The Affordable Care Act Does What It Says It Does: More Under 26-Year-Old Adults Are Insured on Their Parents' Health Plans

The Affordable Care Act requires health insurers to cover the children of their insureds up to age 26. Before this mandate, many insurers cut kids off when they became adults or after they left full-time education. You'd expect the new provision to make a difference. After all, it requires coverage for people whom insurers did not have to cover before. (Its effect on rates is unknown, but I'd guess the new provision has had at least some upward effect on rates.) As it turns out, because young adults are having all sorts of problems finding work (and work that offers health insurance), this provision has made a big difference. Read about that here. For information on how the up-to-age-26 provision works, go to this website.

More on the Tobacco Industry's Suit Against the Government to Nix the FDA's New Package Labels

Last June, we told you about the new graphic tobacco package labels slated to go into effect in November 2012. One of those labels is pictured to the right. After that, we told you about Big Tobacco's suit claiming that requiring the companies to display the government's labels violates the First Amendment. The tobacco companies are seeking a preliminary injunction against the labeling requirement. Here's a story about today's preliminary injunction hearing held in federal district court in Washington, D.C.

First Circuit Revives Large Illegal Downloading Award Against Boston University Student

As explained in this National Law Journal story, the First Circuit has reversed a district court decision holding that a $675,000 damages award for illegal music downloading against Boston University student Joel Tenenbaum was unconstitutionally excessive. The case now goes back to the district court to determine whether the verdict should be remitted under common-law principles. The First Circuit's ruling is here.

Don't Mess with Texas: Dallas County Sues MERS for Unpaid Recording Fees

Yesterday afternoon Dallas County, Texas sued MERS, along with Bank of America, a local Texas lender, and a Texas title insurance company to recover unpaid recording fees. The lawsuit alleges that recorded deeds of trust characterizeing MERS as a deed of trust beneficiary are false statements designed to deprive the county of recording fee revenue. The complaint asserts several theories for recovery including unjust enrichment, negligent misrepresentation, fraud, and violation of a Texas false recording statute. The latter is particularly interesting because it includes a large statutory penalty of $10,000 per occurence.

The complaint, which was filed in state court, appears to have no federal questions and lacks complete diversity, suggesting that successful removal to federal court is unlikely.The team of attorneys assisting Dallas County appear to be well capitalized and sophisticated. (I have proposed lawsuits along these lines here.)

While the potential liability in this case alone is not staggering (a few billion if the statutory penalty theory works), if Dallas wins this lawsuit, other counties in Texas and around the country are likely to follow suit.  But perhaps more important for the future, this lawsuit has the potential to effectively reassert the traditional mortgage and deed of trust theory that MERS effectively ignored. This case, and others like it, are likely to determine whether elected county recorders will remain a relevant in coming generations. The courts adjudicating these cases are going to be forced to confront whether property records will be maintained in transparent legally authoritative public systems maintained by democratically elected local officials or in a secret database maintained by a profit oriented corporation that is owned by banks. Whatever the outcome, this case demands attention from anyone interested in mortgage lending.

Does Sarah Palin Favor Consumer Protection?

Ok, so she didn't actually say anything about consumer protection, but an article in the Times from September 9 (I'm behind in my reading), Some of Sarah Palin's Ideas Cross the Political Divide, has some unexpected (at least to me) statements from Palin that argue for protecting people against big business.  An excerpt:

She made three interlocking points. First, that the United States is now governed by a “permanent political class,” drawn from both parties, that is increasingly cut off from the concerns of regular people. Second, that these Republicans and Democrats have allied with big business to mutual advantage to create what she called “corporate crony capitalism.” Third, that the real political divide in the United States may no longer be between friends and foes of Big Government, but between friends and foes of vast, remote, unaccountable institutions (both public and private).

* * *

“This is not the capitalism of free men and free markets, of innovation and hard work and ethics, of sacrifice and of risk,” she said of the crony variety. She added: “It’s the collusion of big government and big business and big finance to the detriment of all the rest — to the little guys. It’s a slap in the face to our small business owners — the true entrepreneurs, the job creators accounting for 70 percent of the jobs in America.”

Stipanovich Arbitration Article

Thomas Stipanowich

of Pepperdine has written The Third Arbitration Trilogy: Stolt-Nielsen, Rent-A-Center, Concepcion and the Future of American Arbitration, American Review of International Arbitration (2012). Here's the abstract:

For the third time in the modern era, a triad of key Supreme Court decisions represents a milestone in American arbitration. In this highly controversial “Third Arbitration Trilogy,” the U.S. Supreme Court aggressively expands the “revealed” penumbra of substantive arbitration law under the Federal Arbitration Act and shores up the bulwarks of private, binding dispute resolution under standardized contracts of adhesion binding employees and consumers.

In Stolt-Nielsen S.A. v. AnimalFeeds International, 130 S. Ct. 1758 (2010), the Court, against the backdrop of an international commercial contract scheme and a unique procedural scenario, draws upon the wellspring of divined “federal substantive law” under the FAA to pronounce limits on the ability of arbitrators - or courts - to promote public policies supporting class actions. Many understood Stolt-Nielsen, correctly, as a portent of the Court’s eventual curtailment of state-law-based policies against enforcement of contractual waivers of the ability to participate in a class action when coupled with an agreement to arbitrate.

In Rent-A-Center, West v. Jackson, 130 S. Ct. 2772 (2010), the Court declares that public policies promoting enforcement of arbitration agreements effectively trump the authority of courts to deny or limit the enforcement of arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract” - or, more precisely, to police arbitration agreements for unconscionability. Once again, the Court majority “discerns” new Federal substantive law surrounding the FAA. It employs a unique variation on the principle that arbitration agreements are separable from the contracts of which they are a part, aggressively interprets Court precedents transferring from courts to arbitrators authority to resolve enforceability issues, and segregates the determination a contract has been “made” in a formalistic sense from consideration of defenses to its enforceability and validity.

In AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), the Court once again addresses the interface between pro-arbitration policies under the FAA and the countervailing, limiting force of unconscionability doctrine. Yet again, a majority finds pro-arbitration federal policy circumscribes judicial authority to police arbitration agreements under state law. In this case, the result is to enforce a term in the arbitration agreement waiving the consumer’s right to bring a contractual claim as part of a class action.

Its staunchest adherents may insist that the Court’s actions are necessary to effectively promote pro-arbitration policies under the FAA (announced and repeatedly reinforced by the Court since the mid-1980s) while ensuring that lower courts be measured and precise in the handling of countervailing defenses. In its zeal to further its evolving vision of the FAA, however, the Court has eliminated key safeguards aimed at ensuring fundamental fairness to consumers and employees in arbitration. The Court’s most recent decisions have placed dramatic new limits on judicial oversight of arbitration agreements, making the U.S. a relative “outlier” among global sovereigns.

The Court’s extreme and inflexible posture adds momentum to Congressional efforts to dramatically restrict the use of predispute arbitration agreements. Unfortunately, these legislative responses, like the Court’s decisions, lack a solid empirical foundation. As with the Court’s jurisprudence, there is no guarantee that they will produce the best possible solution for employees and consumers.

Good decisions about the public or private resolution of employment and consumer disputes depend upon a commitment to obtain and act upon better information about the operation of specific forms of arbitration in specific transactional settings, along with comparative data respecting court processes. Recent empirical scholarship has moved us closer to this goal, but much remains to be done.

In assessing process options, policy-makers should consider the potential future role of statutory due process standards for arbitration, regulated arbitration, and arbitration that gives individuals the option of proceeding to court. To the extent public tribunals are necessary, it should not be assumed that the court system as presently structured is the most effective way of addressing consumer or employment disputes. It may be appropriate to develop public consumer tribunals or administrative employment tribunals such as those that exist in some other countries.

In assaying public and private process choices, special attention should be given to the opportunities afforded by online dispute resolution (ODR). Finally, effective policy-making in these arenas cannot ignore the primary hot-button issue, the role of class or collective action.

Nat'l Law Journal Report on Cordray Testimony/Cordray Bio

Here.

Journal of Consumer Affairs Table of Contents--Fall 2011

Special Issue on Aging Consumers

Aging Gracefully: Emerging Issues for Public Policy and Consumer Welfare by Vanessa G. Perry and Joyce M. Wolburg

Safe Sex After 50 and Mature Women’s Beliefs of Sexual Health by Cynthia R. Morton, Hyojin Kim,
and Debbie Treise

U.S. Retirement Financial Services Advertising's Financial Information Provisions, Communication Strategies, and Judgmental Heuristic Cues by Taejun (David) Lee, Eric Haley, Tai Woong Yun, and Wonjun Chung

Retirement Planning and the Intrinsic Rewards of Work, Future Time Perspectives, and Economic Expectations by Ting-Ying Yang and Sharon A. DeVaney

Aging Consumer Vulnerabilities Influencing Factors of Acquiescence to Informed Consent by Merlyn A. Griffiths and Tracy R. Harmon

Research Frontiers on Older Consumers’ Vulnerability by George P. Moschis, Jill Mosteller, and Choong Kwai Fatt

The Value of Retail- and Consumer-Level Fruit and Vegetable Losses in the United States by Jean C. Buzby, Jeffrey Hyman, Hayden Stewart, and Hodan F. Wells

Bits, Briefs and Applications

Health Risk Factors and Their Effect on Consumers’ Use of Nutrition Facts Panels by Laurel Aynne Cook, Scot Burton, and Elizabeth Howlett

Team Purchase: A Case Of Consumer Empowerment In China by Jeff Jianfeng Wang, Xin
Zhao, and Julie Juan Li

Editorial Postlude: Parting Perspectives of an Aging Editor (& thanks for all the fish) by Herbert Jack Rotfeld

Should We Socialize WIreless Service in the U.S.?

Wireless service in the U.S. stinks. Compared to what? Compared to your land line phone, that's what. I subscribe to the service that I'm repeatedly told is the best in the D.C. area, but it drops calls, fails to connect, goes in and out, and is often hard to hear. None of that ever happens with my land line. It's convenient, of course, to be able to take your phone with you, and the phone works more often than not, but it'd be even better if cell phones were more dependable and way better if I didn't have to hear fellow subway riders screaming into their phones every day (in the hope that adding 20 decibels will help improve the discussion!). And it's not as if cell phone service is new. We've had it for years, and it's still bad.

Why is service so bad? In this piece, Joshua Topolsky says it's because private providers compete in the same service areas, slicing up bandwith in a way that disserves consumers and undermines call quality. He draws an analogy to a hypothetical system of private roadways (which, in fact, are largely socialized):

Imagine you’re headed out of town for the weekend in your new Prius. If you don’t own a Prius, don’t worry — this is an alternate reality. You’re leaving Maryland for New York City and looking forward to a leisurely afternoon drive. But there’s a snag — a big one. A small group of private companies actually owns the roads, and they want you to follow their rules — so you can’t get to New York unless you drive a sport-utility vehicle. To get on Interstate 95 north, you’ve got to have an Escalade or an Explorer. On the other hand, the company that owns the roads around Washington allows only green cars, so those big SUVs have no way of getting from New York to vast swaths of Maryland. Oh, there are also towns that neither type of car can drive to because no one has built any roads there yet. Sorry! That’s just how someone decided to make the transportation network work. Sounds crazy, right? Well, I’ve just described the current state of the U.S. wireless phone business.

Topolosky's solution: Socialize wireless service.

Well-Intentioned Restrictions on 16- and 17-Year Old Drivers May Not Be Working

As this article in the LA Times puts it:

For more than a decade, California and other states have kept their newest teen drivers on a tight leash, restricting the hours when they can get behind the wheel and whom they can bring along as passengers. Public officials were confident that their get-tough policies were saving lives. Now, though, a nationwide analysis of crash data suggests that the restrictions may have backfired: While the number of fatal crashes among 16- and 17-year-old drivers has fallen, deadly accidents among 18-to-19-year-olds have risen by an almost equal amount. In effect, experts say, the programs that dole out driving privileges in stages, however well-intentioned, have merely shifted the ranks of inexperienced drivers from younger to older teens.

The LA Times article is based on a study published in the Journal of the American Medical Association, which can be viewed here.