Law Commons^™

Sacred Cows, Holy Wars, Kenneth Lasson

Kenneth Lasson

ED COWS, HOLY WARS Exploring the Limits of Law in the Regulation of Raw Milk and Kosher Meat By Kenneth Lasson Abstract In a free society law and religion seldom coincide comfortably, tending instead to reflect the inherent tension that often resides between the two. This is nowhere more apparent than in America, where the underlying principle upon which the first freedom enunciated by the Constitution’s Bill of Rights is based ‒ the separation of church and state – is conceptually at odds with the pragmatic compromises that may be reached. But our adherence to the primacy of individual rights …

Eminently Reasonable, David J. Reiss

David J Reiss

Local governments across the country are considering an innovative use of eminent domain. They propose to condemn underwater mortgages (those that exceed the fair-market value of the home) in their communities and restructure them so that home­owners can afford their payments and so that the new mortgage is for less than the fair market value of the property. If this proposal is implemented, the local government will pay the owner of mortgages of "underwater" homes the fair market value for the mortgages. The local government will then restructure each mortgage by reducing the principal amount owed to be in line …

"Ineffective In Any Form: Confirmation Biases And Other Psychological Phenomena Undermine Improved Home Loan Disclosures", Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article reports three eye-tracking experiments funded by the National Science Foundation that investigated the limitations of home-loan disclosure forms as a means of protecting consumers from imprudent or otherwise unsuitable home loans. These experiments found that presenting misleading information (such as “your interest rate is at 4%” when in fact that interest rate can rise to 8% over the life of the loan) can cause consumers to exhibit confirmation biases wherein they inappropriately skim the form to confirm the misleading information (a rate of 4%), and ignore information that would disconfirm those beliefs (that the rate can rise). These …

Dysfunctional Contracts And The Laws And Practices That Enable Them: An Empirical Analysis, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

The main function of entering into a contract is for both parties to be bound through being exposed to negative consequences if they breach. A review of purchase agreement forms used by condominium developers in Chicago, Illinois discovered that 79% eliminate the negative consequences for sellers by providing for highly one-sided remedies wherein the buyer’s sole remedy in the event of the seller’s breach was the return of the buyer’s own earnest money while reserving significant remedies to the developer in the event of the buyer’s default. Courts in many jurisdictions have refused to strike down this type of limitation …

Transparently Opaque: Understanding The Lack Of Transparency In Insurance Consumer Protection, Daniel Schwarcz

Daniel Benjamin Schwarcz

Consumer protection in most domains of financial regulation centers on transparency. Broadly construed, transparency involves making relevant information available to consumers as well as others who might act on their behalf, such as academics, journalists, newspapers, consumer organizations or other market watchdogs. By contrast, command and control regulation that affirmatively limits financial firms’ products or pricing is relatively uncommon in financial regulation. This Article describes a remarkable inversion of this pattern: while state insurance regulation frequently employs aggressive command and control consumer protection regulation, it typically does little or nothing to promote transparent markets. Rather, state lawmakers routinely either completely …

Consumers: The (Still) Missing Piece In A Piecemeal Approach To Privacy, Clark Asay

Clark Asay

U.S. consumers have little actual control over how companies collect, use, and disclose their personal information. This paper identifies two specific instances of this lack of control under U.S. law related to third-party disclosures, what I call the Incognito and Onward Transfer Problems. It then identifies the types of privacy harms that result and examines the advantages and possible drawbacks of a model law aimed at addressing these specific problems. The model law is based on a system of consumer notice and choice, the predominant method used in the U.S. to provide consumers with control over their information. Up until …

Novare Group V. Sarif: Buyer Beware; Georgia Consumers Can't Rely On The Fair Business Practices Act, Mark E. Budnitz

Mark E. Budnitz

The article discusses the Georgia Supreme Court’s decision, Novare Group v. Sarif, 290 Ga. 186, 718 S.E.2d 304 (2011). The article analyzes the court’s response to the plaintiffs’ claim that the defendant brokers and developers violated the Georgia Fair Business Practices Act (FBPA), Georgia’s primary consumer protection statute. I contend that the court’s approach undermines the FBPA. I describe the General Assembly’s purpose in enacting the FBPA and criticize the court for treating claims under the FBPA the same as common law fraud claims. I also examine the court’s treatment of parol evidence and merger clauses. I discuss the implications …

Adr’S Place In Foreclosure: Remedying The Flaws Of A Securitized Housing Market, Lydia Nussbaum

Lydia R. Nussbaum

Millions of Americans lost their homes during the foreclosure crisis, an unprecedented disaster still plaguing local and national economies. A primary factor contributing to the crisis has been the failure of conventional foreclosure procedures to account for the new realities of securitization and the secondary mortgage market, which transformed the traditional borrower-lender relationship. To compensate for the shortcomings of conventional foreclosure procedures and stem the tide of residential foreclosure, state and local governments turned to ADR processes for a solution. Some foreclosure ADR programs, however, have greater potential to avoid unnecessary foreclosures than others. This article comprehensively examines the key …

Adr's Place In Foreclosure: Remedying The Flaws Of A Securitized Housing Market, Lydia Nussbaum

Lydia R. Nussbaum

Millions of Americans lost their homes during the foreclosure crisis, an unprecedented disaster still plaguing local and national economies. A primary factor contributing to the crisis has been the failure of conventional foreclosure procedures to account for the new realities of securitization and the secondary mortgage market, which transformed the traditional borrower-lender relationship. To compensate for the shortcomings of conventional foreclosure procedures and stem the tide of residential foreclosure, state and local governments turned to ADR processes for a solution. Some foreclosure ADR programs, however, have greater potential to avoid unnecessary foreclosures than others. This article comprehensively examines the key …

The Consumer Financial Protection Bureau: Financial Regulation For The 21st Century

Patricia A. McCoy

After existing regulatory systems failed to prevent the recent financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a sweeping reform designed to alleviate the crisis and prevent its recurrence. Out of this Act, the Consumer Financial Protection Bureau was born. This new agency is charged with making markets for consumer financial products and services work for Americans, a task that was previously spread out among seven different federal agencies with varying priorities. This Article describes, with a series of concrete case studies, four key principles that have guided the Bureau as it strives to fulfill …

Novare Group V. Sarif: Buyer Beware; Georgia Consumers Can't Rely On The Fair Business Practices Act, Mark E. Budnitz

Mark E. Budnitz

In Novare Group v. Sarif, 290 Ga. 186, 718 S.E.2d 304 (2011), the Georgia Supreme Court substantially thwarted the legislature's intention in enacting the Fair Business Practices Act (FBPA), Georgia's primary consumer protection statute. The article analyzes the court’s approach to the plaintiffs’ claim that the defendant brokers and developers violated the FBPA. I examine the court’s approach to parol evidence and merger clauses. I describe the General Assembly’s purpose in enacting the FBPA and criticize the court for treating claims under the FBPA the same as common law fraud claims. I discuss the implications for future actions seeking redress …

National Roundtable On Consumer And Employment Dispute Resolution: Consumer Arbitration Roundtable Summary Report, Thomas J. Stipanowich, Nancy Walsh, Lisa Blomgren Bingham, Lawrence R. Mills

Thomas J. Stipanowich

This report is a summary of the discussions at the Consumer Arbitration Roundtable held at Pepperdine University on February 2-4, 3012 and co-sponsored by Pepperdine School of Law, The Straus Institute for Dispute Resolution, and Penn State University, Dickinson School of Law. It was prepared by members of the Planning Committee.

Patient Protection And Decision Aid Quality: Regulatory And Tort Law Approaches, Nadia N. Sawicki

Nadia N. Sawicki

One of the most enduring debates at the intersection of administrative and tort law focuses on the challenge of identifying the most effective means of ensuring consumer safety. In some circumstances, standard-setting administrative regulations may be sufficient to protect consumers from harm while at the same supporting the growth of valuable industries. In other circumstances, regulation may need to be supplemented by a complementary tort regime that fills the compensation gap when consumers suffer injury. The discussion among policymakers and legal scholars about which system to favor is continually playing out in a variety of arenas, most notably in the …

"A Necessary Cost Of Freedom"? The Incoherence Of Sorrell V. Ims, Tamara R. Piety

Tamara R. Piety

No abstract provided.

Federal Preemption And Consumer Financial Protection: Past And Future

Patricia A. McCoy

Starting in 1995 and throughout the subprime boom during the next decade, Congress failed to take action to curb predatory mortgage lending. Many states and cities filled the void by passing anti-predatory lending laws of their own. Lenders, worried about potential liability, quickly organized a full-scale attack on the state and local initiatives. Their most potent strategy lay in challenging the laws and ordinances under federal preemption rules for national banks and federal savings associations that precluded states from enforcing their anti-predatory lending laws.

The Dodd-Frank Act curtailed the preemption rules by establishing that state consumer financial laws can only …

Finding Room For Fairness In Formalism--The Sliding Scale Approach To Unconscionability, Melissa T. Lonegrass

Melissa T. Lonegrass

This Article evaluates the sliding scale approach to unconscionability, defends its use, and advocates for its continued and expanded application to consumer standard form contracts. Part I describes the sliding scale approach and its recent popularity in state courts, thereby filling a gap in the scholarly doctrine, which has to date failed to fully examine this trend. Parts II and III defend the sliding scale approach, praising its potential to align the unconscionability analysis with interdisciplinary research regarding consumer behavior and to balance formalist concerns about judicial regulation of unfair terms in standard form contracts. Finally, Part IV calls for …

"A Necessary Cost Of Freedom"? The Incoherence Of Sorrell V. Ims, Tamara R. Piety

Tamara R. Piety

On June 23, 2011 the Supreme Court announced its decision in a closely watched case, Sorrell v. IMS, striking down Vermont’s law prohibiting pharmacies from selling physicians’ prescription records without their permission for use in marketing brand name drugs. The Court’s majority struck down Vermont’s statute as unconstitutional on the grounds that the law was not “content neutral” because it singled out marketing for disparate treatment. It in effect applied a strict scrutiny test to a category of speech that has technically if not in practice been subject to intermediate scrutiny. This ruling effectively does away with the commercial speech …

Formulating A Soda Tax Fit For Consumption: A Pragmatic Approach To Implementing The Failed New York Soda Tax., Joseph Desantis

Joseph Angelo DeSantis

Previous attempts to levy a one-cent per-ounce tax on sodas, or sugar-sweetened beverages (SSB), have failed because they are modeled after a sin tax. This article proposes a different approach. An SSB tax should have two limited aims: (1) avoid implicitly demonizing soda consumption and (2) offset the cost of treating diseases attributed to SSB consumption. To these ends, this article explores using the basic principles of insurance to offset costs associated with risky behavior, without implicitly condemning that behavior. It further explores the link between SSB consumption and direct health costs to estimate a proper offset. Finally, this article …

"Should I Stay Or Should I Go: Promoting The Sustainability And Suitability Of Reverse Mortgages", Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

No abstract provided.

Hamp: Doomed From The Start, Marc Gans

Marc Gans

This paper will critique the effectiveness of the government's Home Affordable Mortgage Program (HAMP) and its companion programs, and dissect what went wrong. This will include an analysis of strategic defaults, securitization, legal liability, proposed solutions and conclude with what I think should have been done from the start.

Public Engagement In Rulemaking: The Consumer Financial Protection Bureau’S New Approach

Patricia A. McCoy

No abstract provided.

The Arbitration Fairness Index: Using A Public Rating System To Skirt The Legal Logjam And Promote Fairer And More Effective Arbitration Of Employment And Consumer Disputes, Thomas J. Stipanowich

Thomas J. Stipanowich

Recent Supreme Court decisions have heightened concerns about the degree of effective judicial oversight of consumer and employment arbitration under binding predispute agreements. Efforts to address such concerns are largely stymied by a political logjam. Because binding arbitration serves as the adjudicative backdrop for many kinds of consumer disputes or employer-employee conflict, the choice of arbitration and the kind of justice available under arbitration agreements may be every bit as important as consumer warranties and other substantive rights and remedies. Yet consumers and employees tend to know very little about arbitration and how it affects their rights and obligations; arbitration …