Consumer Protection Law Commons^™

Financial Literacy Or Financial Castigation?, John A. E. Pottow

Articles

This year, the Canadians- through their government-convened Task Force on Financial Literacy - have proudly produced, "Canadians and their Money: Building a Brighter Financial Future." Armed with 30 recommendations, its most dramatic innovation is to recommend the creation of a Financial Literacy Leader. I have been asked to provide an American perspective on this report specifically and the broader agenda of "financial literacy" more generally as a consumer welfare intervention. Let me start by acknowledging the critiques of the Canadian Task Force. For example, my Canadian colleague, Saul Schwartz, has already drafted a compelling analysis of the political economy behind …

Technology Convergence And Federalism: Who Should Decide The Future Of Telecommunications Regulation?, Daniel A. Lyons

University of Michigan Journal of Law Reform

This Article critically examines the division of regulatory jurisdiction over telecommunications issues between the federal government and the states. Currently, the line between federal and state jurisdiction varies depending on the service at issue. This compartmentalization might have made sense fifteen years ago, but the advent of technology convergence has largely rendered this model obsolete. Yesterday's telephone and cable companies now compete head-to-head to offer consumers the vaunted "triple play" of voice, video, and internet services. But these telecommunications companies are finding it increasingly difficult to fit new operations into arcane, rigid regulatory compartments. Moreover, services that consumers view as …

Are State Consumer Protection Acts Really Little-Ftc Acts?, Henry N. Butler, Joshua D. Wright

Faculty Working Papers

ABSTRACT: State Consumer Protection Acts (CPAs) were designed to supplement the Federal Trade Commission's mission of protecting consumers and are often referred to as "little-FTC Acts." There is growing concern that enforcement under these acts is not only qualitatively different than FTC enforcement, but may be counterproductive for consumers. This article examines a sample of CPA claims and compares them to the FTC standard. It identifies qualitative differences between CPA and FTC claims by commissioning a "Shadow Federal Trade Commission" of experts in consumer protection. The study finds that many CPA claims include conduct that would not be illegal under …

Consumer Choice As The Best Way To Recenter The Mission Of Competition Law, Robert H. Lande

All Faculty Scholarship

This article will (1) define the consumer choice approach to competition law or antitrust law and show how it differs from other approaches; (2) discuss the types of situations where a consumer choice focus is likely to make a difference in enforcement outcomes, producing better results than the other paradigms; (3) show that another important advantage of using the consumer choice approach would be to nudge decisions in the right direction; and (4) offer a brief overview of implementation issues.

This is a chapter of a forthcoming ASCOLA book, and is a condensation and update of Neil W. Averitt & …

Multidistrict Litigation: A Surprising Bonus For Pro Se Plaintiffs And A Possible Boon For Consumers, Danielle D'Onfro

Scholarship@WashULaw

Conventional wisdom says that pro se plaintiffs almost invariably fare worse than represented plaintiffs. However, there exists in federal court a procedural regime under which pro se plaintiffs effectively receive attorneys and therefore experience success rates similar to their represented peers: multidistrict litigation. Multidistrict litigation is a procedure for consolidating multiple federal civil cases sharing common questions of fact into a single proceeding in one federal district court for coordinated pre-trial proceedings and discovery. This paper takes an empirical look at all federal civil cases terminating between 2006 and 2008 to determine what effect multidistrict litigation has on case outcome …

When Patients Say No (To Save Money): An Essay On The Tectonics Of Health Law., Mark A. Hall, Carl E. Schneider

Articles

The ultimate aim of health care public policy is good care at good prices. Managed care stalled at achieving this goal by trying to influence providers, so health policy has turned to the only market-based option left: treating patients like consumers. Health insurance and tax policy are now pressuring patients to spend their own money when they select health plans, providers, and treatments. Expecting patients to choose what they need at the price they want, consumerists believe that market competition will constrain costs while optimizing quality. This classic form of consumerism is today's watchword. This Article evaluates this ideal type …

The Case For Behaviorally Informed Regulation, Michael S. Barr, Sendhil Mullainathan, Eldar Shafir

Book Chapters

Policymakers approach human behavior largely through the perspective of the “rational agent” model, which relies on normative, a priori analyses of the making of rational decisions. This perspective is promoted in the social sciences and in professional schools, and has come to dominate much of the formulation and conduct of policy. An alternative view, developed mostly through empirical behavioral research, provides a substantially different perspective on individual behavior and its policy implications. Behavior, according to the empirical perspective, is the outcome of perceptions, impulses, and other processes that characterize the impressive machinery that we carry behind the eyes and between …

Can Bundled Discounting Increase Consumer Prices Without Excluding Rivals?, Daniel A. Crane, Joshua D. Wright

Articles

Since we abhor suspense, we will quickly answer the question our title poses: No. As a general matter, bundled discounting schemes lower prices to consumers unless they are predatory—that is to say, unless they exclude rivals and thereby permit the bundled discounter to price free of competitive restraint. The corollary of this observation is that bundled discounting is generally pro-competitive and pro-consumer and should only be condemned when it is capable of excluding rivals. We pose and answer this question because it is at the heart of Section VI of Professor Elhauge’s provocative draft article which is the subject of …

Warranties In The Box, James J. White

Articles

Thousands of times each day, a buyer opens a box that contains a new computer or other electronic device. There he finds written material including an express "Limited Warranty." Sometimes the box has come by FedEx directly from the manufacturer; other times the buyer has carried it home from a retail merchant. Despite the fact that it is standard practice for the manufacturer to include a limited written express warranty on the sale of such products,' and despite the fact that both the manufacturer and the buyer believe that warranty to be legally enforceable, the law on its enforceability is …

The Truth About Torts: Rethinking Regulatory Preemption And Its Impact On Public Health, William Buzbee, William Funk, Thomas Mcgarity, Nina A. Mendelson, Sidney Shapiro, David Vladeck, Matthew Shudtz

Other Publications

As consumers, we assume that the automobiles, pharmaceuticals, medical devices, and other products we purchase are generally safe for their intended uses. We rely on manufacturers to design and produce safe products, and we assume that federal regulators are conscientious watchdogs of the marketplace. In most instances, our assumptions are valid and we safely go about our lives. But the regulatory system is now frayed to the point that dangerous products sometimes slip through the cracks. Vioxx, Firestone/ATX tires, and toxics-laden children’s toys have endangered and harmed millions. In these cases, society depends on the state courts as a venue …

The Patient Life: Can Consumers Direct Health Care?, Carl E. Schneider, Mark A. Hall

Articles

The ultimate aim of health care policy is good care at good prices. Managed care failed to achieve this goal through influencing providers, so health policy has turned to the only market-based option left: treating patients like consumers. Health insurance and tax policy now pressure patients to spend their own money when they select health plans, providers, and treatments. Expecting patients to choose what they need at the price they want, consumerists believe that market competition will constrain costs while optimizing quality. This classic form of consumerism is today's health policy watchword. This article evaluates consumerism and the regulatory mechanism …

Proposed Legislation: A (Second) Modest Proposal To Protect Virginia Consumers Against Defective Products, Peter Nash Swisher

University of Richmond Law Review

The purpose of this article is to suggest a viable, necessary, and eminently reasonable legislative alternative that the Virginia General Assembly should enact for legitimate and pressing public policy reasons in order to properly protect Virginia consumers from defective and unreasonably dangerous consumer products.Adopting this alternative would bring the Commonwealth of Virginia into the mainstream of twenty-first century American, and transnational, products liability law.

Arbitration's Summer Soldiers: An Empirical Study Of Arbitration Clauses In Consumer And Nonconsumer Contracts, Theodore Eisenberg, Geoffrey P. Miller, Emily Sherwin

University of Michigan Journal of Law Reform

We provide the first study of varying use of arbitration clauses across contracts within the same firms. Using a sample of 26 consumer contracts and 164 nonconsumer contracts from large public corporations, we compared the use of arbitration clauses in firms' consumer and nonconsumer contracts. Over three-quarters of the consumer agreements provided for mandatory arbitration but less than 10% of the firms' material nonconsumer, nonemployment contracts included arbitration clauses. The absence of arbitration provisions in the vast majority of material contracts suggests that, ex ante, many firms value, even prefer, litigation over arbitration to resolve disputes with peers. Our data …

Arbitration Costs And Forum Accessibility: Empirical Evidence, Christopher R. Drahozal

University of Michigan Journal of Law Reform

In this Article, written for this symposium issue on "Empirical Studies of Mandatory Arbitration," I examine the available empirical evidence on these two questions. I take "mandatory arbitration" to refer to pre-dispute arbitration clauses in consumer and employment (and maybe franchise) contracts. Accordingly, I limit my consideration of the empirical evidence to those types of contracts. I do not discuss empirical studies of international arbitrations, which almost always arise out of agreements between commercial entities. Nor do I discuss empirical studies of court-annexed arbitrations, which may not derive from party agreement and do not ordinarily proceed to a binding award.

Behaviorally Informed Financial Services Regulation, Michael S. Barr, Sendhil Mullainathan, Eldar Shafir

Other Publications

Financial services decisions can have enourmous consequences for household well-being. Households need a range of financial services - to conduct basic transactions, such as receiving their income, storing it, and paying bills; to save for emergency needs and long-term goals; to access credit; and to insure against life's key risks. But the financial services system is exceedingly complicated and often not well-designed to optimize house-hold behavior. In response to the complexity of out financial system, there has been a long running debate about the appropriate role and form of regulation. Regulation is largely stuck in two competing models - disclosure, …

Limiting Federal Agency Preemption: Recommendations For A New Federalism Executive Order, William Funk, Thomas Mcgarity, Nina A. Mendelson, Sidney Shapiro, David Vladeck, Matthew Shudtz, James Goodwin

Other Publications

The structure of the U.S. Constitution reflects a profound respect for the principles of federalism and state sovereignty. These principles require the federal government to recognize and encourage opportunities for state and local governments to exercise their authority, especially in areas of traditional state concern such as the protection of the health, safety, and welfare of their citizens. However, over the last six years there has been a coordinated Executive Branch effortto use the regulatory process to shield certain product manufacturers from state tort liability. The Food and Drug Administration, National Highway Traffic Safety Administration, and Consumer Product Safety Commission, …

The Chicago School's Foundation Is Flawed: Antitrust Protects Consumers, John B. Kirkwood, Robert H. Lande

All Faculty Scholarship

Chicago School antitrust policy rests on the premise that the purpose of the antitrust laws is to promote economic efficiency. That foundation is flawed. The fundamental goal of antitrust law is to protect consumers.

This essay defines the relevant economic concepts, summarizes the legislative histories, and analyzes recent case law. All these factors indicate that the ultimate goal of antitrust is not to increase the total wealth of society, but to protect consumers from behavior that deprives them of the benefits of competition and transfers their wealth to firms with market power. When conduct presents a conflict between the welfare …

It Depends On What The Meaning Of "False" Is: Falsity And Misleadingness In Commercial Speech Doctrine, Rebecca Tushnet

Georgetown Law Faculty Publications and Other Works

While scholarship regarding the Supreme Court's noncommercial speech doctrine has often focused on the level of protection for truthful, non-misleading commercial speech, scholars have paid little attention to the exclusion of false or misleading commercial speech from all First Amendment protection. Examining the underpinnings of the false and misleading speech exclusion illuminates the practical difficulties that abolishing the commercial speech doctrine would pose. Through a series of fact patterns in trademark and false advertising cases, this piece demonstrates that defining what is false or misleading is often debatable. If commercial speech were given First Amendment protection, consumer protection and First …

Nsf Fees, James J. White

Articles

Overdraft fees now make up more than half of banks' earnings on consumer checking accounts. In the past century, overdrafts have gone from the banker's scourge to the banker's profit center as bankers have learned that there is much to be made on these short term loans at breathtaking interest rates. I note that the federal agencies have been complicit in the growth of this form of lending. I propose that the banks and the agencies recognize the reality and attempt to mitigate these rates by encouraging the development of a competitive market.

One-Sided Contracts In Competitive Consumer Markets, Lucian A. Bebchuk, Richard A. Posner

Michigan Law Review

The usual assumption in economic analysis of law is that in a competitive market without informational asymmetries, the terms of contracts between sellers and buyers will be optimal-that is, that any deviation from these terms would impose expected costs on one party that exceed benefits to the other. But could there be cases in which "one-sided" contracts containing terms that impose a greater expected cost on one side than benefit on the other-would be found in competitive markets even in the absence of fraud, prohibitive information costs, or other market imperfections? That is the possibility we explore in this Article.

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

Michigan Law Review

A law backfires when it produces results opposite from those its drafters intended. Lots of laws may have backfired. For example, people opposed to hate crimes legislation think that the laws "inflame prejudice rather than eradicate it." The Endangered Species Act, according to some analysts, has helped destroy rather than preserve the creatures listed by the Act. Even consumer protection laws, some believe, increase prices and confuse consumers instead of protecting them. This Article analyzes whether mandatory website disclosure of standard terms, advocated by some as a potential solution to market failures when consumers contract over the Internet, is another …

The Boilerplate Puzzle, Douglas G. Baird

Michigan Law Review

The warranty that comes with your laptop computer is one of its many product attributes. The laptop has a screen of a particular size. Its microprocessors work at a particular speed, and the battery lasts a given amount of time between recharging. The hard drive has a certain capacity and mean time to failure. There is an instruction manual, online technical support (or lack thereof), and software. Then there are the warranties that the seller makes (or does not make) that are also part of the bundle. Just as I know the size of the screen, but nothing about the …

The Hidden Roles Of Boilerplate And Standard-Form Contracts: Strategic Imposition Of Transaction Costs, Segmentation Of Consumers, And Anticompetitive Effects, David Gilo, Ariel Porat

Michigan Law Review

Standard-form contracts offered to consumers contain numerous terms and clauses, most of which are ancillary to the main terms of the transaction. We call these ancillary terms "boilerplate provisions." Since most consumers do not read boilerplate provisions or, if they do, find them hard to understand, courts are suspicious of boilerplate provisions and sometimes find them unenforceable under the doctrine of unconscionability. At times, courts conclude that harsh terms have not been accepted by consumers in the first place and therefore are not included in the contract, and on other occasions courts interpret boilerplate provisions in favor of consumers, applying …

Contra Proferentem: The Allure Of Ambiguous Boilerplate, Michelle E. Boardman

Michigan Law Review

Bad boilerplate can shake one' s faith in evolution; not only does it not die away, it multiplies. The puzzle is why. Much of boilerplate is ambiguous or incomprehensible. This alienates consumers and is i ncreasingly punished by courts construing the language against the drafter. There must, therefore, be some hidden allure to ambiguous boilerplate. The popular theory is trickery: drafters lure consumers in with promising language that comes to nothing in court. But this trick would require consumers to do three things they do not do-read the language, understand it, and take comfort in it. There is a hidden …

Abuse Prevention 2005, James J. White

Articles

Today I do not debate the empirical question (what is the cause of the increase in bankruptcy filings?) nor do I address the buried moral question (who deserves the protection of bankruptcy law?). Rather, I speculate about the consequences of 2005 amendments to the Bankruptcy Code and about the reasons it will achieve or fail to achieve the goals of its sponsors. Along the way I hope to learn something about how law changes, or fails to change behavior.

Search And Persuasion In Trademark Law, Barton Beebe

Michigan Law Review

The consumer, we are led to believe, is the measure of all things in trademark law. Trademarks exist only to the extent that consumers perceive them as designations of source. Infringement occurs only to the extent that consumers perceive one trademark as referring to the source of another. The most "intellectual" of the intellectual properties, trademarks are a property purely of consumers' minds. The simple idealist ontology underlying trademark law is largely responsible for the law's characteristic instability. Since 1992, the Supreme Court has considered - and in some cases, reconsidered - seven trademark cases. The Court's copyright cases garner …

La Responsabilisation De L'Economie: What The United States Can Learn From The New French Law On Consumer Overindebtedness, Jason J. Kilborn

Michigan Journal of International Law

This Article on the French law continues a study of European consumer debt-relief systems, which the author began previously in an article on the German system. With rapid legal and practical developments in consumer debt-relief law, Europe provides an excellent comparative legal laboratory for observing the potential benefits and pitfalls of consumer bankruptcy reforms. In particular, French and German experiences with long-term payment plans shed useful light on the great debate raging in the United States over similar plans.

Lending A Helping Hand?: A Guide To Kentucky’S New Predatory Lending Law, Kent H. Barnett

Scholarly Works

The purpose of this note is to furnish the consumer advocate with an in-depth analysis of Kentucky's new predatory lending law by examining the basic structure of the statute, and its ambiguities, faults, and remedies. Practitioners will understand the impact the law may have on high-cost home loans, the potential traps that await their clients, and the provisions that require amending.

Part I discusses the applicability of the statute. Part II focuses on Kentucky's limitations that dovetail HOEPA requirements for high-cost home loans. Part III discusses provisions of the Kentucky law that require much more than, or in some cases …

Mandatory Recall Authority: A Sensible And Minimalist Approach To Improving Food Safety, Michael T. Roberts

ExpressO

No abstract provided.

Consumer Choice As The Ultimate Goal Of Antitrust, Robert H. Lande

All Faculty Scholarship

The mission of the antitrust laws need to be clarified, and this article asserts that the best way to do this is to interpret and enforce these laws in terms of consumer choice. This reformulation is necessary due to uncertainty and instability that exists in the field. This article will 1. define the consumer choice approach to antitrust or competition law and show how it differs from other approaches; 2. show that the antitrust statutes and theories of violation embody a concern for optimal levels of consumer choice; 3. show that the antitrust case law embodies a concern for optimal …