President Obama's Reaction to the Cordray Filibuster

We may be looking at a recess appointment (assuming there is a recess). Read about it here.

Senate Blocks Cordray Confirmation

Story here.

Should There Be a "Robin Hood" Tax?

. . . a very small tax levied on financial transactions. As explained here, it's supported by Angela Merkel and Nicolas Sarkozy, among others. President Obama is skeptical.

Expected Tough Sledding for Richard Cordray

As today's Washington Post explains, Richard Cordray is unlikely to beat a filibuster in a key vote today in the Senate on his nomination to head the Consumer Financial Protection Bureau. If, as the article notes, "moderates" like Maine Senator Susan Collins are not in your camp, things are not looking up.

Self-Styled On-Air Consumer Experts "Evaluate" Products While Getting Paid by the Product's Owner

Federal and (sometimes) state law prohibit on-air promotions of a product in which the promoter has a financial interest without disclosure of that interest. For a nice summary of the federal and state anti-payola and anti-plugola rules go here. Today's Washington Post has this front page article arguing that these laws are frequently violated. Here's an excerpt:

Alison Rhodes is passionate about child safety, and in hundreds of TV news interviews, the self-styled “Safety Mom” has talked up products designed to increase it. During a segment on [D.C. Fox affiliate] WTTG's morning news last year, for example, Rhodes showed off a home electronic monitor made by ADT and a backpack with a built-in alarm known as the iSafe bag. “It’s amazing,” she gushed to Fox5 host Tony Perkins about the backpack. “It really is amazing.” What neither Rhodes nor WTTG mentioned to viewers was this: The companies Rhodes mentioned on the air had paid her to plug their products. In effect, Rhodes’s appearance was a kind of stealth commercial dressed up as a traditional product-review interview. Such product-friendly segments aren’t just potentially deceptive; they’re illegal, under a federal law ... . *** In practice, however, the law is rarely enforced.

Elizabeth Renuart Article on Ibanez

Elizabeth Renuart

of Albany has written Property Title Trouble in Non-Judicial Foreclosure States: The Ibanez Time Bomb? Here's the abstract:

The economic crisis gripping the United States began when large numbers of homeowners defaulted on poorly underwritten subprime mortgage loans. Demand from Wall Street seduced mortgage lenders, brokers, and other players to churn out mortgage loans in extraordinary numbers. Securitization, the process of utilizing mortgage loans to back investment instruments, not only fanned the fire; the parties to these deals often handled and transferred the legally important documents that secure the resulting investments — the loan notes and mortgages — in a careless manner.

The consequences of this behavior are now becoming evident. All over the country, courts are scrutinizing whether the parties initiating foreclosures against homeowners legally possess the authority to repossess those homes. When the authority is absent, foreclosure sales may be reversed. The concern about authority to foreclose is most acute in the majority of states where foreclosures occur with little or no judicial oversight before the sale, such as Massachusetts. Due to the decision in U.S. Bank N.A. v. Ibanez, in which the Supreme Judicial Court voided two foreclosure sales where the foreclosing parties did not hold the mortgage, Massachusetts is the focal jurisdiction where an important conflict is unfolding.

This article explores the extent to which the Ibanez ruling may have traction in other nonjudicial foreclosure states and the likelihood that clear title to foreclosed properties is jeopardized by shoddy handling of notes and mortgages. I focused on Arizona, California, Georgia, and Nevada because they permit nonjudicial foreclosures and they are experiencing high seriously delinquent foreclosure rates. After comparing the law in these states to that of Massachusetts, I conclude that Ibanez should be persuasive authority in the four nonjudicial foreclosure states highlighted herein. However, property title trouble resulting from defective foreclosures may be more limited in Arizona and Nevada. The article also provides a roadmap for others to assess the extent to which title to properties purchased at foreclosure sales or from lenders’ REO inventories might be defective in other states. Finally, the article addresses the potential consequences of reversing foreclosure sales and responds to the securitization industry’s worry about homeowners getting free houses.

 

 

Chik-fil-A and “Eat More Kale” – a Pox on Both Your Houses

by Paul Alan Levy

When I first heard about Chik-fil-A’s threats against Vermont silk-screen artist Bo Muller-Moore over his use of the slogan “Eat More Kale,” claiming that the slogan infringes or dilutes their trademark in the advertising slogan “Eat Mor Chikin” my first reaction was outrage.  Certainly nobody is going to confuse eating kale with eating chicken, so an infringement claim is absurd.  And the cute “Eat Mor Chikin” slogan does not give the Atlanta-based chain any general entitlement to prevent others from using the phrase “Eat More.”  So there is also no dilution, wholly apart from the fact that Muller-Moore might well argue that “Eat More Kale” is protected as a parody of Eat Mor Chikin. 

As its cease-and-desist letter began to blow up in its face, Chik-fil-A trotted out that old war-horse defense for trademark bullying: “we must legally protect and defend our [trademarks] in order to maintain rights to the slogan.”   This is nonsense.  There is no infringement here, and there is no dilution.  Companies do not have to send out foolish and abusive communications to defend their rights in valid trademarks.  Apparently, this is not the first time Muller-Moore received a cease-and-desist letter from Chik-fil-A; he got one five years ago, there was an exchange of correspondence, and Muller-Moore just continued as he was.  Assuming that this acquiescence did not injure Chik-fil-A's trademark rights, there was no need for more threats now.

But although I am pleased to see Chik-fil-A pay the public relations price for abusive behavior, the more I thought about the controversy the less sympathy I had for Muller-Moore.  In fact, he brought this situation on himself by his own abusive behavior. 

The occasion for the new cease-and-desist letter was his filing of a federal trademark application for the phrase “Eat More Kale.”  As much as I like the humor in the slogan, which plays a vegetarian angle on the better-known slogan, why should Muller-Moore be able to prevent other members of the public from making T-shirts with the same slogan?  It seems terribly unlikely that members of the public would see that slogan and think about Muller-Moore, or assume that his company made the shirts.  The slogan is not a mark that identifies his business – it is a cute slogan that makes fun of Chik-fil-A and at the same time promotes the consumption of a healthy vegetable.

For that reason, I found the Change.org petition supporting Muller-Moore particularly troubling.  The headline is, “Stop Bullying Small Business Owners,” but if you look at the text below, it is apparent that the hope is to give Muller-Moore the ability to bully other small business owners himself, by preventing them from printing the same phrase on T-shirts.  “A federal trademark would block other artists from copying his design (which has happened in the past) and protect the livelihood he's worked so hard to build.”  Right – it would sustain his livelihood by giving him a monopoly on a phrase that belongs in the public domain.  And Muller-Moore did not even invent the phrase – according to his web site's home page, he first put the words on shirts on a special order for his neighbors “Paul and Kate of High-Ledge Farm.”   

So my reaction, in the end, is, a pox on both your houses.  Muller-Moore’s trademark application ought to be denied, but not for the reasons given by Chik-fil-A.

Bruce Bartlett on Increasing Taxes on the Wealthy

Former Reagan and Bush I Administration official Bruce Bartlett has just penned this column on why, in his view, wealthy people's taxes must go up. It contains some interesting economic data and discussion of what types of spending and tax cuts actually stimulate the econony, and so it's worth reading the whole column. In the end, Bartlett concludes that "[t]he point is not to punish the rich for being rich — Republicans routinely scream “class warfare” whenever anyone suggests higher taxes on the rich — but to raise revenue. If the rich don’t pay more, everyone else will have to." One part of Bartlett's piece, though not central to his theme, reveals how silly the political discourse on the debt and taxes can become:

Recognizing the intellectual and political weakness of their position [that rich should not pay a dime more in taxes], Republicans have responded that there is nothing to stop rich people from sending checks to the Treasury Department to reduce the debt. About $3 million is annually donated to the government for this purpose. On Oct. 12, Senator John Thune, Republican of South Dakota, introduced legislation that would add a line on tax returns to make voluntary contributions to the Treasury. It was enthusiastically endorsed by the anti-tax activist Grover Norquist. Reducing the deficit through voluntary contributions is not a serious idea. It would be a drop in the bucket, such contributions are not sustainable, and it would be unwise to have the government dependent on them because inevitably they would come with strings attached.

Law Graduate Employment Data to Become More Detailed and Available

This blog covers issues of interest (we hope) to consumers. And law students and prospective law students are certainly consumers. As some of our readers are likely aware, there's been controversy over the quality and quantity of data about the employment of recent law school graduates. The National Law Journal is reporting that the ABA is changing the types of employment data that it will request from law schools and thereafter make public, and it will make the data available faster.

The Journal notes the ABA's key changes, the third bullet of which may be most important:

• Law schools will report their graduate employment and salary data directly to the ABA, rather than through the National Association of Law Placement.

• Graduate employment information will be made available to the public faster. Instead of being published two years after a particular class graduates, the data will be collected earlier in the year and will be made public approximately one year after graduation.

• Law schools will have to report whether graduates are in jobs funded by the schools, themselves. They will have to stipulate whether graduates are in jobs requiring bar passage; positions for which J.D.s are an advantage; professional positions that do not require a J.D., non-professional positions; and whether jobs are long-term or short-term.

• Employment and salary information must be reported for each individual graduate rather than in the aggregate, giving the ABA the ability to audit the figures.

The non-profit group Law School Transparency, founded in 2009 by two Vanderbilt Law School students (now graduates), has been pushing for these and other changes.

Debt Collection Scenarios and Rules Dramatized

Here.  HT to Dee Pridgen.