Consumer law issues have frequently appeared on the front pages of the Times in recent weeks, and today's edition has two such articles. In "Drug Makers Near Old Goal: A New Legal Shield," the Times reports on the Supreme Court case to be argued next term in which drug manufacturers argue that once the FDA has approved a drug, state product liability claims involving the drug are preempted. Some excerpts:
For years, Johnson & Johnson obscured evidence that its popular Ortho Evra birth control patch delivered much more estrogen than standard birth control pills, potentially increasing the risk of blood clots and strokes, according to internal company documents.
But because the Food and Drug Administration approved the patch, the company is arguing in court that it cannot be sued by women who claim that they were injured by the product — even though its old label inaccurately described the amount of estrogen it released.
* * *
Documents and e-mail messages from Johnson & Johnson, made public as part of the lawsuits against the company, show that even before the drug agency approved the product in 2001, the company’s own researchers found that the patch delivered far more estrogen each day than low-dose pills. When it reported the results publicly, the company reduced the numbers by 40 percent.
The F.D.A. did not warn the public of the potential risks until November 2005 — six years after the company’s own study showed the high estrogen releases. * * *
A series of independent assessments have concluded that the agency is poorly organized, scientifically deficient and short of money. In February, its commissioner, Andrew C. von Eschenbach, acknowledged that the agency faces a crisis and may not be “adequate to regulate the food and drugs of the 21st century.”
The entire article is worth reading, though it may make you swear off prescription drugs.
The other front-page article today, "The Tricky Task of Offering Aid to Homeowners," discusses the congressional goal of helping homeowners facing foreclosure without bailing out speculators or irresponsible lenders, all while minimizing the impact on the treasury. The piece explains the Democratic plan, as well as other proposals. A sidebar tracks through an example of how the Democratic proposal would work.
Some of the most interesting reporting on the mortgage crisis appears in the Business section. Gretchen Morgenson has a column, "A Road Not Taken by Lenders" about how lenders failed to verify borrowers' incomes with the IRS, even though at least 90% of the borrowers gave lenders permission to do so. The IRS charges $20 per form and takes a day or less to supply the information, but lenders said doing so was too costly or time-consuming. An excerpt:
Can investors stuck with losses on these loans sue to recover their investments based on this due-diligence failure? After all, mortgage originators made representations and warranties to investors that the quality of these loans was good when it clearly was not. And they made these representations knowing that they had not bothered to conduct quick and easy borrower-income checks.
“Investors hoping to put back the loans for deficient underwriting under reps and warranties would end up going back to the originators,” said Josh Rosner, an analyst at Graham Fisher & Company and an authority on mortgage-backed securities. “Given that many of these lenders are out of business, ultimately this could come back to the bank or investment bank.”
“The general view is this should not be talked about out loud,” Mr. Rosner added.
Wall Street will certainly battle forcefully against such lawsuits, if investors bring them. But its role as one of the great enablers in this mortgage debacle is something that even Wall Street can’t deny.
And here is a graphic that shows for various regions the percentage of mortgages that are subprime and the percentage of subprime mortgages that are in foreclosure.


