Consumer Protection Law Commons^™

Privacy As Product Safety, James Grimmelmann

Cornell Law Faculty Publications

Online social media confound many of our familiar expectations about privacy. Contrary to popular myth, users of social software like Facebook do care about privacy, deserve it, and have trouble securing it for themselves. Moreover, traditional database-focused privacy regulations on the Fair Information Practices model, while often worthwhile, fail to engage with the distinctively social aspects of these online services.

Instead, online privacy law should take inspiration from a perhaps surprising quarter: product-safety law. A web site that directs users' personal information in ways they don't expect is a defectively designed product, and many concepts from products liability law could …

Ratings Failure: The Need For A Consumer Protection Agenda In Rating Agency Regulation, David J. Reiss

Cornell Law Faculty Working Papers

As the credit crisis unfolds, rating agencies have been properly identified as playing a central role in causing the crisis and misleading investors. What has been forgotten in this acrimonious environment is that in their quest to increase the market for their services, rating agencies also took positions that were particularly bad for many homeowners.

This article first reviews the explosive growth of the subprime mortgage market. It then discusses the ways in which the leading rating agencies, Standard & Poor’s, Moody’s and Fitch, acted as government-approved gatekeepers to the financial markets and contributed to the rapid expansion of the …

Warranties And Disclaimers In The Electronic Age, Robert A. Hillman, Ibrahim Barakat

Cornell Law Faculty Publications

This paper reports on software-licensor express warranty and disclaimer practices on the Internet. Our data show that virtually all of the websites and End User License Agreements (EULAs) we sampled include express warranties on the website and disclaimers of the warranties in the EULAs that may erase all or much of the quality protection. Next, the paper reviews the reasons why consumers generally do not read their e-standard forms despite the prevalence of disclaimers and other adverse terms. We then argue that e-commerce exacerbates the problem of warranties and disclaimers and that lawmakers should address this issue. We contend that …

Mandatory Arbitration For Customers But Not For Peers: A Study Of Arbitration Clauses In Consumer And Non-Consumer Contracts, Theodore Eisenberg, Geoffrey P. Miller, Emily Sherwin

Cornell Law Faculty Publications

We conducted a study of contractual practices by well-known firms marketing consumer products, comparing the firms' consumer contracts with contracts the same firms negotiated with business peers. The frequency of arbitration clauses in consumer contracts has been studied before, as has the frequency of arbitration clauses in non-consumer contracts. Our study is the first to compare the use of arbitration clauses within firms, in different contractual contexts.

The results are striking: in our sample, mandatory arbitration clauses appeared in more than three-quarters of consumer contracts and less than one tenth of non-consumer contracts (excluding employment contracts) negotiated by the same …

Statins And Adverse Cardiovascular Events In Moderate-Risk Females: A Statistical And Legal Analysis With Implications For Fda Preemption Claims, Theodore Eisenberg, Martin T. Wells

Cornell Law Faculty Publications

This article presents: (1) meta-analyses of studies of cardioprotection of women and men by statins, including Lipitor (atorvastatin), and (2) a legal analysis of advertising promoting Lipitor as preventing heart attacks. The meta-analyses of primary prevention clinical trials show statistically significant benefits for men but not for women, and a statistically significant difference between men and women. The analyses do not support (1) statin use to reduce heart attacks in women based on extrapolation from men, or (2) approving or advertising statins as reducing heart attacks without qualification in a population that includes many women. The legal analysis raises the …

Online Boilerplate: Would Mandatory Website Disclosure Of E-Standard Terms Backfire?, Robert A. Hillman

Cornell Law Faculty Publications

No abstract provided.

A Fictional Tale Of Unintended Consequences: A Response To Professor Wertheimer, Aaron Twerski, James A. Henderson Jr.

Cornell Law Faculty Publications

No abstract provided.

Let The States Legislate, David J. Reiss

Cornell Law Faculty Working Papers

Predatory lending was the most pressing consumer protection issue of 2004. Indeed, the Center for Responsible Lending found that predatory loans cost U.S. families more than $9 billion a year. It is such a serious problem that it looks as if major changes are in store in 2005 for how loans are to be made.

Preferences For Processes: The Process/Product Distinction And The Regulation Of Consumer Choice, Douglas A. Kysar

Cornell Law Faculty Publications

This Article examines a conceptual distinction between product-related information (such as whether a consumer good threatens to harm its user) and process-related information (such as whether a good’s production harmed workers, animals, or the environment) that has appeared in various guises within international trade law; domestic environmental, health, and safety regulation; and constitutional commercial speech jurisprudence. This process/product distinction tends to dismiss information concerning processes as unworthy of attention from consumers or regulators, at least so long as the processes at issue do not manifest themselves in the physical or compositional characteristics of resulting end products. Proponents have offered the …

Unusual Impetus For A Consumer Law, David J. Reiss

Cornell Law Faculty Working Papers

The judgment about the suitability of consumer protection laws is becoming less and less the domain of New Jersey citizens and their elected representatives; rather, it has shifted into the domain of a financial services firm that is an advocate for investors, not the public.

Hold The Line Against Diluting Anti-Predatory Lending Law, Baher Azmy, David J. Reiss

Cornell Law Faculty Working Papers

Last month, the New Jersey Legislature held off an attempt by certain elements of the lending industry to eviscerate the recently enacted Home Ownership Security Act. Those same elements, however, are regrouping as the new session begins, hoping to take another swipe at the act. Legislators should oppose this assault, because the measure maintains a good balance between reducing mortgage abuses and preserving a healthy residential mortgage market.

The Expectations Of Consumers, Douglas A. Kysar

Cornell Law Faculty Publications

In the few years following promulgation of the Restatement (Third) of Torts: Products Liability, several courts have reaffirmed their allegiance to the consumer expectations test for product design defect liability, while rejecting the Restatement's contrary recommendation to adopt a design defect test that focuses primarily on technical features regarding the risk and utility of alternative product designs. In this Article, Professor Kysar reviews the post-Third Restatement decisions, identifying within them a common failure to articulate a coherent, independent doctrinal role for the consumer expectations test, despite the courts' clearly expressed desire to do so. In Kysar's view, courts adhering to …

Consumer Expectations' Last Hope: A Response To Professor Kysar, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

The authors agree with Professor Kysar that the current version of the consumer expectations test for design defectiveness is an amorphous, unprincipled misreading of section 402A of the Restatement (Second) of Torts. And they agree that most courts apply risk-utility balancing in determining design defectiveness. But they disagree with Kysar's proposal to supplement risk-utility balancing with a reinvigorated consumer expectations test based on expert testimony regarding what consumers actually expect in the way of design safety. Judicial reliance on such testimony would be susceptible to result-oriented manipulation by litigants, would not guide manufacturers in making sensible design choices, would pressure …

Modeling A Response To Predatory Lending: The New Jersey Home Ownership Security Act Of 2002, Baher Azmy, David J. Reiss

Cornell Law Faculty Working Papers

Professor Baher Azmy and Professor David Reiss document how predatory home lending practices have become rampant throughout the country and, notably, among low- and moderate-income and African American communities in New Jersey. Their article analyzes this emerging problem as a sometimes devastating side effect of the rapid increase in American home ownership, an otherwise almost completely desirable phenomenon. Because predatory lending has been so difficult to define, states have struggled to regulate it. New Jersey, building on the work of a few other leading states, has drafted what many consider to be the new standard for predatory lending legislation, the …

Ethics Of Enterprise Liability In Product Design And Marketing Litigation, James A. Henderson Jr.

Cornell Law Faculty Publications

American courts talk as though they are imposing strict enterprise liability on product manufacturers, but in truth they do so only with respect to manufacturing defects. In product design and marketing litigation, manufacturers' liability is based on fault. The reason why strict liability is inappropriate for the generic product hazards associated with design and marketing is that, in sharp contrast to manufacturing defects, the conditions necessary for insurance to function are not satisfied. Users and consumers control generic product risks to a sufficiently great extent that any insurance scheme based on strict enterprise liability would be destroyed by combinations of …

Standard-Form Contracting In The Electronic Age, Robert A. Hillman, Jeffrey J. Rachlinski

Cornell Law Faculty Publications

The development of the Internet as a medium for consumer transactions creates a new question for contract law. In this Article, Professors Robert Hillman and Jeffrey Rachlinski address whether the risks imposed on consumers by Internet boilerplate requires a new lens through which courts should view these types of contracts. Their analysis of boilerplate in paper and Internet contracts examines the social, cognitive, and rational factors that affect consumers' comprehension of boilerplate and compares business strategies in presenting it. The authors conclude that the influence of these factors in Internet transactions is similar to that in proper transactions. Although the …

Drug Designs Are Different, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

Product-Related Risk And Cognitive Biases: The Shortcomings Of Enterprise Liability, James A. Henderson Jr., Jeffrey J. Rachlinski

Cornell Law Faculty Publications

Products liability law has witnessed a long debate over whether manufacturers should be held strictly liable for the injuries that products cause. Recently, some have argued that psychological research on human judgment supports adopting a regime of strict enterprise liability for injuries caused by product design. These new proponents of enterprise liability argue that the current system, in which manufacturer liability for product design turns on the manufacturer's negligence, allows manufacturers to induce consumers into undertaking inefficiently dangerous levels or types of consumption. In this paper we argue that the new proponents of enterprise liability have: (1) not provided any …

State Attorney General Actions, The Tobacco Litigation, And The Doctrine Of Parens Patriae, Richard P. Ieyoub, Theodore Eisenberg

Cornell Law Faculty Publications

On November 23, 1998, a master settlement agreement settled the lawsuits of forty-six states against the tobacco industry. The settlement brings about historic public health initiatives, such as the end to outdoor advertising, the ban on using cartoon characters in advertisements, and the creation of public education trusts. It also provides that the settling tobacco manufacturers will pay over $200 billion over the next twenty-five years. Some of the legal theories upon which states relied have implications beyond the tobacco litigation. Of particular importance is the application of the theory of parens patriae in the tobacco litigation. That theory may …

Intuition And Technology In Product Design Litigation: An Essay On Proximate Causation, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

The Products Liability Restatement In The Courts: An Initial Assessment, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

Product Design Liability In Orgeon And The New Restatement, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

What Europe, Japan, And Other Countries Can Learn From The New American Restatement Of Products Liability, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

Achieving Consensus On Defective Product Design, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

The Politics Of The Products Liability Restatement, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

A Discussion And A Defense Of The Restatement (Third) Of Torts: Products Liability, James A. Henderson Jr.

Cornell Law Faculty Publications

No abstract provided.

Arriving At Reasonable Alternative Design: The Reporters' Travelogue, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

Substantial commentary and controversy have been generated by the requirement in the new Restatement (Third) of Torts: Products Liability that plaintiffs in most (but not all) cases involving claims of defective product design show that a reasonable alternative design was available and that failure to adopt the alternative rendered the defendant's design not reasonably safe. Henderson and Twerski explain the origins of that requirement and show that it is not only the majority position but also comports with widely shared views regarding the proper objectives of our liability system. Although consumer expectations cannot serve as a workable, stand-alone test for …

Prescription Drug Design Liability Under The Proposed Restatement (Third) Of Torts: A Reporter's Perspective, James A. Henderson Jr.

Cornell Law Faculty Publications

No abstract provided.

Will A New Restatement Help Settle Troubled Waters: Reflections, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.

The Unworkability Of Court-Made Enterprise Liability: A Reply To Geistfeld, James A. Henderson Jr., Aaron Twerski

Cornell Law Faculty Publications

No abstract provided.