Consumer Law & Policy Blog

Compilation of Consumer Advocate Blogs

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New Review of 40 States’ Unemployment Compensation Prepaid Cards

This new groundbreaking report from the National Consumer Law Center looks at unemployment compensation (UC) prepaid cards currently used by 40 states (the remaining states are expected to soon follow suit). The comprehensive survey includes a state-by-state highlights comparison chart, including bank issuer and notable fees; a national overview of fees; and recommendations for card improvements.

Unemployment Compensation Prepaid Cards: States Can Deal Workers a Winning Hand by Discarding Junk Fees, analyses the payment options, fees, and access to account information available to workers in every state that uses UC prepaid cards. It also surveys the laws that do (or do not) protect workers and offers recommendations for how states can design a card that works well for both the state and its unemployed workers.

The report singles out as especially problematic the overdraft fees that U.S. Bank has on prepaid cards in five states: Arkansas, Idaho, Nebraska, Ohio, and Oregon. No other bank’s UC prepaid card charges overdraft fees, which the U.S. Department of Labor (DOL) has found are “inconsistent with federal law.” And the Tennessee card (issued by JP Morgan Chase) draws the two of clubs for the card with the most junk fees, including ATM, PIN debit, denied transaction, and balance inquiry fees.

So who holds the winning hand? California and New Jersey currently have the best UC cards (both issued by Bank of America), although both could benefit from fees more clearly and prominently displayed on websites. The State of California loses one trick for not offering direct deposit.

The report urges the new U.S. Consumer Financial Protection Bureau, which starts work in July, and U.S. Department of Labor to work together to ban overdraft fees and other unfair fees and to improve transparency and competition by posting all fee schedules in one place so that states and consumers can compare who has the best hand.

The trump card? States can design an unemployment prepaid card that works well for both the state and doesn't lose workers in the shuffle. They are generally an improvement over paper checks for the unbanked but there is room for improvement to ensure they deliver every penny to unemployed Americans (at last count, more than 13 million folks).

Now that National Consumer Law Center has laid the cards on the table, let's hope states use the report to cut a better prepaid card deal for their unemployed workers.

Ninth Circuit Cleans Up Its Own Section 230 Mess — Motions to Dismiss Are Allowed Again

by Paul Levy

The Ninth Circuit has retracted some of the dangerous dictum in its recent decision in Barnes v. Yahoo!, discussed in this blog last month here and here. The panel opinion had asserted – in dictum which, under Ninth Circuit procedure, actually constituted binding precedent – that Internet Service Providers’ section 230 immunity from suit cannot be raised on a motion to dismiss.  In response to a petition for rehearing filed by Yahoo!, and to an amicus brief filed by Public Citizen along with several other organizations, the court issued an amendment that simply deleted that part of its opinion.  The court also attempted, a bit grudgingly, to clean up some text and a footnote of its previous opinion, which had apparently stated that section 230 immunity applies only to state law claims, even though courts generally (including a Ninth Circuit en banc opinion last year) had held that it extends to federal law claims as well.   The cleanup is not ideal — the text of the opinion still states “[S]ubsection (c)(1) only protects from liability . . . a provider or user . . . whom a plaintiff seeks to treat, under a state law cause of action⁴ as a publisher or speaker.”  But the new footnote 4 plainly recognizes that 230(c)(1) extends to federal law causes of action, albeit rather in contradiction to the text which retains the word "only."  It is fair to assume that other courts will recognize what the panel’s intent was.  Props to Eric Goldman for calling attention to this second flaw in the opinion.

Can a Section 230 Immunity Defense Be Raised on a Motion to Dismiss?

by Paul Alan Levy

We've previously blogged here about the important role that Section 230 of the Communications Decency Act plays in protecting consumer commentary on the Internet.  Several commentators have discussed (for example, here and here) the recent decision of the Ninth Circuit in Barnes v. Yahoo!, which held that, although Section 230 protects Yahoo! from being be sued for negligent failure to remove fraudulent postings made in her name by Barnes’ former boyfriend, Yahoo! could be sued for promissory estoppel on the ground that one of its managers allegedly promised Barnes that the postings would be removed, but then failed to do so while Barnes relied on Yahoo! promise.  The decision is carefully written to allow an ISP to avoid liability by hedging any assurances with an explicit denial that the promise is binding or enforceable. Most of the commentary has focused on this issue, reminding ISP’s (including bloggers who allow comments) to be careful about making unconditional promises to remove material. 

A possible sleeper issue in the decision, however, appears early in the opinion (Part II, at pages 5317-5318), where the Ninth Circuit faults the district court for allowing Yahoo! to file a motion to dismiss under Rule 12(b)(6), which asserts that the complaint does not state a claim on which relief can be granted.  The court notes that Section 230 immunity is an affirmative defense, and that affirmative defenses must be presented in an answer, followed by a motion for judgment on the pleadings.   In the future, district courts are to treat section 230 as an affirmative defense.

Fair Arbitration Coalition, Website & Blog Announced

A newly formed coalition is calling on Congress to stand up for employees and consumers and ensure companies are held accountable for misdeeds by passing legislation to end forced arbitration.  The goal of the Fair Arbitration Now Coalition is to pass the Arbitration Fairness Act (H.R. 1020).  Participants represent consumers, employees, homeowners, franchise holders and more. They range from Public Citizen, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association of Justice to the National Consumer Voice for Long-Term Care, Home Owners for Better Building and the Leadership Conference on Civil Rights.

Website & Blog:  The coalition also has launched a blog that keeps readers up-to-date on the latest arbitration news and a web site, explaining what forced arbitration is, outlining the kinds of contracts in which forced arbitration clauses appear, providing links to news articles and telling stories of arbitration horrors.

Arbitration Fairness Day (April 29): The Fair Arbitration Now Coalition will hold a press conference and lobby day on Wednesday, April 29, with more than 50 consumers, employees and their representatives, who can speak about the injuries people suffer when they are forced into arbitration in an attempt to hold companies accountable for wrongdoing.

Blockshopper Settles Jones Day’s Trademark Linking Suit – What Are the Lessons? What Can We Do Now?

by Paul Alan Levy

Late last week, lawyers for Jones Day filed a stipulation of dismissal of its trademark claims against the real-estate website Blockshopper. The lawsuit alleged that, by providing links to lawyer bio pages on the Jones Day web site from anchor text that set forth the lawyers’ names, Blockshopper was creating a likelihood of consumer confusion about whether Jones Day was the sponsor of or affiliated with the Blockshopper web site.  Under the terms of the settlement, Blockshopper agreed not to provide a clickable link to Jones Day’s web site from any form of anchor text other than the actual URL to which the viewer would be taken. Thus, instead of linking to Paul W. Schroeder, the lead counsel for Jones Day in the case, in the way I have just done, Blockshopper would have to configure its site this way: Paul W. Schroeder, http://www.jonesday.com/pwschroeder/.

There have been several excellent blog posts about the ramifications of the settlement, on Consumerist, Techdirt, Slate, and Ars Technica.  But here is my take on who won, and what lessons are to be drawn from this development.  Although there is reason to be concerned about the chilling effect of the litigation, there is something that the blogging community can do to limit that chilling effect.