"Issue" class actions in mass-tort multi-district litigation

Myriam Gilles and Gary Friedman have written Rediscovering the Issue Class in Mass Tort MDLs. Here's the abstract:

For the past twenty-plus years, MDL transferee judges have essentially regarded the class device as unavailable as they struggle to organize masses of tort actions sent their way by the JPML. Even the badges and incidents of class practice, in the form of common-fund-based approaches to attorney compensation and lead-counsel structures for case organization, have come under attack from commentators who insist that mass-tort MDLs should not be treated as “quasi-class actions,” and that Rule 23 does not present a “grab bag” from which MDL judges may pick and choose the most convenient implements. Leading lights of the complex litigation academy are emphatic that procedures for selecting and compensating class action counsel are uniquely rooted in the language, history and structure of Rule 23: when pirated away from their doctrinal home, we are told, these collective practices become contraband. 

The thesis of this essay is that judges and commentators are wrong to categorically reject class-based procedures in mass tort MDLs, as they do. Contrary to popular belief, Rule 23 does provide, if not a grab bag (that’s too opaque), a Black & Decker toolbox chock-a-block with shiny and promising instruments. Most centrally, we contend that Rule 23(c)(4), when properly employed, provides a doctrinally sound and constitutional means for achieving scale efficiencies in mass tort cases. Indeed, the issue class device is unique, among potential approaches to mass-harm litigation, in its ability to confer – meaningfully and durably – preclusive effects to core issues and shave years off of otherwise “black hole” MDL litigations – all while remaining fully consistent with Supreme Court case law, the Seventh Amendment, the text of Rule 23 and other relevant sources of positive law.

 

U.S. PIRG report on bank-sponsored campus debit cards

Read this new report by U.S. PIRG about how banks market debit cards on college campuses -- cards that come with significant fees. The gist is that banks pay colleges big bucks via "paid marketing agreements" that give the banks the right to market student card accounts that will receive certain funds, such as student loans. The banks then in turn profit handsomely from the fees imposed on students' use of the cards. The report found that "[s]tudents at schools with a paid marketing agreement with a financial account provider [bank] paid 2.3 times as much in fees as students at schools without a paid marketing agreement." Go here to learn more about the PIRG study.

And over at the Washington Post, Daniel Douglas-Gabriel has written this story on the PIRG report, which notes "that College students paid nearly $25 million in fees on campus-sponsored debit cards last year as banks struck lucrative deals with universities to offer financial products to largely low-income populations."

Imre Szalai Study Finds 78 Fortune 100 Companies Use Class Action Waivers in Consumer Agreements

Imre S. Szalai of Loyola of New Orleans has written The Prevalence of Consumer Arbitration Agreements by America’s Top Companies, 52 U.C. Davis L. Rev. Online 233 (2019). Here is the abstract: 

This article present the results of a study that examines the use of arbitration agreements by the top 100 Fortune Magazine-ranked largest domestic companies in the United States. The market power of these companies, which collectively represent more that two-thirds of the U.S. GDP, have enabled them to impose arbitration agreements upon their customers and have removed themselves from the traditional judicial system when disputes arise with their customers.

This study focuses on two main issues: 1) How many of these top companies have used arbitration agreements in connection with customer transactions since 2010; and 2) Of those companies, how many use arbitration agreements containing a “class waiver” requiring customers to waive their right to proceed collectively or as part of a class. The study then concludes with some observations about the prevalence of consumer arbitration agreements among America’s top companies.

Reidenberg et al. Article on Trustworthy Privacy Indicators

Joel R. Reidenberg of Fordham, together with four co-authors, has written Trustworthy Privacy Indicators: Grades, Labels, Certifications and Dashboards, 96 Washington University Law Review  (2019).  Here's the abstract:

Despite numerous groups’ efforts to score, grade, label, and rate the privacy of websites, apps, and network-connected devices, these attempts at privacy indicators have, thus far, not been widely adopted. Privacy policies, however, remain long, complex, and impractical for consumers. Communicating in some short-hand form, synthesized privacy content is now crucial to empower internet users and provide them more meaningful notice, as well as nudge consumers and data processors toward more meaningful privacy. Indeed, on the basis of these needs, the National Institute of Standards and Technology and the Federal Trade Commission in the United States, as well as lawmakers and policymakers in the European Union, have advocated for the development of privacy indicator systems.

Efforts to develop privacy grades, scores, labels, icons, certifications, seals, and dashboards have wrestled with various deficiencies and obstacles for the wide-scale deployment as meaningful and trustworthy privacy indicators. This paper seeks to identify and explain these deficiencies and obstacles that have hampered past and current attempts. With these lessons, the article then offers criteria that will need to be established in law and policy for trustworthy indicators to be successfully deployed and adopted through technological tools. The lack of standardization prevents user-recognizability and dependability in the online marketplace, diminishes the ability to create automated tools for privacy, and reduces incentives for consumers and industry to invest in a privacy indicators. Flawed methods in selection and weighting of privacy evaluation criteria and issues interpreting language that is often ambiguous and vague jeopardize success and reliability when baked into an indicator of privacy protectiveness or invasiveness. Likewise, indicators fall short when those organizations rating or certifying the privacy practices are not objective, trustworthy, and sustainable.

Nonetheless, trustworthy privacy rating systems that are meaningful, accurate, and adoptable can be developed to assure effective and enduring empowerment of consumers. This paper proposes a framework using examples from prior and current attempts to create privacy indicator systems in order to provide a valuable resource for present-day, real world policymaking.

First, privacy rating systems need an objective and quantifiable basis that is fair and accountable to the public. Unlike previous efforts through industry self-regulation, if lawmakers and regulators establish standardized evaluation criteria for privacy practices and provide standards for how these criteria should be weighted in scoring techniques, the rating system will have public accountability with an objective, quantifiable basis. If automated rating mechanisms convey to users accepted descriptions of data practices or generate scores from privacy statements based on recognized criteria and weightings rather than from deductive conclusions, then this reduces interpretive issues with any privacy technology tool. Second, rating indicators should align with legal principles of contract interpretation and the existing legal defaults for the interpretation of silence in privacy policy language. Third, a standardized system of icons, along with guidelines as to where these should be located, will reduce the education and learning curve now necessary to understand and benefit from many different, inconsistent privacy indicator labeling systems. And lastly, privacy rating evaluators must be impartial, honest, autonomous, and financially and operationally durable in order to be successful.

 

Still Another Update to the List of Schools Teaching Consumer Law

Here are Sara's revised statistics, and the listings appear after the jump:

110 classes total (53.92%)

32 clinics total (15.69%)

89 only offer a class (43.63%)

11 only offer a clinic (5.39%)

21 offer both (10.29%)

121 offer either (59.31%)

Gilles & Friedman paper on Qui Tam as a model for enforcement of group rights

Myriam E. Gilles of Cardozo and Gary B. Friedman of the Friedman Law Group have written The New Qui Tam: A Model for the Enforcement of Group Rights in a Hostile Era. Here is the abstract:

The present Administration has made clear it has no interest in enforcing statutes designed to protect workers, consumers, voters and others. And, as we have chronicled in prior work, the ability of private litigants to enforce these laws has been undercut by developments in the case law concerning class actions – particularly class-banning arbitration clauses. As these critical enforcement methods recede, will alternative methods of prosecuting claims arise? How might they work? Are they politically and fiscally sustainable? We focus here on a promising approach just now coming into view: qui tam legislation authorizing private citizens to bring representative claims on behalf of consumers, workers, and others. Progressive advocates have recently begun working with legislators in a handful of states to provide a qui tam mechanism for enforcing state statutory rights. The form these new laws might take remains uncertain and their enforceability is sure to be hotly contested by corporate interests and others. This article examines the legal and policy challenges that will face “new qui tam” legislation, and considers arguments for and against enlarging the role of citizens in prosecuting claims – an inquiry that requires us to determine the legitimacy and limits of the private attorney general model in its starkest form.

More on the Consumer Product Safety Commission

The Washington Post reports today that the CPSC was pursuing a recall of the BOB stroller, which apparently has a defect that has caused hundreds of crashes. Then the Trump appointees to the Commission halted the effort.

Staff members at the Consumer Product Safety Commission collected 200 consumer-submitted reports from 2012 to 2018 of spontaneous failure of the stroller wheel, which is secured to a front fork by a quick-release lever, like on a bicycle. Nearly 100 adults and children were injured, according to the commission. The agency’s staff members investigated for months before deciding in 2017 that one of the most popular jogging strollers on the market was unsafe and needed to be recalled.

When the company refused to voluntarily recall the product, the agency sued to force a recall. But in 2018, Republicans became a majority on the Commission for the first time in a decade. The CPSC's effort to recall the stroller soon changed:

According to a review of documents by The Washington Post and interviews with eight current and former senior agency officials, the agency’s Republican chairwoman kept Democratic commissioners in the dark about the stroller investigation and then helped end the case in court.

The company agreed to a settlement that did not include a recall or formal correction plan.

The full article is here.

Are Elite Law Schools Elite When It Comes to Consumer Law Classes?

by Jeff Sovern

For a variety of reasons, what elite law schools do has an effect on legal education disproportionate to the numbers of such schools.  For one reason, most law professors attended an elite law school, and their vision of what a law school should be is informed by their experiences as students.  Consequently, if elite law schools offer a consumer law course, future law professors are more likely to see such a course as appropriate for their law school to offer; if the school they went to didn't offer such a course, law professors have an easier time seeing the subject as one a school can do without. So how do the elite law schools do at offering consumer law classes?  According to our survey, only eight of the schools ranked in the top fourteen offer some form of a consumer law course or clinic (Harvard, Chicago, Penn, Virginia, Michigan, Duke, Berkeley, and Georgetown). The top schools not doing so include Yale, Stanford, Columbia, NYU, Cornell, and Northwestern.  Put another way, 57% of elite law schools have a consumer law offering of one kind or another, which is close to the percentage for non-elite schools. So when it comes to consumer law, the elite schools as a whole are just ordinary.

Those numbers havn't shifted much over time.  Michigan didn't offer a course in 2014 and now does.  And only two schools, Virginia and Northwestern, didn't offer the course in 2007 and now do. 

Proposal regarding litigation finance

Law prof Maya Steinitz has written Follow the Money? A Proposed Approach for Disclosure of Litigation Finance Agreements. Here is the abstract:

Litigation finance is the new and fast-growing practice by which a non-party funds a plaintiff’s litigation either for-profit or for some other motivation. Some estimates placed the size of the litigation finance market at 50–100 billion dollars. Both proponents and opponents of this newly -emergent phenomenon are in agreement that the it is the most important development in civil justice of this era. Litigation finance is already transforming civil litigation at the level of the single case as well as, incrementally, at the level of the civil justice system as a whole. It is also beginning to transform the way law firms are doing business and it will increasingly shape the careers of civil litigators at firms small and large. Consequently, Congress, state legislatures, state and federal courts, bar associations, international arbitration institutions, as well as legislatures and courts in other nations are all proceeding along dozens of parallel tracks grappling with how to regulate litigation finance and especially with the question of what, if any, disclosure requirements to impose on such financing. 

This Essay aims to turn the debate inside out by proposing to abandon the quest for a bright line rule and to instead adopt a flexible, discretionary standard; a balancing test. The Essay then culminates in a specific proposal for the contours – the interests and factors – which judges and arbitrators should be empowered and required to weigh when deciding whether and what form of disclosure to require. More specifically, the Essay details and rationalizes the specific interests – public and private – and factors to consider including the profile of the plaintiffs and their motive for seeking funding; the funder’s profile and motivation; the case type and the forum; the subject matter of the litigation; the potential effect on the development of the law; the structure of the financing; the purpose of the contemplated disclosure; and the procedural posture of the case.

Read about Office Depot's scam to fix infected computers that were not infected and needed no fixing

Read Michele Singletary's column about the scam here. The allegations against Office Depot were not pretty, and, as SIngletary explains, the Federal Trade Commission has put an end to the fraudulent scheme. Here's the gist of it:

Although not admitting any wrongdoing, Office Depot and California-based Support.com have agreed to pay $35 million to settle the claim that they deceived customers into believing their computers were infected with malicious malware and vulnerable to other security threats. The FTC alleged that, from at least 2009 to late 2016, the companies would offer customers a free “PC Health Check Program” to determine whether their computers had any performance problems. But the real purpose of the checkup was to aggressively sell diagnostic and repair services to customers that, in many cases, they didn't need, according to Claire Wack, an attorney in the FTC's division of marketing practices and the lead attorney on the case.

Read the FTC's press release, which contains links to key documents in the case.