CL&P Roundup

by Deepak Gupta

• Chair of Product Safety Agency Says Beefing Up Her Agency Would "Harm" Americans:  In the wake of growing public concern over the number of unsafe toys and other products on the market, the chair of the Consumer Product Safety Commission, Nancy Nord, has told Congress that a Senate safety bill--which would more than double her anemic agency budget and expand its authority--would "put the American people at greater risk."  [U.S. PIRG Consumer Blog] [Washington Post].
• Postgame Coverage of the Arbitration Hearing:  For those of you who didn't get to attend or watch yesterday's hearing on binding mandatory arbitration, we plan to bring you the next best thing: Paul Bland of Public Justice will be posting his own expert observations on the proceedings.  In the meantime, here's some coverage from around the web: How Arbitration Steals Your Day in Court [MSNBC] and Liveblogging the House Judiciary Subcommitee Hearing [Consumerist].
• FTC Workshop on Privacy and Advertising:  On November 1st and 2nd, the Federal Trade Commission is holding a two-day workshop to address consumer protection issues raised by the tracking of consumers' activities online in connection with online advertising/behavioral advertising.  The agenda is available here.  Those who are interested but cannot attend can watch a live webcast here.
• Numbers Won't Be Dropped from the Do-Not-Call List (At Least For Now): The FTC has announced that it's not going to drop numbers from the do-not-call list, at least pending a final Congressional or agency decision on whether to make registration permanent.  Because of an internal scrubbing program that removes reassigned or disconnected numbers, there's no need to drop the numbers on the list.

View Live Webcast of Today's Hearing on Arbitration

View a live webcast of this afternoon's House Judiciary Committee hearing on the Arbitration Fairness Act, which started around 2:30pm, at this link.

Update: As of 2:59pm, the members are completing their opening statements and introductions and the witnesses are about to begin their statements.  The first round of witnesses is Laura McCleery, Governor Roy Barnes, Ken Conner, and the Richard Naimark of the AAA.

Win for Ticketmaster, Loss for Consumers

by Greg Beck

In Ticketmaster LLC v. RMG Technologies, 2007 WL 2988403 (C.D. Cal. Oct. 16, 2007), the Central District of California granted Ticketmaster's motion for a preliminary injunction against a company offering software that could quickly buy large quantities of tickets from Ticketmaster's website. The court held that the defendant was bound by the website's "Terms of Use," which prohibited commercial use of the site and limited the number of tickets that could be purchased at one time. The court concluded that, by merely browsing Ticketmaster's website in violation of these terms, RMG had infringed Ticketmaster's copyright in the site.

Although it's difficult to feel sorry for this defendant, who was basically allowing people to cut in Ticketmaster's virtual ticket line, the case raises troubling implications for consumers. The case gives more ammunition to companies that claim to bind consumers with contractual terms placed on a website. Moreover, the case assumes that merely viewing a website in an unauthorized manner can be copyright infringement. Reading a website, however, shouldn't be considered copyright infringement any more than reading a book is. Even though the website is copied into the computer's memory before it is displayed on the screen, the copy in memory is purely incidental to the process of reading the website, disappears when the user navigates to a different site, and has no adverse commercial effect on the copyright owner. Even if this is technically a "copy" under the Copyright Act, it seems like an easy example of fair use.

At the Technology & Marketing Law Blog, Eric Goldman concludes that the decision is "anything but consumer-friendly."

Congressional Hearing on Arbitration Fairness Act Tomorrow

by Deepak Gupta

We've blogged before about the proposed Arbitration Fairness Act, federal legislation that would end the scourge of pre-dispute mandatory binding arbitration clauses in consumer, employment, and franchise contracts.

Tomorrow, at 2pm, the U.S. House Judiciary Committee, Subcommittee on Commercial and Administrative Law,  will hold a hearing on the legislation.  The Committee is chaired by Rep. Linda Sanchez of California.

The witnesses tomorrow include Laura MacCleery, the director of Public Citizen's lobbying arm, Congress Watch, who will testify about the evils of mandatory binding arbitration in consumer disputes and the ways in which arbitral fora are used as assembly-line debt collection mills, thereby avoiding the protections that consumers would otherwise be afforded under federal law. As we've already mentioned here, Public Citizen recently released a report detailing how arbitration of disputes between consumers and credit card companies overwhelmingly favor the companies. The report, The Arbitration Trap: How Credit Card Companies Ensnare Consumers, is a detailed study of predatory practices in California, the only state that requires arbitration firms to publicly disclose information.

Tomorrow's lineup also includes:

• Richard Naimark, a VP at the American Arbitration Association, one of the big arbitration companies
• former Georgia Governor Roy Barnes, who now represents consumers as a trial lawyer
• Ken Conner, a conservative Republican trial lawyer who represents victims of nursing home abuse
• Cathy Ventrell-Monsees, representing the National Employment Lawyers Association
• Peter Rutledge, America's only pro-mandatory-binding-arbitration law professor.  (That's an exaggeration, of course.  But here's Rutledge's forthcoming law review article explaining why getting rid of mandatory arbitration would, in his view, actually harm consumers)
• Theodore Eppenstein, a lawyer who specializes in securities fraud cases

NPR: Countrywide and Housing Group Strike Deal to Prevent Foreclosures

by Deepak Gupta

NPR's Chris Arnold had a story this morning about an intriguing deal between mortgage lender Countrywide and housing advocates to attempt to prevent foreclosures.  The company says it will refinance or modify approximately $16 billion worth of loans for consumers whose loans will soon hit an unafordable interst rate or those who've already fallen behind in their payments.  The company is also hiring the Neighborhood Assistance Corporation of America to act as its "contractor" to help many more people prevent foreclosure.   The story also quotes Ira Rheingold, the president of the National Association of Consumer Advocates, expressing his skepticism about Countrywide's plans.

Writing Abstracts

by Jeff Sovern

We often post abstracts to consumer law articles appearing on SSRN, including abstracts by readers of this blog.  Mary Dudziak of USC has posted tips on writing abstracts on the Legal History Blog.  While the tips do not relate specifically to consumer law, I hope that readers of this blog will find them helpful.

Times Article on the Failure of Government Safeguards to Protect Meat Consumers

by Jeff Sovern

In addition to the report on the predatory lending bill Brian linked to below, today's Times also has an article about the government's system for insuring that meat is safe.  The article focuses on how that system did not prevent Topps Meat from selling hamburger contaminated with deadly bacteria.  An excerpt:

Five years ago, the government demanded more stringent safeguards against contamination because of a deadly form of the germ E. coli. But federal regulators now acknowledge that the controls are not working in some meat plants. They are trying to figure out what went wrong and how to overcome the dangers.

In the case of Topps, the government has determined that the company reduced its testing of ground beef and neglected other safety measures in the months before the recall.

Predatory Lending Legislation Introduced in U.S. House of Representatives

by Brian Wolfman

Legislation was introduced yesterday in the U.S. House of Representatives to curb predatory mortgage lending. One of the bill's key supporters is Rep. Barney Frank (D-MA), chair of the House Committee on Financial Services. The basic purpose of the legislation is to limit lending to situations where the borrower is reasonably able to repay.  You can get information on the legislation from the Financial Services Committee's website, which includes links to the entire bill and a section-by-section analysis. Today's New York Times has an article on the legislation as does today's Washington Post.

European Consumer Law - Recent developments

by Christine Riefa

When I last visited the United States I was amazed at the wide gap that there is in consumer policy making between the States and the European Union. However, the recent visit of Commissioner Kuneva in the US seemed to have put the spotlight on a much needed dialogue between the two. I invite you to read the press release on EU-US relations on consumer protection. Whilst some co-operation is in place, I trust that we will all agree that, in a global economy, more still needs to be done to protect consumers efficiently.

I also would like to signal a few recent development that may be of interest:

The review of the Distance Selling Directive 97/7/EC

Consumer Class Actions coming to Europe - with a draft Bill being reviewed in France (in French!)

The approaching deadline for the implementation of the Unfair Commercial Practices Directive 2005/29/EC

Happy reading.

Trip to Japan

by Richard Alderman

I just completed a short trip to Japan, where I lectured at the University of Tokyo. As you may know, Japan has recently adopted the American way of teaching law at the graduate level, and the transition seems to be complicated, but working well. There are still undergraduate law courses (four years) as well as graduate courses (three years) and you may take the bar after receiving your undergraduate degree, even if you do not go on to law school. It seems many students want to go to law school, but job opportunities are not great and may not justify the additional time and expense of a graduate law degree.

       I found all the students I met to be very conscientious and curious about the law. They seem to work harder than American law students (several reported being up till 5am  preparing for class), and most spoke English well enough for me to have a good discussion about their thoughts on consumer protection. They were very interested in discussing the whys of the law, and concepts such as fairness.

            One thing that did surprise me, and perhaps should not have, was how widespread tort reform rhetoric has become. At a lecture to the law faculty, one of the first questions asked me concerned the belief that Americans sue about anything and get millions of dollars in damages. I found that I spent more time than I intended explaining that the American justice system is not broken, and that in fact the jury system usually works well. This allowed me to get into my main topic, consumer arbitration.

            I found that trying to explain what is going on in this country with consumer arbitration was at best, difficult. I discussed the Supreme Courts position regarding arbitration and believe me, explaining Buckeye Check Cashing is not easy. Interestingly, however, they did catch on and asked all the right questions: is arbitration really voluntary? Do consumers really agree? Why can’t the courts review the decisions? How do consumers pay such high costs? Doesn’t it matter that these are all standard from contracts of  adhesion? Consumers cannot be forced into arbitration in Japan, and I hope I convinced them that is the right approach to take. When I mentioned that legislation has been introduced to ban consumer arbitration, they questioned why it would not easily pass. I then explained the realities of our political system.

It was interesting that I had little difficulty explain to a group of Japanese lawyers and law students the evils of consumer arbitration and the need for reform. Let’s hope it is just as easy to convince Congress.