Law Commons^™

Improving Agencies’ Preemption Expertise With Chevmore Codification, Kent H. Barnett

Scholarly Works

After nearly thirty years, the judicially crafted Chevron and Skidmore judicial-review doctrines have found new life as exotic, yet familiar, legislative tools. When Chevron deference applies, courts employ two steps: they consider whether the statutory provision at issue is ambiguous, and, if so, they defer to an administering agency’s reasonable interpretation. Skidmore deference, in contrast, is a less deferential regime in which courts assume interpretative primacy over statutory ambiguities but defer to agency action based on four factors — the agency’s thoroughness, reasoning, consistency, and overall persuasiveness. In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress directed courts …

Sacred Cows, Holy Wars: Exploring The Limits Of Law In The Regulation Of Raw Milk And Kosher Meat, Kenneth Lasson

All Faculty Scholarship

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 and civil liberties ‒ that any activity must be permitted if it is not imposed upon others without their consent, and if …

The Missing Link: U.S. Regulation Of Consumer Cosmetic Products To Protect Human Health And The Environment, Valerie J. Watnick

Pace Environmental Law Review

This article explores these lax regulatory efforts and their connection to risk assessment, and proposes changes to our current toxics regulatory paradigm. Part I of this article explores our current regulatory approach for consumer cosmetics. Part II discusses the specific and dire concerns regarding chemicals that are suspected carcinogens and those suspected of disrupting the human endocrine system. The article argues in Part III that because the framework for our current regulation of consumer cosmetic products is not designed to be protective of human health, our regulatory paradigm must shift dramatically in the future if this is to become our …

The Future Of The Private Label Securities Market, David J. Reiss

David J Reiss

The PLS market, like all markets, cycles from greed to fear, from boom to bust. The mortgage market is still in the fear part of the cycle and recent government interventions in it have, undoubtedly, added to that fear. In recent days, there has been a lot of industry pushback against the government’s approach, including threats to pull out of various sectors. But the government should not chart its course based on today’s news reports. Rather, it should identify fundamentals and stick to them. In particular, its regulatory approach should reflect an attempt to align incentives of market actors with …

Armed, Unarmed Or Harmed By Knowledge? A Comment On The Fha's Housing Counseling Pilot Program, David J. Reiss

David J Reiss

The FHA has requested input on its Homeowners Armed with Knowledge (HAWK) for New Homebuyers pilot program. This comment letter argues that housing counseling is not a proven solution to the problem it is meant to solve, excessive defaults by FHA borrowers. HAWK is a traditional housing counseling program but the scholarly literature casts into doubt the efficacy of such programs. It would be better to take time to research which counseling strategies, if any, are proven to be effective. This is true for the FHA but also for other government agencies, such as the Consumer Financial Protection Bureau, that …

E-Commerce And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman

Lawrence J. Trautman Sr.

What are the major risks perceived by those engaged in e-commerce and electronic payment systems? What development risks, if they become reality, may cause substantial increases in operating costs or threaten the very survival of the enterprise? This article utilizes the relevant annual report disclosures from eBay (parent of PayPal), along with other eBay and PayPal documents, as a potentially powerful teaching device. Most of the descriptive language to follow is excerpted directly from eBay’s regulatory filings. My additions include weaving these materials into a logical presentation and providing supplemental sources for those who desire a deeper look (usually in …

Abstention Doctrine And The Fair Debt Collection Practices Act, Michael J. Wood

Chicago-Kent Law Review

A survey of cases where federal courts abstain from hearing cases related to existing state court cases under the Fair Debt Collection Practices Act (FDCPA) reveals varying approaches and theories underlying those courts’ abstentions. This article attempts to distinguish FDCPA claims related to the validity of the underlying debt from claims arising out of debt collectors’ conduct in collecting a debt, and recommends that federal courts avoid abstaining from the latter. When Congress passed the FDCPA, it intended to provide access to a forum of the consumer’s choice to enforce their rights under the Act by serving as “private attorneys …

3d Printers, James Barker, Nicholas Pleasants, Peter Montine, Shudan Zhu

Technology Law and Public Policy Clinic

A preliminary report, addressing potential market disruption, the state of the law, and recommendations on future legislative action regarding consumer-grade 3D printing.

The Legal Profession’S Monopoly: Failing To Protect Consumers, Laurel A. Rigertas

Fordham Law Review

No abstract provided.

A Psychological Account Of Consent To Fine Print, Tess Wilkinson-Ryan

All Faculty Scholarship

The moral and social norms that bear on contracts of adhesion suggest a deep ambivalence. Contracts are perceived as serious moral obligations, and yet they must be taken lightly or everyday commerce would be impossible. Most people see consent to boilerplate as less meaningful than consent to negotiated terms, but they nonetheless would hold consumers strictly liable for both. This Essay aims to unpack the beliefs, preferences, assumptions, and biases that constitute our assessments of assent to boilerplate. Research suggests that misgivings about procedural defects in consumer contracting weigh heavily on judgments of contract formation, but play almost no role …

The (Un)Informed Use Of Credit: The Need To Clarify Consumers' Right Of Rescission Under The Truth In Lending Act, Alan Ritchie

Loyola of Los Angeles Law Review

Currently, over 1 million properties in the United States are in some stage of foreclosure. Although foreclosure rates have decreased in recent years, they remain significantly higher than pre-lending-crisis rates, revealing that foreclosure is relatively commonplace in the current housing market. As such, consumers increasingly rely on consumer protection laws to provide security against the threat of foreclosure and unfair credit practices. The Federal Truth in Lending Act (TILA) was enacted to assure meaningful disclosure of credit and finance terms in consumer credit transactions. Among the various remedies available under TILA, consumers have the right to rescind the entire credit …

The Role Of Litigation In The Fight Against Prescription Drug Abuse, Richard C. Ausness

Law Faculty Scholarly Articles

Prescription drug abuse problems have prompted a number of responses by both drug users (and abusers) and by various federal and state government agencies.

Part I of this Article examines the impressive array of liability theories that individual litigants have relied upon in their lawsuits against Purdue. These theories include: negligence; strict products liability, including design defect and inadequate warning claims; breach of the implied warranty of merchantability; violation of state consumer protection statutes; negligent marketing; fraudulent misrepresentation; civil conspiracy; and "malicious conduct." Purdue, the company that developed OxyContin, has pursued an aggressive "no settlement" policy and has chosen to …

Virtual Currencies: Bitcoin & What Now After Liberty Reserve, Silk Road, And Mt. Gox?, Lawrence J. Trautman

Lawrence J. Trautman Sr.

During 2013, the U.S. Treasury Department evoked the first use of the 2001 Patriot Act to exclude virtual currency provider Liberty Reserve from the U.S. financial system. This article will discuss: the regulation of virtual currencies; cybercrimes and payment systems; darknets, Tor and the “deep web;” Bitcoin; Liberty Reserve; Silk Road and Mt. Gox. Virtual currencies have quickly become a reality, gaining significant traction in a very short period of time, and are evolving rapidly. Virtual currencies present particularly difficult law enforcement challenges because of their: ability to transcend national borders in the fraction of a second; unique jurisdictional issues; …

Third Party Funding Of Personal Injury Tort Claims: Keep The Baby And Change The Bathwater, Terrence Cain

Chicago-Kent Law Review

In the early 1990s, a period of high-risk lending at high interest rates, a new entrant emerged in civil litigation: the Litigation Finance Company (“LFC”). LFCs advance money to plaintiffs involved in contingency fee litigation. The money is provided on a non-recourse basis, meaning the plaintiff repays the LFC only if she obtains money from the lawsuit through a settlement, judgment, or verdict. If the plaintiff recovers nothing, she will not owe the LFC anything. When she does repay the LFC, however, she could end up paying as much as 280% of the amount advanced by the LFC. As one …

The Future Of Fannie And Freddie, Mark A. Calabria, Michael E. Levine, David J. Reiss, Lawrence J. White, Mark Willis

David J Reiss

This is a transcript of a panel discussion titled, “The Future of Fannie and Freddie.” The panelists were Dr. Mark Calabria from the Cato Institute; Professor David Reiss from Brooklyn Law School; Professor Lawrence White from NYU Stern School of Business; and Dr. Mark Willis from NYU’s Furman Center for Real Estate and Urban Policy. The panel was moderated by Professor Michael Levine from NYU School of Law. Panelists looked at economic policy and future prospects for Fannie and Freddie. The remarks have not been edited by the panelists.

Who Should Be Providing Mortgage Credit To American Households?, David J. Reiss

David J Reiss

Who should be providing mortgage credit to American households? Given that the residential mortgage market is a ten-trillion-dollar one, the answer we come up with had better be right, or we may suffer another brutal financial crisis sooner than we would like. Indeed, the stakes are as high as they were in the Great Depression when the foundation of our current system was first laid down. Unfortunately, the housing finance experts of the 1930s seemed to have a greater clarity of purpose when designing their housing finance system. Part of the problem today is that debates over the housing finance …

The Future Of Fannie And Freddie, David J. Reiss

David J Reiss

This is a transcript of a panel discussion titled, “The Future of Fannie and Freddie.” The panelists were Dr. Mark Calabria from the Cato Institute; Professor David Reiss from Brooklyn Law School; Professor Lawrence White from NYU Stern School of Business; Dr. Mark Willis from NYU’s Furman Center for Real Estate and Urban Policy. The panel was moderated by Professor Michael Levine from NYU School of Law. Panelists looked at economic policy and future prospects for Fannie and Freddie. My remarks focused on the goals of housing finance policy.

Empowering The Consumer: A Discussion On Minnesota's Dual Agency Statute And A Proposed Solution That Puts The Consumer First, Micheal Fleming

Student Scholarship

Many Americans across this county strive to achieve the dream of home ownership. The obstacles that stand in the way of achieving that dream can be staggering and unique to the persons pursuing home ownership. To a certain extent, it is expected that there be some proverbial hoops of fire to jump through before finally turning that key to a new home. What the consumer does not expect is to find a statutory scheme that creates unnecessary obstacles, such as a broker with a divided loyalty and information barriers, at the expense of the public. This statutory scheme is enshrined …

An Economic Perspective On Subprime Lending, Michael H. Anderson

Chicago-Kent Law Review

This article aims to provide a concise economic overview of several interesting subprime financing mechanisms, which are becoming increasingly common on the U.S. financial landscape. In particular, rent-to-own, payday lending, pawn broking, and (vehicle) title loans are considered. Generally speaking, a common thread with these loans is their relatively small size and short duration as well as the absence of a credit check or any of the traditional processes for determining credit-worthiness. Due to the ready availability of these loans, they appeal to low-income consumers, including the “working poor,” and to those who have suffered financial setbacks. Because the natural …

Legal Uncertainty And Aberrant Contracts: The Choice Of Law Clause, William J. Woodward Jr.

Chicago-Kent Law Review

Legal uncertainty about the applicability of local consumer protection can destroy a consumer’s claim or defense within the consumer arbitration environment. What is worse, because the consumer arbitration system cannot accommodate either legal complexity or legal uncertainty, the tendency will be to resolve cases in the way the consumer’s form contract dictates, that is, in favor of the drafter. To demonstrate this effect and advocate statutory change, this article focuses on fee-shifting statutes in California and several other states. These statutes convert very common one-way fee-shifting terms (consumer pays business’s attorneys fees if business wins but not the other way …

Legal Uncertainty And Aberrant Contracts: The Choice Of Law Clause, William J. Woodward Jr.

Faculty Publications

Legal uncertainty about the applicability of local consumer protection can destroy a consumer’s claim or defense within the consumer arbitration environment. What is worse, because the consumer arbitration system cannot accommodate either legal complexity or legal uncertainty, the tendency will be to resolve cases in the way the consumer’s form contract dictates, that is, in favor of the drafter. To demonstrate this effect and advocate statutory change, this article focuses on fee-shifting statutes in California and several other states. These statutes convert very common one-way fee-shifting terms (consumer pays business’s attorneys fees if business wins but not the other way …

Females On The Fringe: Considering Gender In Payday Lending Policy, Amy J. Schmitz

Chicago-Kent Law Review

Payday lending may provide a much-needed safety net for some consumers in need of quick cash for emergencies. However, data suggest that most payday loan borrowers become repeat users caught in a cycle of high-cost debt. Furthermore, empirical evidence indicates consistent overrepresentation of women, including many single mothers, among payday loan borrowers. This takes a toll not only on these women and their families, but also on society as a whole. Indeed, context matters in payday lending debates. It is thus time to think creatively and consider contextualized programs that aim to increase women’s and all consumers’ safe borrowing options, …

Interest Rate Caps, State Legislation, And Public Opinion: Does The Law Reflect The Public's Desires?, Timothy E. Goldsmith, Nathalie Martin

Chicago-Kent Law Review

In scholarly circles, debates about the benefits and burdens of high-costs lending are prevalent, as are debates about whether to cap interest on certain kinds of consumer loan. Despite this scholarly interest, few scholars actually know what the general public thinks or knows about interest rates on common consumer credit products. This article tries to close this gap through an empirical study of consumer attitudes about interest rates in the state of New Mexico, a state in which high-cost loans such as payday loans and title loans are ubiquitous. Our data show that the general public overwhelmingly supports interest rate …

An Economic Investigation Of Rent-To-Own Agreements, Michael H. Anderson

Chicago-Kent Law Review

Rent-to-own (RTO) allows immediate access to goods without a credit check and provides an opportunity for eventual acquisition. Yet goods can be returned at any point without penalty or other adverse financial consequence. RTO is attractive to financially distressed consumers due to its ready availability as well as the options embedded in the contract. These options include the ability to cancel, early purchase, reinstate following a consumer return, and, possibly, choose the frequency of payments. In this article, a body of research on RTO is brought together and summarized. The bulk of this work is empirical, applying statistical techniques to …

Situational Duress And The Aberrance Of Electronic Contracts, Nancy S. Kim

Chicago-Kent Law Review

This article explains how the aberrant nature of electronic contracts has unique implications, which contract law should recognize. Companies, taking advantage of these unique implications, may use electronic contracts in an unfair and coercive manner, which is why this article proposes expanding the definition of duress to include “situational duress.” Situational duress would not encompass all electronic contracting scenarios, but would be limited to situations where (1) a drafting company uses an electronic contract to block consumer access to a product or service; (2) the consumer has a “vested interest” in that product or service; and (3) the consumer accepts …

Are You Free To Contract Away Your Right To Bring A Negligence Claim?, Scott J. Burnham

Chicago-Kent Law Review

This article explores the enforceability of the exculpatory clause—a contract term in which one party agrees to give up the right to bring a negligence claim against the other party. A spectrum of views on whether a contract containing such a clause is aberrant or not is presented and analyzed, followed by the author’s view of the rubric by which the enforceability of the clause should be measured. The article concludes by deconstructing one contract in which the clause was found.

Does State National Bank Of Big Spring V. Geithner Stand A Fighting Chance?, Devon J. Steinmeyer

Chicago-Kent Law Review

Two years after the start of the 2008 financial crisis and during one of the worst economic recessions since the Great Depression, Congress passed a law designed to insure a financial crisis of the same magnitude would not occur again, and if it did, it would not have the same wide-reaching effects the 2008 crisis had. The Dodd-Frank Wall Street Reform and Consumer Protection Act sought to, among other things, end “too big to fail,” consolidate the consumer protection agencies, and provide for the orderly liquidation of defaulting systematically important companies. State National Bank of Big Spring v. Geithner, a …

Personal Guarantees And Sureties Between Commercial Law And Consumers In The United States, Christoph Henkel

Journal Articles

Guaranties and suretyships reduce the risk of default and today remain essential arrangements in many commercial and consumer transactions. A guarantor or surety promises to pay for the debt of a third party and may become primarily liable on that debt. Despite the significance of such a promise and the resulting obligation, U.S. law does not clearly distinguish between a guarantor and surety in a consumer or commercial context. This is of particular relevance, because in a consumer context a guaranty often has a gratuitous or sentimental element and a guarantor may not always be fully aware of the risks …

Mutual Assent, Normative Degradation, And Mass Market Standard Form Contracts––A Two-Part Critique Of Boilerplate: The Fine Print, Vanishing Rights And The Rule Of Law (Part I), Steven W. Feldman

Cleveland State Law Review

Although her book has achieved great renown, receiving high praise from prominent commentators, with plaudits such as “groundbreaking,” “a great achievement,” and a “masterpiece,” I respectfully suggest that the book has problems on both doctrinal and normative grounds. In my Article, I summarize the author’s argument on normative degradation, identify my concerns, and propose an alternative formulation. My counter thesis is that both statute and court decisions properly support consumer rights in the area of voluntary consent for mass-market standard form contracts. Besides being the first full-length critique of Boilerplate, this Article also has contributed some original observations to the …

Banking And The Social Contract, Mehrsa Baradaran

Scholarly Works

This article asserts that there exists today and has always existed an interdependent relationship between banks and the state. I refer to this connection and its mutual benefits and responsibilities as a social contract. When Alexander Hamilton responded to President Washington’s inquiry about the advisability of a national bank, he wrote that “such a Bank is not a mere matter of private property, but a political machine of the greatest importance to the State.” This social contract has existed since the inception of banking in the United States and has been reinforced over time, but it has recently become weakened …