need to come argue himself (a good thing too – his appellate brief was terrible).   And it has seemed to me that some of the online criticism directed his way for having sent a demand letter for a client, complaining that a blogger had defamed the client, had become a bit excessive.  I had turned down requests that I represent some of the defendants in Carreon’s earlier litigation, because, although it was apparent that he was litigating strange claims to punish his critics, the theories in the case either were not interesting enough to make a good vehicle for impact litigation, or would have had to be advanced on behalf of entities that could easily afford to hire their own lawyers.  (But see EFF’s fabulous response to Carreon’s TRO motion) .

However, when Carreon put forward bogus trademark theories as a basis for threatening suit against a critic, he crossed a line that has now brought Public Citizen into the fray.

Joshua Fairfield: Is Do-Not-Track Enforceable In Contract?

 

Joshua Fairfield

 of Washington and Lee has written 'Do-Not-Track' as Contract,14 Vanderbilt Journal of Entertainment and Technology Law 101 (2012).  Here's the abstract:

Support for enforcement of a do-not-track option in browsers has been gathering steam. Such an option presents a simple method for consumers to protect their privacy. The problem is how to enforce this choice. The Federal Trade Commission (FTC) could enforce a do-not-track option in a consumer browser under its section 5 powers. The FTC, however, currently appears to lack the political will to do so. Moreover, the FTC cannot follow the model of its successful do-not-call list since the majority of Internet service providers (ISPs) assign Internet addresses dynamically — telephone numbers do not change, whereas Internet protocol (IP) addresses may vary.

This Article explores whether, as a matter of contract law, a browser do-not-track option is enforceable against a corporation, and concludes that it is. The emerging standard of online consent has been whether a party proceeds with a transaction after the counterparty informs the party of the terms of the contract. Adhesion contracts in electronic contexts have bound consumers for over a quarter century in precisely this manner.

This Article argues that what applies to consumers should apply to corporations. When a consumer expresses her preference, in the very first exchange between the consumer and corporate computers, for the corporation not to track her information, the company is free to refuse the transaction if it does not wish to continue on the consumer’s terms. This Article therefore proceeds in three broad parts. Part I introduces the current methods of corporate surveillance of consumers, which have reached dizzying heights. Part II discusses the law of e-commercial and mass-market contracts, which courts have held to bind consumers even on the merest fig leaf of a legal theory of consent. Part III proposes a solution: the answer is not to continue making consumers read more privacy policies on various websites, but instead to enforce the simple preferences that the consumer expresses once.

The Supreme Court's Top 10 of the Just Completed Term

A nice chart from the National Law Journal. For each top-10 case link, you get the line-up of the Justices and a case description and holding.

Electric Cars Hitting the Road This Summer in California

A combination of tough state enironmental regulations (tough at least compared to the rest of the country) and consumer tax incentives have opened the California market to an infusion of electric cars, some from the big auto companies, but some (interestingly) from start-ups. Read about it here.

Investigative Report Saying That Chief Justice Roberts Switched Vote on Health Care Ruling

I wonder who at the Court are the sources for this story. This CBS invesitgative report by Jan Crawford says that Chief Justice Roberts first decided to vote with Justices Scalia, Kennedy, Thomas, and Alito to strike down the so-called health care mandate, then switched to where he ended up (upholding the law as a tax), and then was lobbyied hard, particularly by Justice Kennedy, to come back to the "conservative" fold. Here are some excerpts:

Chief Justice John Roberts initially sided with the Supreme Court's four conservative justices to strike down the heart of President Obama's health care reform law, the Affordable Care Act, but later changed his position and formed an alliance with liberals to uphold the bulk of the law, according to two sources with specific knowledge of the deliberations. Roberts then withstood a month-long, desperate campaign to bring him back to his original position, the sources said. Ironically, Justice Anthony Kennedy - believed by many conservatives to be the justice most likely to defect and vote for the law - led the effort to try to bring Roberts back to the fold." He was relentless," one source said of Kennedy's efforts. "He was very engaged in this."  * * * There were countless news articles in May warning of damage to the Court - and to Roberts' reputation - if the Court were to strike down the mandate. Leading politicians, including the President himself, had expressed confidence the mandate would be upheld. Some even suggested that if Roberts struck down the mandate, it would prove he had been deceitful during his confirmation hearings, when he explained a philosophy of judicial restraint. It was around this time that it also became clear to the conservative justices that Roberts was, as one put it, "wobbly," the sources said. * * * Roberts focused the majority opinion on a much more difficult legal proposition: the tax power.But Roberts also would limit Congress' authority in future cases under the commerce power. Roberts then engaged in his own lobbying effort - trying to persuade at least Justice Kennedy to join his decision so the Court would appear more united in the case. There was a fair amount of give-and-take with Kennedy and other justices, the sources said. One justice, a source said, described it as "arm-twisting." Even in Roberts' opinion, which was circulated among the justices in early June, there are phrases that appear tailored to get Kennedy's vote. Roberts even used some of the same language that Kennedy used during oral arguments. During the arguments in March, Kennedy told Solicitor General Donald Verrilli:

Here the government is saying that the federal government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases - and that changes the relationship of the federal government to the individual in a very fundamental way.

Roberts wrote in the section of his opinion analyzing the Commerce Clause:

Accepting the government's theory would give Congress the same license to regulate what we do not do, fundamentally changing the relation between the citizen and the federal government.

It is not known why Roberts changed his view on the mandate and decided to uphold the law. At least one conservative justice tried to get him to explain it, but was unsatisfied with the response, according to a source with knowledge of the conversation.