Consumer Law & Policy Blog

Federal Judicial Center Reports on the Class Action Fairness Act

    By Brian Wolfman

    The Federal Judicial Center, in a report written by Tom Willging and Emery G. Lee III, has concluded based on early data that the Class Action Fairness Act (CAFA) is generally having its intended effect of moving state-law-based class actions from state to federal court.  The report's key findings are as follows:

    • Class action filings in or removals to federal district courts post-CAFA brought class action activity to its highest level during the four-year period. Class actions were filed at a rate of 10.48 cases per filing day before CAFA (July 1, 2001, through February 17, 2005) and 11.96 cases per filing day after CAFA went into effect. This difference in filing rates is statistically significant.

CL&P Roundup

by Deepak Gupta

• Industry Takes Aim at UDAP Statutes: If you care about the future of the American consumer class action, this article in the National Law Journal is a must-read. According to the article, industry lobbyists plan to introduce amendments to state consumer protection statutes as early as December in jurisdictions such as Massachusetts, Illinois, and the District of Columbia, and eventually in all 50 states. Based on model legislation championed by the American Tort Reform Association in this alarming report, the amendments would require a plaintiff to demonstrate individual "reliance upon an act or practice declared unlawful"--a requirement that is patently designed to defeat class certification. We'll explore this issue in depth in the coming weeks.

• Mann on Payday Lending: Over at the excellent Credit Slips blog, professor Ronald Mann of the University of Texas offers some thoughts on payday lending to military personnel, a hot topic on which co-blogger Chris Peterson testifed to Congress and posted about here last week. Among other things, Mann says "Congress should view the military as an illustration of a general problem, not as a special case of activity that in other settings is benign."

• FTC on Mortgage Lending, Identity Theft: The Federal Trade Commission today filed these comments on mortgage lending abuses with the Federal Reserve Board and announced the interim recommendations of its Identity Theft Task Force.

Dear California Supreme Court: Did Prop 64 Impose A Reliance Requirement?

by Brian Wolfman

Public Citizen and the Center for Auto Safety, with the able representation of California consumer lawyer Jeff Fazio, filed an amicus request for review in the California Supreme Court today in a case concerning the scope of California’s consumer protection laws.

As many of you are aware, in 2004, California voters approved (by roughly a 60-40 margin) Proposition 64, which amended California’s Unfair Competition Law and a related provision regarding unfair advertising (collectively referred to here as the “UCL”).  Prior to Prop 64, the UCL, as conceived by the California Legislature and construed by the California courts, had been regarded as one of the nation’s most plaintiff-favorable, consumer-friendly consumer protection statutes.  Prop 64 does a number of things generally aimed at making it more difficult for individual plaintiffs to enforce the UCL’s substantive provisions.

The Hidden Perils of the "Cheeseburger Bill"

by Stephen Gardner

Consumers, consumer advocates, and anyone else interested in a fair marketplace should pay attention to a bill making its way through the Senate that is a clear attempt to give a get-out-of-jail-free card to Big Food for deception and fraud involving food products. The bill is S.908, and it is promoted as a way to stop baseless obesity lawsuits—i.e, alleging that a particular food (say, McDonald’s Big Mac) caused the plaintiff’s obesity.

If that were all the bill actually did, or tries to do, S.908 would only be an excessive response to a non-existent problem, since the total number of suits of this nature can be counted on one hand, with at least three fingers left over and possibly the thumb as well.