Working Paper on Net Neutrality

Net neutrality continues to draw attention.  Nicholas Economides' paper working paper, "'Net Neutrality', Non-Discrimination and Digital Distribution of Content Through the Internet" can be found on SSRN at http://ssrn.com/abstract=977096.  The abstract is as follows:

The vast majority of US residential consumers face a monopoly or duopoly in broadband Internet access. Up to now, the Internet was characterized by a regime of net neutrality where there was no discrimination in the price of a transmitted information packet based on the identities of either the transmitter or the receiver or based on the application or type of content that it contained. The providers of DSL or cable modem access in the United States, taking advantage of a recent regulatory change that effectively abolished net neutrality and non-discrimination protections, and possessing significant market power, have recently discussed implementing a variety of discriminatory pricing schemes. This paper discusses and evaluates the implication of a number of these schemes on prices, profits of the network access providers and those of the complementary applications and content providers, as well as the impact on consumers. We also discuss an assortment of anti-competitive effects of such price discrimination, and evaluate the possibility of imposition of net neutrality by law.

FTC Roundtable on the Economics of Internet Auctions

SSRN recently posted "FTC Bureau of Economics Roundtable on the Economics of Internet
Auctions: An Executive Summary"  The abstract reads as follows:

On October 27, 2005, the Bureau of Economics at the Federal Trade Commission hosted a roundtable on the Economics of Internet Auctions. This one-day conference brought together academic experts, industry professionals and government economists to discuss and learn about Internet auctions. This paper is a brief summary of the papers presented and panel discussions at the conference. The conference covered three main issues: (1) fraud and information problems on consumer-to-consumer Internet auction sites like eBay, (2) competition between auction sites and amongst auction site users,
and (3) the data generated from auction sites and what inferences may be drawn from such data. The keynote address was given by Prof. Hal Varian. Varian discussed the auctions used by Google to sell keyword searches.

The full text can be found at  http://ssrn.com/abstract=912672

Attorney's Fees Litigation in the Supreme Court

By Brian Wolfman

Following up on yesterday's post from Steve Gardner, I wanted to let you know about two potentially important statutory attorney's fees cases before the Supreme Court.  In Davis v. Department of Justice, No. 06-1131, a fee-seeking plaintiff has asked the Court to address the question whether the rule limiting attorney's fees established in Buckhannon Board and Care Home, Inc. v. W. Va. Dep't of Health and Human Resources, 532 U.S. 598 (2001), applies in Freedom of Information Act cases.  An amicus brief written principally by my colleague Adina Rosenbaum -- filed on behalf of Public Citizen, Judicial Watch, the Electronic Frontier Foundation, and the National Security Archive -- explains why the Court should grant review and put the brakes on Buckhannon.  In an apparent response to the amicus brief, the government has been ordered to respond to the petition.

In addition, on April 17, the Supreme Court will hear oral argument in Sole v. Wyner, No. 06-531, which addresses the circumstances, if any, in which statutory attorney's fees may be awarded to a plaintiff who secures a preliminary injunction.  A host of organizations from all over the political spectrum, including Americans United, Public Citizen, and the Institute for Justice, have joined an amicus brief that lays out what is at stake in this important case.

Good guys win one: Kim v. Euromotors West

by Stephen Gardner

Of late, many courts seem to bend over backwards to find ways to deny reasonable attorneys’ fees to a successful plaintiff. The most notorious example of this is the United States Supreme Court’s decision in Buckhannon Board and Care Home, Inc. v. W. Va. Dep't of Health and Human Resources, 532 U.S. 598 (2001), where the Court held that the term "prevailing party" is a legal term of art that, according to the leading legal dictionary, means a “party in whose favor a judgment is rendered.”

Since many cases are resolved before final judgment, the effect of the Supreme Court’s ruling is to force parties to a judgment rather than disposing of a dispute simply by settling and then dismissing the underlying lawsuit. Of course, the number of former plaintiff lawyers on the Supreme Court, indeed on most benches, is pretty small, so most judges don’t actually understand anything other than monthly billing (where the law firm is the prevailing party!).

This issue is particularly acute when the object of a lawsuit is an injunction changing the defendant’s wrongful practice. Under the Court’s logic, all a defendant need do is change its practice, and then move to dismiss, getting a free bite at the apple. This encourages wrongful acts, since there is no sanction if caught. It’s like a bank robber nabbed leaving the bank, who only has to promise to stop robbing banks in the future to beat the rap — he doesn’t even have to give the money back!

More on Denial of Claims by Elderly Holders of Long Term Insurance Policies

With all the content we've drawn recently from the New York Times, it's nice to get some traffic going the other way.  So I'm pleased to report that the Times printed my letter about inflated consumer transaction costs and the denial of claims by elderly holders of long term care insurance policies (about which I blogged here on Monday).  The letter reads:

Many businesses, not just insurers, find it in their interest to interpose obstacles for consumers asserting their rights (ever buy something because of a rebate offer and then not collect the rebate?). Lawmakers should turn their attention to this practice of inflating consumer transaction costs.

You can read other letters on the same subject here.

NPR on Subprime Lending

Yesterday's subprime story by Steve Tripoli, featuring Alan White:

Subprime mortgages are getting all the bad press. But other kinds of subprime borrowing — from credit cards to fast-cash — are just as common, leaving more Americans paying more for loans.

Listen to Steve Tripoli on Marketplace.

And, in a related NPR story from yesterday:

Fed Chairman Ben Bernanke was on Capitol Hill today, where everybody wanted to know whether he thought the subprime market will torpedo the rest of the economy.

Listen to Ben Bernanke on Marketplace.

Consumer Law Publications

We recently obtained permission to reprint on the Blog abstracts of and links to articles published on the Social Science Research Network (SSRN).  As many of our readers will know, numerous writers on legal and other subjects post articles to SSRN when (or even before) they are submitted to law reviews, enabling the articles to be read long before they are available in print.  Consequently, SSRN has become perhaps the most important and certainly the most timely place to find current legal scholarship.  Seven recent abstracts on pieces relevant to consumer law , together with links, are pasted in below:

Consumer Product Safety Commission Establishes Program To Alert Consumers of Critical Product Recall Information By E-Mail

The Consumer Product Safety Commission has begun its "Drive to One Million," an effort to encourage at least 1 million consumers to sign-up for automatic e-mails from the agency that will warn about product recalls.  As the CPSC describes it:

The goal: to sign-up at least 1 million consumers to receive life-saving information electronically through CPSC’s e-mail notification project. Consumers can receive notice of recall information as it is released. . . . Signing up is free, it’s fast, and it could save your life or the life of a family member.

Read the full description of the program here, and sign up for the automatic e-mails here.

Elizabeth Warren on the Credit Card Industry

Harvard Law School professor Elizabeth Warren was interviewed by NPR's Terry Gross for today's Fresh Air show. Listen here.

Claims by Elderly Long-Term Care Policy Holders Unfairly Denied

by Jeff Sovern

In an article published last year, Toward a New Model of Consumer Protection: The Problem of Inflated Transaction Costs, 47 William & Mary Law Review 1635 (2006), I argued that businesses often make it harder for consumers to obtain things they are entitled to because doing so can be profitable.  The lead story in today's New York Times is a horrible example of a business doing just that.  The story is about long-term care insurers denying claims because of procedures that make it difficult or impossible for elderly policyholders to get paid.  Here's a quote: 

“The bottom line is that insurance companies make money when they don’t pay claims,” said Mary Beth Senkewicz, who resigned last year as a senior executive at the National Association of Insurance Commissioners. “They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.”

Among other things, the article describes how claims are denied because of "requirements" that do not appear in policies,  because policyholders filled out the wrong forms--which had been sent to them by the insurer, or because documents were not submitted--even though those documents were not required by the policy or had no bearing on approving the claim; claims are abandoned without informing policyholders; documents are lost; and calls go unreturned.   The article notes that many regulators have not "conducted meaningful investigations"  but also mentions lawsuits brought by policyholders.   The insurers respond that criticisms are unfair because most claims are paid promptly.