Consumer Protection Law Commons^™

Cyberjacking, Mouse Trapping, And The Ftc Act: Are Federal Consumer Protection Laws Helping Or Hurting Online Consumers?, Kenneth Sanney

Vanderbilt Journal of Entertainment & Technology Law

Only the Federal Trade Commission (FTC) can bring a federal cause of action against a company whose business practices or actions deceive consumers. However, the FTC's power is limited; it can intervene on behalf of consumers only when there is a pattern of misconduct by the business that threatens the public interest. But where the scams themselves are difficult to spot, patterns may be virtually impossible to establish. Moreover, even successful FTC actions may yield little in the way of preventative or compensatory benefit for the individual user.

My aim in this Note, therefore, is to offer one possible means …

Using Warnings To Extend The Boundaries Of Consumer Sovereignty, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

We make decisions every day for which we may not have full information. Not all such decisions lead to negative consequences, however. For example, scientists still know very little about why aspirin has its beneficial effects. However, the lack of our knowledge does not necessarily imply that our decisions are in error or that our freedom to make these decisions should be constrained. Almost invariably, we must make decisions with uncertain implications when we fail to have complete information, whether it be with respect to today's weather forecast or the chemical composition of the foods we eat, but this does …

The Common Law "Duty To Serve" And Protection Of Consumers In An Age Of Competitive Retail Public Utility Restructuring, Jim Rossi

Vanderbilt Law School Faculty Publications

This article addresses the implications of retail competition in public utility industries, particularly electricity, for utility service obligations. After tracing the history of the common law duty to serve applicable to public utilities, the efficiency of utility service obligations in the context of rate regulation is explored. Retail competition, many suggest, poses a threat to utility service obligations. However, regulators can minimize the inefficiency of traditional utility service obligations without sacrificing the benefits of retail competition if they pay attention to the structural efficiency of competitive retail markets. The article advocates imposition of basic service obligations on the DisCo and …

Equitable Estoppel And The Outer Boundaries Of Federal Arbitration Law: The Alabama Supreme Court's Retrenchment Of An Expansive Federal Policy Favoring Arbitration, David F. Sawrie

Vanderbilt Law Review

A consumer purchases a manufactured home from a commercial vendor.' As part of the commercial transaction, the consumer and vendor execute a sales agreement containing the following arbitration clause: "All disputes, claims, or controversies arising from or relating to this Contract or the relationships which result from this Contract... shall be resolved by binding arbitration .... ,, The manufacturer of the home is not a party to the sales contract. Rather, the manufacturer issues a separate warranty agreement in connection with the consumer's purchase.

When the consumer discovers defects in the home, the consumer sues both the commercial vendor and …

Estimation Of Revealed Probabilities And Utility Functions For Product Safety Decisions, W. Kip Viscusi, William N. Evans

Vanderbilt Law School Faculty Publications

Using survey data on consumer product purchases, this paper introduces an approach to estimate jointly individual utility functions and risk perceptions implied by their decisions. The behavioral risk beliefs reflected in consumers risky decisions differ from the stated probabilities given to them in the survey. These results are not consistent with a Bayesian learning model in which the information respondents utilize is restricted to what the survey presents. The results are, however, potentially consistent with models in which prior risk information is influential or models in which people do not act in a fully rational manner.

Individual Rationality, Hazard Warnings, And The Foundations Of Tort Law, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

If all people were fully rational and cognizant of all the risks they faced, then they would always select an efficient level of safety in all their activities and other choices. Thus people would trade off the potential benefits of the risky behavior against the costs, including the risks to life and limb, and select the activity and product mix that best promoted their welfare. In such a world, there would not only be no need for hazard warnings, but there also would be no need for liability of any kind. Purchasers of hazardous products, for example, would always value …

"Weightier Than A Mountain": Duty, Hierarchy, And The Consumer In Japan, Anita Bernstein, Paul Fanning

Vanderbilt Journal of Transnational Law

The authors analyze the 1994 Japanese products liability law from a national-culture perspective. After examining the historical backdrop of the consumer's social role in both the United States and Japan, the authors argue that the new law cannot create a strict liability system like that of the United States in Japan, because the unique Japanese cultural context and its manipulation discourage the use of the legal process to advance consumer interests.

Rates Of Time Preference And Consumer Valuations Of Automobile Safety And Fuel Efficiency, W. Kip Viscusi, Mark K. Dreyfus

Vanderbilt Law School Faculty Publications

This article estimates hedonic price models for automobiles using a data set on almost 3,000 households from the U.S. Department of Energy Residential Transportation Energy Consumption Survey. The standard hedonic models are generalized to recognize the role of discounting of fuel efficiency and safety, yielding an estimated rate of time preference ranging from 11 to 17 percent. This range includes the prevailing rate of interest for car loans in 1988 and is consequently consistent with market rates. Purchasers exhibit an implicit value of life ranging from $2.6 to $3.7 million, which is within the range found in the labor market …

A Purposeful Approach To Products Liability Warnings And Non-English-Speaking Consumers, Thomas H. Lee

Vanderbilt Law Review

This simple statement, which represents a patriotic imperative ' for some Americans and a simple declaration of measurable observation for others, potentially plays havoc with products liability warning law. Products liability law, a byproduct of both common and statutory law, has developed state by state in a crazy quilt pattern across the country; although the states are virtually unanimous on broad doctrines, they have taken a Balkanized approach to details. Today, every jurisdiction recognizes that product manufacturers and sellers have a duty to warn consumers and users adequately of the inherent dangers associated with their products. This recognition, however, does …

Heirs Of Leonardo: Cultural Obstacles To Strict Products Liability In Italy, Anita Bernstein, Paul Fanning

Vanderbilt Journal of Transnational Law

In this Article, Professor Bernstein and Mr. Fanning argue that strict products liability, a legal rule recently adopted in the European Union, clashes with the culture of one of its large Member States, Italy. Using a wide array of source material--history, political sociology, literature, and numerous interviews--the authors begin with Italian traditions, exploring their implications for legal change. Strict products liability conflicts with these traditions. The doctrine is collectivist, tending to regard individuals in terms of group membership. Italians reject this aggregation, and affirm the singularity of a product design. The authors conclude that the EU attempt to harmonize its …

Proportional Liability: Statistical Evidence And The Probability Paradox, David A. Fischer

Vanderbilt Law Review

Numerous writers have proposed modifying traditional tort rules to permit plaintiffs to recover from a defendant who contributed to the risk of causing the plaintiff's harm without proving that the defendant actually caused the harm. These proposals would determine recovery by multiplying the plaintiff's total damages by the percentage chance that the defendant caused the damages, thereby giving her a portion of her damages.

Although these proposals for proportional liability take many forms, they may be divided into three major categories. The "proportional damage recovery" category would permit a plaintiff to recover a portion of her damages only after she …

Risk Perceptions In Regulation, Tort Liability, And The Market, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

Risk regulations are generally based on a stylized view of the behavior of the individuals affected by the regulation. These behavioral assumptions establish the basis for regulation and also influence the character of the regulation that will be pursed. The mix of behavioral assumptions that provides the basis for policy is often inconsistent. In some cases policymakers assume that irrationality prevails if that assumption will promote government intervention. If, however, individual perception of the risk and response to it is required to make a policy effective, risk regulators do not recognize individuals' cognitive limitations. These stylized views of risk-taking behavior …

Market Share Liability: A Current Assessment Of A Decade-Old Doctrine, Andrew B. Nace

Vanderbilt Law Review

Ten years ago, in Sindell v. Abbott Laboratories, the California Supreme Court created market share liability as a remedy for plaintiffs who had suffered injuries from prenatal exposure to diethystilbestrol (DES), but were unable to identify the specific manufacturer of the drug. The court fashioned the remedy because the available tort theories at the time-enterprise liability, alternate liability, and concert of action-were inadequate remedies for DES plaintiffs. The court's motivation was compensatory: redress innocent plaintiffs' injuries at the expense of collectively negligent defendants. Because of the victims' inability to show actual causation, the new doctrine sought to approximate a manufacturer's …

The Dimensions Of The Product Liability Crisis, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

Examination of a variety of sources of statistics indicates that the product liability crisis is real, and it is not simply imagined or contrived by the insurance industry. Litigation in the product liability area has escalated dramatically, but to some extent the industry was able to mute the effect of this escalation because of the influence of rising interest rates in the early 1980s as well as because the shrinking market for product liability insurance masked much of the explosion that was occurring in terms of the costs of product liability coverage. The dominant pattern in the early 1980s was …

Wading Through The Muddle Of Risk-Utility Analysis, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

The original emphasis of risk-utility analysis on the need for balanced decisions with respect to product liability is a correct and fundamental principle. Moreover, many traditional factors that have been considered are legitimate, but they did not provide a framework for comprehensive and consistent risk-utility judgments. The development in this Article of a series of economic formulations of the risk-utility test is intended to establish a sounder basis for a products liability defect doctrine.

Informational Regulation Of Consumer Health Risks: An Empirical Evaluation Of Hazard Warnings, W. Kip Viscusi, Wesley A. Magat, Joel Huber

Vanderbilt Law School Faculty Publications

On the basis of data from a survey of almost 400 consumers, this article assesses whether consumer behavior is responsive to information about product hazards that is provided in response to regulation. We find that the extent to which consumers take precautions is consistent with the level of risk indicated, the amount of risk information, the specific risk and precaution indicated, and the economic benefits of safety precautions. We also use the patterns of precautionary behavior to analyze the implicit value of the morbidity effects and to assess the consistency of consumer choices. Our findings support the use of product-hazard …

The Determinants Of The Disposition Of Product Liability Claims And Compensation For Bodily Injury, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

The frequency and severity of products liability lawsuits have become a matter of increasing importance and concern to the public at large and to American business in particular. The number of product liability cases filed each year escalated dramatically in the 1970s both in absolute terms and as a fraction of all civil cases.' The economic incentives for safety created by these product liability claims no longer are a minor concern but are now a fundamental influence on the economic environment of the firm. In recent years many larger firms have established corporate product safety offices to integrate these product …

Market Incentives For Safety, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

In the heated atmosphere generated by inch-high headlines and multimillion-dollar liability suits, two important facts often get lost. First, society's awareness of what ensuring reasonably complete safety would cost rarely matches the intensity of its demands for such assurance. And second, the most powerful forces working to make products and workplaces safer are not the edicts of government but the dynamics of the market. True, there are situations in which the market cannot by itself create effective incentives for safety, but in the vast majority of cases it can-and does. Drawing on his extensive research into the regulation of risk, …

Adaptive Responses To Chemical Labeling: Are Workers Bayesian Decision Makers?, W. Kip Viscusi, Charles J. O'Conner

Vanderbilt Law School Faculty Publications

A fundamental issue in the economics of uncertainty is how individuals process information and make choices under uncertainty. In a recent analysis of the findings on risk perception, Kenneth Arrow (1982) concluded that the evidence regarding individual rationality was, at best, quite mixed. A prominent example of apparent irrationality of actual consumer behavior is that consumers, who presumably are risk averse, have failed to purchase heavily subsidized federal flood insurance. In the case of the market for hazardous jobs, which is the focus of this study, Viscusi (1979) found that workers' risk perceptions were positively correlated with the industry risk …

The Lulling Effect: The Impact Of Child-Resistant Packaging On Aspirin And Analgesic Ingestions, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

In 1972, the Food and Drug Administration imposed a protective bottle cap requirement on aspirin and other selected drugs. This regulation epitomizes the technological approach to social regulation. The strategy for reducing children's poisoning risks was to design caps that would make opening containers of hazardous substances more difficult. This engineering approach will be effective provided that children's exposure to hazardous products does not increase. If, however, parents leave protective caps off bottles because they are difficult to open, or increase children's access to these bottles because they are supposedly "child proof," the regulation may not have a beneficial effect. …

Potentially Hazardous Merchandise: Domestic And International Mechanisms For Consumer Protection, Eric Shuman

Vanderbilt Journal of Transnational Law

Health disorders engendered by hazardous, exported foods, pesticides, drugs, and other products recently have attracted worldwide attention. The exportation of products which have been banned or highly restricted in their country of origin or which become hazardous in the environment of the importing nation is a popular issue for opponents of a perceived monolithic transnational industrial complex, as well as for critics of certain United States corporations. A more widely shared opinion is that the United States has a moral obligation to limit foreseeable harm from the export of potentially hazardous merchandise or at least to supply product hazard information. …

Case Digest, Law Review Staff

Vanderbilt Journal of Transnational Law

Admiralty Jurisdiction Exists in Products Liability Action although Product is not Unique to Maritime Use

Plaintiff, a shipyard worker who was exposed to asbestos dust and fiber while installing asbestos insulation, contracted asbestosis, an incurable lung disorder, and sued the manufacturer of the asbestos product, Johns-Manville Corporation, alleging negligent failure to warn and breach of warranty.

British Courts have Jurisdiction over British Subjects Committing Offenses aboard a Foreign Ship on the High Seas

Three British subjects were charged in a British court with violating the Criminal Damage Act of 1971 by committing acts of vandalism on a Danish vessel in …

Recent Cases, Law Review Staff

Vanderbilt Law Review

Antitrust--Treble Damage Actions--Private Litigant Whose Injury Was Reasonably Foreseeable Has Standing To Sue

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Constitutional Law--Free Exercise of Religion--First Amendment Violated by Compulsory Education Statute that Prevents a Parent from Raising His Children According to His Religious Beliefs

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Constitutional Law--Immunity Statutes-Section 201 of Organized Crime Control Act of 1970, Which Provides Only Use and Fruits Immunity, Violates Fifth Amendment

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Constitutional Law-Search and Seizure--AFDC Caseworker's Visit to Home of Nonconsenting Welfare Recipient Not Prohibited by Fourth Amendment

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Consumer Protection Law-Standing -United States Has Standing To Seek Injunction Against Practice of Obtaining Default Judgments Through False Affidavits Certifying Service …

Legislation--The Fair Packaging And Labeling Act: Its Legislative History, Content, And Future, Wesley E. Forte

Vanderbilt Law Review

The Fair Packaging and Labeling Act (FPLA), which became effective on July 1, 1967, was designed to protect consumers by requiring informative labeling and nondeceptive packaging for consumer commodities. The statute has been described as "an information bill. The first part is information largely about the label .... The second part of the bill is really, in a way, to try to eliminate the confusion in words so we have a common terminology, so we all speak the same language.... It is like establishing an alphabet ... in size designations." The author seeks to provide an insight into the new …

The Department Of Consumers, W. E. Forte

Vanderbilt Law Review

In 1872, Congress began protecting the American consumer by enacting legislation to prevent mail fraud. From this modest beginning, the consumer protection activities of the federal government have proliferated until today there are at least 33 government agencies engaged in 296 consumer protection activities. In 1961, the estimated annual expenditures by the federal government for direct consumer protection activities totaled 272 million dollars and the number of full-time federal employees engaged in such activities was almost 22,000. Expenditures for consumer advancement, a broader concept, were estimated at 681 million dollars in 1961 and the number of full time federal employees …